Half-Way Home for ASOTU, the Markets, the FTC, and You

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Today we bring you up to speed from a wild start to 2022 as we talk about what the trends in the markets, proposed FTC rules, and what one Dealer is doing to serve the community mean for you.

  • The first half of 2022 comes to a close, markets are down but not out
    • Worst performing market since 1970
    • The only notable item that is up are commodities like oil
    • All eyes are on inflation and the Fed as interest rate increases are the primary tool to stave off inflation
    • The good news is that all is not lost. In every year the S&P 500 dropped at least 15% the first two quartiers ( 1932, 1939, 1940, 1962 and 1970) it has risen an average of 24% in the second two quarters, according to Dow Jones Market Data
    • Take away: Although the markets affect all americans, we all know the story of Dealership profits are not tied at the hip with the S&P 500
  • The FTC is coming for Dealer Add-Ons and Advertising in new proposed rules in a June 27th notice of proposed regulations which passed by a 4 to 1 vote
    • New regulations would ban add-ons they determine add no value to the consumer
    • Would require additional expressed consent for add ons like Gap coverage, extended warranties that overlap the factory warranty, and other add ons
    • "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 June 27. "Our proposed rule would save consumers time and money and help ensure a level playing field for honest dealers."
    • The dissenting opinion cited unintentional consequences that would limit competition. New entrants such as Tesla were mentioned with the comments that any proposed bill would be incomplete even as its finalized
      • Bans all products without benefit
      • Requires dealers to post all possible add on options and prices online
      • Bans on misleading prices online
      • Disclosure and declination in writing of the "Cash Price without Optional Add-ons.
      • Express, Informed Consent" on F&I products and other add-ons
    • Take away: Although this would cause some pain if passed, it will build trust
  • Upstate NY Dealer puts on high speed charity event
    • Gault Toyota of Johnson City, NY went on a 4 hour blitz of their annual Gault Gives Campaign making 23 stops and giving out $50,000
    • GM Allan Eagles is the son-in-law of owners Bob and Connie Gault and said,
      “It’s to bring awareness to these nonprofits. A lot of people don’t know they exist. And they all do wonderful things. A lot of them need help, they need volunteer help. They don’t even need money help, they need volunteer help. And we bring awareness to what they do, where they are, that’s the goal”
    • Recipients were chosen through an application process and the donation amounts were determined based on needs
    • The program has been going since 2017 but this is the first time for this format
    • Take Away: Make sure you send this one to your local FTC rep :)

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