We would wager our combined annual salaries – a sum roughly equal to the value of a half dozen donuts from Krispy Kreme – that every single soul reading this website has a story or three about being blitzed with products in a dealer’s F&I office. Vehicle etching, useless warranties (sorry – this paper only covers mechanical fuel pumps), and p-packs up the wazoo are the bane of most shoppers’ existence when trying to buy a car.

Make no wonder some people call it the “Effin’ Eye” office.

This environment may change if the Federal Trade Commission gets its way. According to a report by Automotive News, a new proposal by the FTC would ban finance/insurance coverage and physical vehicle add-ons “that provide no benefit” while also requiring expanded disclosure on such items.

The commission’s notice of these proposed regulations was approved by a 4-1 vote earlier this week, said AN. An accompanying news release described some physical additions and F&I products as unfair add-ons, though the quartet of commissioners who voted in favor of these proposed regs did acknowledge that “not all add-ons provide no value.” Some of the items which rankled their feathers included misleading motor vehicle advertising, financing paperwork falsification, and so-called yo-yo financing practices.

“As auto prices surge, the commission is taking comprehensive action to prohibit junk fees, bait-and-switch advertising and other practices that hit consumers’ pocketbooks,” FTC Bureau of Consumer Protection Director Samuel Levine said in a statement. “Our proposed rule would save consumers time and money and help ensure a level playing field for honest dealers.”

Stated on page seven in the document linked above is a statement that the National Auto Dealers Association (NADA) suggests dealers averaged a profit of $2,444 per vehicle in pre-pandemic times, with more than half that profit coming from the F&I office. Today’s figures are surely skewed differently, what with obscene dealer markups on retail units being the norm rather than the exception. Your author has personally viewed deals with over $20,000 gross when counting both the front and back ends. And that was on a fairly pedestrian vehicle, not a bazillion-dollar hypercar. Gross, indeed.

A former colleague of this writer used to intentionally refer to the Business Manager at our store as the Finance Clerk, a term guaranteed to make the man’s blood pressure rise since he saw himself as a cornerstone of moneymaking operations at the place. While he did sell his share of WearCare and nitrogen-filled valve stem caps (seriously), there was always the overarching argument that his high-pressure tactics ‘in the box’ routinely scuppered scores the shopper would give on the brand’s follow-up survey, tanking any hope of a quarterly bonus even though the customer had little issue with the salesman himself.

How about you? Any horror stories from the Effin’ Eye office? Sound off in the comments below.

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finance/insurance coverage and physical vehicle add-ons “that provide no benefit” while also requiring expanded disclosure on such items.

Why sir, the ScotchPlus for $499 provides much fabric benefit. The Glass Etch Pro at $289 provides much security benefit.

There, they’ve worked around the new ban.

Exactly, this will have have zero teeth or be written in such a way that its basically never going to get enforced.

Dealers in FL already get around this stuff thanks to FL 501.976 which contains a clause that allows dealers to use a blanket disclaimer that certain “fees” represent profits to the dealer. Its purely a money grab but all it takes is an asterisk to get them off the hook.

Don’t forget that the factory applies that Tru-k…

“FTC to crack down on F & I”……Bawahaha

Only 40 – 50 years too late. How many million have been conned and stolen from?

I’m old enough to remember when GM dealers would ‘pack’ MIC(Motors Insurance Co) Physical Damage Insurance(Collision and Comp) into all the finance contracts. Few people caught it. A & H(Accident and Health) Ins coverage as well. Most dealers had a licensed insurance broker/agent right on the premises.

The simple solution for these offers used to be the word “no”.

Now we need regulation to protect people who don’t know how to say that word.

Exactly! I don’t know how many “NOs” I had to give when leasing a 2017 Lexus!

I’ve had dealers tell me “sorry but we charge everyone for these items, if we don’t we could get in trouble”. They quickly claim it would be considered discrimination if I didn’t pay and someone else (who was different) did get the charge. Nice try buddy no f*ing way. In the past a dealer might just discount the bogus add-on cost from the vehicle’s sales price as a way to offset it, but in today’s car market? Not happening – as there is a line of people begging to pay whatever it takes to have the last shiny thing on the lot so dealers aren’t removing the “appearance package” line item. My local dealer doesn’t even define what the “appearance package” is on their website because they know its bogus has represents ZERO value. Guess they will add $1,200 to my trade (after appraisal) when I inform them my trade has this extremely valuable appearance package too LOL

“They quickly claim it would be considered discrimination if I didn’t pay…”

Proposed response: Wow, you’re so right…discrimination sucks, and it would be discriminatory of me not to shop every other dealer in town. Thanks for reconnecting me with the better angels of my nature. Call me when you are ready to do business.

I’ve had this kind of line laid on me so many damn times over the years…if they said, “yeah, we’re being greedy,” I’d probably give them some grudging respect for being honest. But your best friend in any car dealership is always your feet.

They pull the same bullshit with the ridiculous “Dealer Fee”

“We have to charge it. It’s required by the state.”

Right but we already know most buyers are crazy intimidated long before the F&I and already lost their sh!t, as if they might get told; “No, no overpriced, underbuilt junk for YOU!!” like Soup Nazi style.

It’s stupid. I’m sure 99% are perfectly normal, cool the rest of the time, under any circumstances.

“The simple solution for these offers used to be the word “no”.”

You cannot say n-word at dealership, it is impolite.

This sounds just like the sort of language you get when legislators tell industry lobbyists: “Hey, I need to tell the constituents I did something about your unpopular clients. Tell me my options.”

+1 its purely lip service to consumers. The F&I office is a profit center and dealers will grease whoever it takes to keep the gravy flowing.

I think I’d be more interested in regulations that clearly explain why borrowers’ interest rate is what it is, what factors went into it, and how the rate being offered based on the applicant’s financial profile compares to the rate being offered by the same dealership to applicants with similar profiles.

That would be useful info. This stuff? Meh. As far as add-ons are concerned, the dealer just has to explain that Tru-Kote (yep, there’s that phrase) has an actual purpose. At the same time, though, they’d have to also explain how nonsense like “Denver market adjustment” benefits the buyer…though we all know they’ll just charge more for the nitrogen filled tires if they can’t get away with “market adjustments” anymore.

But explaining why the borrower’s rate is what it is? Yeah, I’d be all for that.

In 2003 I worked at a Dodge Chrysler Jeep store and purchased a new 2003 Dodge srt-4 for invoice ($900 discount off msrp). My coworker, the f&i guy got my loan lined up and told me that “the bank will lower your interest rate from 7.5% to 5.5% if you purchase the $2000 extended warranty, you are young, and the bank is worried you could possibly miss some payments due to unexpected repairs after the warranty has expired.” I replied, maybe this is too much vehicle for me, told him to unwind my deal, and got up to leave his office and go back to work. He told me to sit down, he’ll call the bank about getting me the 5.5% rate without a warranty. He didn’t call anyone; he just lowered the rate to 5.5%. He was trying to high gross me, even though I was his coworker.

I wish I could find this story incredible, but after my brief stint selling cars back in the ’80s, I find it completely believable. Some of these a-holes will steal candy from their kids…whose mothers, not coincidentally, probably haven’t seen child support in the last two years.

A few years ago, I bought an off-lease Audi A3 from Echo Park. I was picky about the car – used A3s are often hooned into decrepitude, so I wanted a certain ownership history, mileage, equipment set, etc, and this a particular car had it all. It also had the Audi prepaid maintenance package on it from the last owner, which is a boon for any used Audi, so I zeroed in on this particular car. I lined up financing through an outside lender, and the F/I guy quoted me a significantly higher rate. And then he informed me that they “don’t allow shopping for financing” – which, of course, is absolute nonsense, and illegal to boot, which I told him in no uncertain terms. The F/I guy – who I think was moonlighting from his night gig selling weed at Starbuds – asked me how I came to that conclusion, and I pointed him to my credit application. Job title: Mortgage Underwriter, 20 years in lending business. I know lending laws. But he stuck to his guns. No rate-shopping soup for Mike.

As I said, I wanted this particular car, so I figured I’d give the “corporate escalation” call a shot before I gave up and went elsewhere. I called the corporate offices and threatened to sic the local consumer reporter on them. An hour later, the GM from the dealer called and said they were matching the outside rate I got.

Then I asked them if I could take the car to a mechanic to have it checked out, and sure enough, they said they don’t allow that either. Another call to the GM, and that BS went by the wayside as well. I ended up buying the A3 from them, but if it came down to buying from them again, or Hitler Youth Motors, I’d go with the Aryan squad.

And people wonder why the direct-to-consumer sales model is appealing?

I had the same thing happen to me, I just bought the warranty to get the lower rate, then canceled it for a full refund a bit later. For those who don’t know, the factory backed extended warranties can always be canceled. YMMV on the 3rd party ones.

I probably could have accomplished the same thing by being a bit more of an ass in the F&I office, but in the interest of time and simplicity I just went with the flow.

I had an F&I guy make me fill out a finance application when I was paying cash for the car because he got a kickback from the bank from each contract submitted. It would have left me with a check on my credit profile with no matching loan that would have affected my credit score. Fortunately when he left the office to “speak with his manager” I had the presence of mind to take it off his desk. Not today VW of Keaney Mesa, not today!

FYI, the credit hit would be a few points. Not a biggie.

But, hey, if he was willing to throw something in for my trouble, then maybe I’d have done it. How about a set of those VW monster mats (they’re nice – I have them in my GLI)? First aid kit? Otherwise…sorry, bro.

Regardless of how few points it’s still wrong. IMHO this was an irresponsible and unethical practice. He wasn’t offering anything in exchange for it either. Quid pro nihilo!

Oh, I agree that it’s wrong. And I’m sure that my “price” for pulling my credit wouldn’t be worth his time. But what’s good for the goose…

How long will such a discrepancy affect your record? Just wondering for future reference.

I let a large luxury-brand dealer do this a few years ago. My credit was still fine with the spurious application on it but in hindsight it still rankles and I should have walked out when the dealer asked to run the check.

I think an effective response to that would be, “No problem. I’ll just send a letter to each of the credit reporting agencies explaining that they shouldn’t apply it to my credit score because it wasn’t a serious application.” Then, the dealer and his F&I guy can try to explain their scam to the bank.

I’ve had a range of experiences with F&I salesmen. Most have offered their products but haven’t pressured me when I declined them. The most egregious exception was our most recent acquisition, a 3-year-old AWD Sienna, from the Subaru part of a dealership that also sold other brands. Their F&I guy pushed several things on us such as an extended warranty (“The average repair cost in our shop is $2,000.”) and prepaid maintenance (We moved 1,200 miles away before it would have expired.) After our initial rejection, the salesman offered to cut the price of the warranty in half. (My wife wondered why he didn’t offer the lower price up front. Tells you how much dealer profit is built into those things.) The salesman became quite insulting when we refused to buy anything but the van itself and paid cash for it.

I believe that dealerships have cultures that outlast the careers of individual employees. On two occasions, 40 years and 25 years earlier, I tried to buy a car from the same dealer and encountered the same attitude which was that buying a car from them was a privilege for which I should be grateful.

I agree. I had similar dismissive experiences from the same local Honda dealer in 2003 (which led me to buy an Acura TSX) and 2019. In 2003 I was told (without having disclosed any financial information) that an Accord V6 was more car than I could afford. In 2019, now old enough that they didn’t assume I was broke, I was told that I couldn’t reserve a Pilot allocation in advance and that I would just have to wait until they felt like selling me one.

With both of my last two purchases (VW and then Mazda from the same dealer), once we settled on the price…less wiggle room on the recent one given the current new car buying process, they presented an iPad with post-sale options on an internal website. They included the maintenance plans, security options, dealer accessories, paint protection, fabric protection, and other F&I goodies. Basically, at your own speed, you can scroll through the options and select any that you might want. And if you don’t want any, check that box and hand the tablet back. Thankfully no pressure and very easy to decline.

The funny part is the sales guy tells you the vehicle your buying is great and never breaks down. Once you agree to purchase the F&I guy tells you if you don’t get the gold package warranty the engine is going to explode tomorrow and you’ll be out thousands of dollars. Total FUD. Stuff like this is why people HATE buying a car so much, the whole process is a serious of lies built on a foundation of falsehoods. Its an insult to your intelligence.

As to why dealers continue these games I have this insider tidbit: I worked at a place that printed materials for http://www.jmagroup.com – they are a dealer service that focuses on growing dealer profits. So there is an entire industry dedicated to F&I rip offs. So despite the scammy nature of these fake packages they clearly work as clueless buyers must be paying for them or dealers wouldn’t sign up for these programs.

Lol exactly. One F&I whore said “Do you really want to expose yourself without extended warranty coverage?”, to which I replied “Do you really have that little faith in your highly self-touted product?”. He was speechless.

The only conscious purchase I’ve ever made in an F&I office other than the paper for the car itself was the wheel/tire warranty I haggled on my 2019 Accord Touring 2.0T, of the rubber-band-tires persuasion!

It’s paid for itself!

i made sure to point out his nice eames chair. gotta sell a lotta crap to afford a $1000 seat

Smoke and Mirrors juggling act to keep your attention away from the real issues. Rampant inflation in food and energy, falling real wages, horrendous fentanyl and mental health crisis and run away nation debt with associated currency devaluation.

They will have hearings and blue ribbon commissions and in the end a milk toast bill will emerge with another department of bureaucrats that will do nothing but build a website where you can log complaints that will be bogged down in a bureaucratic mire of nothingness.

But hey, it felt good.

It’s been going on for a decade. You just notice now?

Caddy, Smoke and mirrors indeed. In addition to the items you mentioned, if the U.S. dollar loses reserve currency status we are all in trouble.

I’m sure the highly-compensated NADA “lobbyists” will make sure this gets shot down.

I did purchase extended warranties on my last two used cars. Within two years they paid for themselves. As long as the warranty is through the manufacturer and not a third party, even if the car in question is a reliable make, they can be a good investment.

I did purchase extended warranties on my last two used cars. Within two years they paid for themselves. As long as the warranty is through the manufacturer and not a third party, even if the car in question is a reliable make, they can be a good investment.

I agree, I have always added extended warranty to me new and used car purchases at the time of sale. They have always paid for themselves by the time I’ve used up the car.

My current car (a ’16 FiST), had an issue with some suspension components at 67k miles and a cat-converter at 92k miles….all covered with a $100 deductible via the 100k extended warranty (with I paid $950 for at the time of sale for the car new).

I just figured it out, they’re all criminals! My F-150 was decked out and I told them to take it all off. They pulled the alarm but left the wiring harness, so I just bought one that used the same plug, $25. Except they left the Ford bedliner and running boards.

And now that carpeting in vehicles resembles the low-budget Michael’s black felt under the best of circumstances, along with floormats which will wear-through in 100 miles, all-weather mats are the obvious descendants of the “fine, idiot, I won’t dicker anymore over the price, but you’ll throw in a set of mats” games! (The OEM mats in my Dad’s 1991 Accord might as well have been Wilton wool compared to today’s offerings!) Bonus if the dealer sells WeatherTech or Husky mats, and you can get them below dealer cost!

To have a good luck with your new purchase you have to turn into yes man when you enter dealership. Try it once – you will be amazed with results.

I haven’t had any abusive interactions with the F&I ass, but then when I go to I dealer I am very clear what I an looking for, in fact I go in with stock numbers that I want to see. During a purchase 2 years ago I walked into the F&I guy office and began the interaction by saying “Do not offer me any additional products, I am only buying the car, anything else is a no. If you start to talk about other products the deal is off and YOU can explain to sales why you scuttled the deal.”

Interestingly enough, when I bought my college age daughter a new car last month the dealer in question (and it was Mitsubishi – let the flames from my fellow readers begin) this dealer did not even have an F&I guy, the sales people handled the paperwork. A pretty good way to do it actually.

Ha. Mitsu probably couldn’t afford to hire an F&I guy.

And there’s the first flame! Thanks for not disappointing!

I’m going to give you more ammunition to jump me. I bought her a……Mirage Hatchback!

A Mirage is not a bad choice at all for a college kid.

I think it’s a very good choice for a first car and a first car for a college senior. For the money you get very good warranty coverage, excellent gas mileage and a pretty good equipment package. I get it, Mirage’s are everyone’s punching bags but it’s a econo-car focused on low cost of operation – and does it very well. The 78hp engine? Works pretty well with the CVT. It’s acceleration isn’t the best out there but it works just fine AND highway speeds aren’t an issue. This car cruises at 75 (on Florida interstates) with the tac showing 2500 rpm.

Make fun if anyone wants, but the Mirage IS a good car.

Actually you get a hat tip because that Mirage will be perfectly reliable for 150k+ miles easily. I didn’t want to be ‘that dad’ who bought their kid a new car, but the reality was that the trip each way to college was 200 miles and I didn’t want her stranded for any reason on the road. Plus as a new driver she got the benefit of the newest safety and driver aids.

On topic, I look forward to the day state franchise laws are discarded and the manufacturers can go to direct sales.

Once I settled on a specific model, my last 3 new car purchases have all been via email, with my only appearance at a dealership (besides test drives) when it’s time to sign the papers and grab the keys. In each case I was out of there in 15-20 minutes, and they knew the add-on season was moot and didn’t even try. If they could beat my credit union’s rate, great, but usually they couldn’t without some other gimmick.

Being kind but firm and having a strong credit score helps.

As stated up-thread, I bought the wheel/tire warranty, and even discussed it with my salesman and the F&I guy when I ordered the car.

When I sat down with the F&I guy, he advised me that the dealer required him to present a menu of three levels of various warranty add/ons, no pressure to buy, in a respectable manner. Took a second to look them over, initialed the box declining the services except for what I’d already agreed, and that was that! Easy-peasy!

And yes, any new car will be reasonably decent for several years, especially an econobox with less gadgets to break.

I was looking for a basic Tacoma without all the dealer added stuff. Every time I’d check the local Central Florida dealership’s websites, all they had were 4×4 with a $2500 tire and wheel package and fancy nav system. And they would throw on light bars and winches and running boards and all sorts of crazy additions for big markups. I finally found a plain jane Tacoma with no fancy anything on it. When I went to the dealership, they could not find the truck. Eventually we found it mixed in with their fleet vehicles. The local utilities always wanted their trucks in white, but somehow this one slipped through in red. “I’ll buy it.” They wanted MSRP plus a dealer fee, and I managed to negotiate down to a few dollars under MSRP + dealer fee. Throw in tax and tag, and it was a fair deal. So when the F&I guy started, his spiel was to add on a big extended warranty plan, and then knock some money off the inflated add on options. With no add on options, all he could do was try to sell me a $3000 extended warranty. “No, thanks. Here is my check for the agreed amount.” He took the check and the paperwork “upstairs” and left me sitting in his office, with the truck’s keys. Some other management poobah then came in with the F&I guy and tried to tell me that they could not sell the truck since it should go to the local utility company. They’d like to show me another truck. “I signed that sales agreement and handed your guy a check. And I know that the local utility does not have any red trucks. So go ahead and tear up my check, I’m leaving.” They left to confer some more, and finally the F&I guy came back in and made one last half-hearted effort to sell me the extended warranty, now at a discounted price of only $2500. “We’re going to lose money on this deal!” “Not my problem. Hand me the keys or tear up my check.” Had that truck for 8 years now and will drive it till the wheels fall off.

When I bought my 2nd truck I had to tell the dude to STFU or he was going to loose the sale. I had negotiated a price and was paying cash. They wanted my old truck on trade.Every angle they tried just pizzed me off.

Another time I was thinking of trading my truck on a new one. My “old” truck had aftermarket light bar, bull bar, running boards, aluminum box liner, wheels,/tires and stereo. He low-balled me and with a straight face said the “add-ons” don’t alter the price at all. I said, “Okay, I’ll take your offer but I’ll be back in 4 hours”. He’s all excited, “why can’t we do the deal now?” I replied, “4 hours gives me enough time to remove my accessories since you said they have zero affect on price”. He started to stutter and stammer. I laughed at him and told him to shove his truck up his azz.

Brilliant! Since I wax my truck it has the “paint protection” already apply to that adds $2,000 to my trade in right?

My story is from today. I just leased a car for my daughter and the dealer straight up told me they mark up every car $1000 over sticker – because they can.

Every dealer in the area is doing the same thing or worse – seems cartel-ish.

The F&I guy didn’t even bother to try to sell me anything additional.

So long as inventories are tight, the F&I guys don’t seem pressured to add on like they used to.

When I was searching for a ZR2 most were on order so I was able to stipulate ZERO dealer add-ons. A few still tried to push their typical stuff.

I had enquired with one dealer about a ZR2 they had in stock on their web site. It was a base model. They said they’d get back to me on the price. I rechecked the web site and that vehicle went from 55,400 to 62,000. I finally got a call from the lot lizard. He claimed they sold the lower priced model. I pointed out that the spec sheet, lot number, and VIN number had not changed. He hung up on me.

“Every dealer in the area is doing the same thing or worse – seems cartel-ish.”

This is the problem I’ve encountered over the last year. With inventory so low you can’t even threaten to go somewhere else. If a dealer has something (anything) they have the upper hand and call all the shots. I’ve had dealers straight up ignore me (in person, over the phone, via email, via text) because I asked for MSRP.

@JMII – I’ve experienced the same thing. I tried to get a truck through the small dealer chain my son works for. They couldn’t get what I wanted. They called in a big favour owed by the large Chevy dealer. The sales manager agreed to personally deal with me. One month later. Nothing. He called them to complain that I had not showed up. He was reminded that he agreed to deal with me directly. A lot lizard called me that day.

I went in and never saw the manager and got hit with a “Bait and Switch” move. We CAN get you a 2.7 TrailBoss for 55k or a 75k diesel TrailBoss but not a diesel Colorado.

I took the sewing machine TrailBoss for a test drive. The 8 speed at times was clunky and could be made to gear hunt. It had zero compression braking.

I told them I didn’t want it. They claimed I could get a V6 ZR2. I asked for a diesel. He claimed they’d search for me. Never got a follow-up call or email.

Most dealers sell aftermarket warranties in which the dealer owns the company. They also set the company up in the Bahamas for lower taxes.

“TTAC Commenters Hate Small Business, Hate Free Enterprise and Hate America”

We gave you free coffee, and this is the thanks we get?

(where is Ruggles when we need him)

(where is Ruggles when we need him)

Does Satan ever let people out on bad behavior?

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