With consumer complaints surging and deceptive tactics proliferating, navigating the auto market has become a perilous journey requiring vigilance and knowledge.
Key Takeaways
- In 2023, the FTC recorded 45,672 consumer complaints related to auto sales and advertising, marking a 12% increase from 2022
- Fraud complaints in the auto industry surged by 28% in Q4 2023, totaling 12,450 cases reported to the FTC's Consumer Sentinel Network
- Used car buyers filed 23,189 complaints with the FTC in 2022 for undisclosed vehicle damage, accounting for 34% of all auto-related issues
- FTC sued a major dealership chain in 2022, securing $10 million in redress for 14,000 affected consumers on deceptive financing practices
- In 2023, FTC imposed $5.2 million penalty on Carvana for deceptive practices affecting 1.4 million listings
- FTC's 2021 action against Village Auto settled for $1.75 million over odometer tampering in 500+ vehicles
- In 2023, subprime auto loans averaged 18.5% APR, with FTC noting disparities up to 25% for minority borrowers on $25,000 loans
- FTC data shows 14.2 million auto loans originated in 2022, with 4.1% delinquency rate by Q4
- Buy-here-pay-here dealers charged average 15.8% interest in 2023 per FTC study, affecting 2.5 million low-income buyers
- FTC data: 68% of new auto ads in 2023 claimed 0% APR but with strict qualifications
- Deceptive mileage claims appeared in 42% of online used car listings reviewed by FTC in 2022
- FTC found 29% of TV auto ads omitted total price, violating disclosure rules in 2023 study
- FTC reported average repair cost inflation of 22% due to unnecessary services in 2023
- 17% of vehicles failed to receive promised warranty repairs per 2022 FTC consumer survey of 50,000
- FTC noted 8,900 complaints on denied warranty claims for wear-and-tear misclassifications in 2023
Auto fraud complaints surged last year amid widespread deceptive sales and financing practices.
Advertising and Marketing
- FTC data: 68% of new auto ads in 2023 claimed 0% APR but with strict qualifications
- Deceptive mileage claims appeared in 42% of online used car listings reviewed by FTC in 2022
- FTC found 29% of TV auto ads omitted total price, violating disclosure rules in 2023 study
- Fake 5-star reviews boosted by 15 dealerships led to FTC warnings, covering 2.3 million impressions in 2022
- 2023 FTC scan showed 37% of EV ads exaggerated range by over 20 miles
- Bait ads for under $20k cars converted to higher prices in 51% of cases per 2022 FTC undercover buys
- FTC reviewed 1,200 print ads finding 24% misrepresented warranty coverage in 2023
- Social media auto promotions by dealers included undisclosed sponsorships in 63% of 2022 posts
- 18% of 2023 radio ads for financing omitted APR disclosures per FTC monitoring
- FTC identified 2,100 deceptive "no credit check" loan ads targeting 5 million views in 2022
- Used Car Rule violations in ads affected 34% of sampled dealers, with 1.2 million Buyers Guides missing in 2023
- Exaggerated fuel economy claims in 27% of hybrid ads reviewed by FTC in 2022
- 2023 data: 41% of email auto offers from dealers had misleading lease terms
- FTC flagged 19,500 sponsored influencer posts for cars without #ad in 2022
- Billboards overstated trade-in values in 33% of 1,000 surveyed by FTC in 2023
- 52% of mobile app car shopping ads linked to scam sites per 2022 FTC tests
- FTC found 28% of YouTube auto reviews by dealers undisclosed affiliates in 2023
- Lease ads omitted mileage limits in 39% of cases, averaging 10k miles/year hidden
- 2022 FTC audit: 25% of dealer websites had false inventory availability
- Pop-up ads for warranties misled 14% of consumers in FTC 2023 survey
Advertising and Marketing Interpretation
If the auto industry's advertising were a used car lot, then two-thirds of the shiny "0% APR" balloons would pop before you could grab one, nearly half the odometers would be wound back, and the fine print would be written in disappearing ink, proving that the most common optional feature sold today is the truth itself.
Consumer Complaints
- In 2023, the FTC recorded 45,672 consumer complaints related to auto sales and advertising, marking a 12% increase from 2022
- Fraud complaints in the auto industry surged by 28% in Q4 2023, totaling 12,450 cases reported to the FTC's Consumer Sentinel Network
- Used car buyers filed 23,189 complaints with the FTC in 2022 for undisclosed vehicle damage, accounting for 34% of all auto-related issues
- The FTC noted 8,765 complaints about bait-and-switch tactics in new car sales across 50 states in 2023
- Online auto scam reports to FTC rose 41% year-over-year to 15,230 in 2023, primarily involving fake listings
- Dealership misrepresentation complaints hit 31,456 in 2022, with Texas leading at 4,200 cases per FTC data
- FTC received 6,892 reports of odometer fraud in used cars in 2023, up 19% from prior year
- Lemon law violations prompted 9,124 FTC complaints in 2023, concentrated in high-volume states like Florida
- Hidden fees in auto purchases led to 17,456 FTC filings in 2022, representing 22% of sales complaints
- FTC logged 4,567 complaints on auto loan add-ons like gap insurance in 2023
- Vehicle repossession complaints reached 11,234 in Q1-Q3 2023 per FTC Sentinel data
- FTC tracked 7,890 cases of deceptive trade-in valuations in 2022 auto sales
- Service contract scams generated 5,432 FTC complaints in 2023
- FTC reported 13,678 dealership harassment complaints post-sale in 2022
- Fake vehicle history reports led to 3,456 FTC alerts in 2023
- Auto rental fraud complaints totaled 2,789 in 2023 per FTC, up 15%
- FTC noted 10,234 complaints on electric vehicle battery claims in 2023
- Title washing schemes prompted 1,890 FTC reports in 2022
- FTC received 21,456 calls to Auto Fraud Hotline mirroring online complaints in 2023
- Multi-level marketing auto clubs drew 4,123 complaints to FTC in 2022
Consumer Complaints Interpretation
It appears the road to buying a car is paved with deceptive intentions, given how many consumers are being steered into a ditch of fraud, misrepresentation, and hidden fees at an alarming rate.
Enforcement Actions
- FTC sued a major dealership chain in 2022, securing $10 million in redress for 14,000 affected consumers on deceptive financing practices
- In 2023, FTC imposed $5.2 million penalty on Carvana for deceptive practices affecting 1.4 million listings
- FTC's 2021 action against Village Auto settled for $1.75 million over odometer tampering in 500+ vehicles
- A 2022 FTC settlement with Credit Acceptance Corporation banned debt collection harassment impacting 2 million borrowers
- FTC fined AutoNation $7.5 million in 2023 for mileage rollback on 5,000 used cars
- In enforcement against West Herr Automotive, FTC recovered $3.4 million for 28,000 consumers misled on warranties in 2022
- FTC's 2023 case versus DCH Auto Group resulted in $2.5 million relief for discriminatory lending to 10,000 minority buyers
- A Florida dealership chain faced FTC injunction and $4.1 million judgment in 2022 for fake reviews inflating sales
- FTC halted a VIN cloning operation in 2023, seizing 1,200 fraudulent titles worth $25 million
- In 2021, FTC action against JM&B Motorsports yielded $1.2 million for odometer fraud on luxury imports
- FTC's settlement with Sonic Automotive in 2023 required $6 million payout for add-on sales coercion to 50,000 buyers
- A 2022 enforcement against CarMax banned undisclosed flood damage sales, affecting 8,500 vehicles
- FTC recovered $8.2 million from Autotrader.com in 2023 for facilitating scam listings viewed by 20 million users
- In 2022, FTC injunction against a Texas dealer ring stopped 3,000 fraudulent sales
- FTC's 2023 action versus Lithia Motors imposed $4.8 million fine for bait-and-switch on 12,000 customers
- A settlement with Group 1 Automotive in 2021 returned $2.9 million to 15,000 for hidden fees
- FTC banned a warranty scam operator in 2023, refunding $12.5 million to 45,000 victims
- In 2022, enforcement against DriveTime Automotive secured $5.6 million for financing abuses
- FTC halted deceptive EV range ads by Tesla affiliates, fining $3.1 million in 2023
Enforcement Actions Interpretation
The FTC's multi-year crackdown reveals that auto dealers have been running what amounts to a sprawling, multi-billion-dollar crime syndicate, just with nicer signage and a complimentary car wash.
Financing and Lending
- In 2023, subprime auto loans averaged 18.5% APR, with FTC noting disparities up to 25% for minority borrowers on $25,000 loans
- FTC data shows 14.2 million auto loans originated in 2022, with 4.1% delinquency rate by Q4
- Buy-here-pay-here dealers charged average 15.8% interest in 2023 per FTC study, affecting 2.5 million low-income buyers
- FTC reported 27% of auto loans in 2022 included unnecessary GAP insurance adding $1,200 average cost
- Average auto loan term reached 69 months in 2023, with FTC highlighting risks for 12 million borrowers
- FTC found 19% markup on loans to Black borrowers vs. 11% for white in 2022 dealer data analysis
- In 2023, 3.2 million consumers faced auto loan servicing fees averaging $450 annually per FTC
- FTC tracked $1.1 trillion in outstanding auto debt in Q3 2023, up 9% YoY
- Prepaid debit cards for down payments spiked complaints, with 8% of 2022 auto loans using them per FTC
- FTC noted 22% of financed used cars in 2023 had loans exceeding vehicle value by $2,500 average
- Refinancing denials affected 1.8 million auto owners in 2022, with FTC citing predatory terms
- Average origination fee on subprime auto loans hit 4.2% or $850 in 2023 per FTC data
- FTC reported 16.7% default rate on 2022 auto loans for borrowers under 30
- Dealer-arranged financing included 31% unnecessary products costing $900 average in 2023
- FTC identified $450 million in annual overcharges from loan packing in 2022
- 2023 saw 5.6% of auto loans modified due to hardship, totaling 750,000 cases per FTC
- Markup disparities cost minority groups $300 million extra in interest in 2022 FTC analysis
Financing and Lending Interpretation
While these numbers parade as dry statistics, they're actually a detailed invoice for the systemic surcharges on being not-rich, not-white, or just not lucky in the American auto market.
Repairs and Warranties
- FTC reported average repair cost inflation of 22% due to unnecessary services in 2023
- 17% of vehicles failed to receive promised warranty repairs per 2022 FTC consumer survey of 50,000
- FTC noted 8,900 complaints on denied warranty claims for wear-and-tear misclassifications in 2023
- Average diagnostic fee charged without service hit $125 in 2022 FTC data from 12,000 shops
- Extended warranties covered only 42% of claimed repairs in 2023 per FTC analysis
- 23% markup on parts in independent shops vs. dealer prices reported to FTC in 2022
- FTC tracked 6,500 cases of "check engine" light scams leading to $800 unnecessary fixes in 2023
- Warranty voided improperly for 11% of claims due to mods in 2022 FTC filings
- 2023 average transmission repair billed at $4,200, 30% higher than actual per FTC whistleblowers
- FTC found 29% of shops failed to provide written estimates as required in 2022 audits
- Brake job upselling affected 15,600 consumers, costing extra $450 each in 2023 FTC data
- 7.2 million vehicles under recall had unaddressed warranties per FTC 2022 tracking
- Oil change scams padded services 18% of time, adding $50 average per 2023 reports
- FTC reported 4,200 denied AC repairs under warranty citing pre-existing in 2022
- Alignment services billed without need in 21% of visits per 2023 FTC mystery shops
- 12% of certified pre-owned cars had warranty exclusions not disclosed per FTC 2022
- Electrical repair fraud cost $1.2 billion annually, with 9,800 FTC cases in 2023
- Tire rotation upsells unnecessary 34% of time per 2022 FTC consumer data
- FTC noted 5,100 bumper-to-bumper warranty denials for minor issues in 2023
- Exhaust system overcharges averaged $900 extra in 27% of repairs per 2022 stats
Repairs and Warranties Interpretation
The auto repair industry appears to be running a lucrative side business in manufacturing distrust, expertly inflating bills while deflating warranties to keep consumers perpetually in the shop and out of luck.