Being in the auto dealership industry presents unique benefits and challenges. For one thing, retail automobile dealers enjoyed up to $1.2 trillion in sales in 2023. However, being an auto dealer can also be difficult, especially with the rapidly changing legal landscape of the sector. To understand the key challenges dealerships face, here is a list of three of the most pressing legal challenges auto dealers must address.
Consumer protection laws
Consumer protection laws are designed to safeguard buyers from unfair practices, and recent updates have significant implications for auto dealerships. One of the most impactful is the Federal Trade Commission’s Combating Auto Retail Scams (FTC CARS) Rule, which became effective in July 2024. This rule targets deceptive practices such as bait-and-switch tactics and hidden fees. It protects consumers from add-on charges that do not benefit them directly.
Evolving regulations on autonomous vehicles
The rise of autonomous vehicles (AVs) presents new regulatory challenges for auto dealers. In California, the Department of Motor Vehicles has established comprehensive regulations for testing and deploying AVs. Auto dealers need to stay informed about AV models that comply with these rules.
Evolving regulations on electric vehicles
It’s not just AVs that auto dealers must worry about. Continued development of electric vehicles (EVs) also poses new legal challenges for auto dealers. California has set ambitious targets for EV adoption, including a mandate that all new cars sold in the state be zero-emission vehicles by 2035.
These legal challenges may be daunting but not impossible to overcome. By understanding and adapting to these regulations, auto dealers can ensure compliance and capitalize on new opportunities in the evolving automotive market.