Auto Dealership Compliance In Today’s Regulatory Environment

 

Can we stop having this conversation now?

 

Every time a regulator takes action against dealerships, someone says, “That only happens to the big groups.”

 

No. It doesn’t.

 

The recent FTC warning letters about deceptive advertising went to “97 Auto Dealership Groups.”[1]

 

With a little help from ChatGPT, here is some relevant information:

 

  • Of the 97 mentioned in the press release, there are approximately 88 operating entities. For example, Serra Automotive includes Serra Toyota, Serra Kia of Trussville, Serra Honda, Serra Chevrolet Buick GMC of Nashville. McGrath, Page, John Sisson, and Greenway also had multiple mentions.
  • Dealerships 1-5 locations is about 57 entities or 65% of the total
  • Dealerships 6-20 locations is about 17 entities or 19% of the total
  • Dealerships 21+ locations are about 14 entities or 16% of the total

 

The data does not support the argument that regulators focus exclusively on large groups. In fact, nearly two-thirds of the entities identified operated five or fewer locations.

 

Further analysis of the FTC list shows:

  • Urban/suburban: about 56 entities, or 64%
  • Mixed urban-rural footprint: about 22 entities, or 25%
  • Rural/small-market: about 10 entities, or 11%

 

It is a common misconception urban dealers are the only ones who should be concerned here.  The statistics show otherwise.

 

The larger groups account for well over 1300 locations in aggregate.   If you use the number 17,000 as a rough estimate of franchise locations, then these letters from the FTC represent their notifying almost eight (8%) of the dealers in the US.

 

ChatGPT:  “There is also a clear brand pattern in the raw FTC list. Even before normalization, the store names show repeated appearances by Kia, Hyundai, Nissan, Honda, Toyota, Volkswagen, and Chrysler-Dodge-Jeep-Ram rooftops. That does not prove brand-specific misconduct. But it does suggest that the FTC’s screening likely surfaced common digital-advertising behaviors in volume-heavy mainstream franchise channels, where incentive language, add-ons, dealer financing conditions, and third-party listing feeds tend to create the greatest pricing-disclosure risk.”

 

I agree.

 

The above-mentioned statistics are not absolute and you may be able to find holes in the data as LLM are prone to mistakes. However, taken in context, they should absolutely erase the common misconceptions that only the larger groups should pay attention here.

 

If you still believe this was a one-off event, consider the FTC’s own public statements about its enforcement priorities.

On April 15, 2026 the FTC sent out a press release.[2]

 

Here are two (2) highlights:

  • “The Federal Trade Commission testified before the Senate Committee on Commerce, Science and Transportation today to highlight the agency’s accomplishments in the last year and a half and its ongoing work to protect consumers and promote competition on behalf of the American people. These accomplishments reflect the agency’s continued work in support of the Trump-Vance administration’s pro‑consumer, pro‑competition agenda, which prioritizes lower costs, fair markets and accountability across the economy.”
  • “As part of the agency’s broad mandate to protect consumers, the FTC has worked to combat deceptive fees that drive up costs in areas ranging from automobiles, online food delivery, concert tickets and online subscriptions. The Commission is fighting for consumer privacy rights and working to stop illegal robocalls and telemarketing scams.”

 

For years dealers treated digital advertising as a marketing issue. Regulators increasingly view it as a compliance issue. That distinction matters.

 

Practical takeaways should be to review:

  • Website pricing disclosures (if any)
  • Third-party listing feeds
  • Payment advertising
  • Conditional rebate language
  • Add-on pricing and disclosures
  • Lead generation vendor practices
  • If/how insurance would cover a regulatory inquiry

 

The argument that “we are too small to be a target” should now be retired.

 

The FTC did not send warning letters exclusively to mega-groups. The data shows the exact opposite. Dealers of every size, in every market, and across multiple brands appeared on the list.

 

The dealerships that understand that lesson today will be in a much better position tomorrow.

 

End of discussion

 

 

[1]  https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-warns-97-auto-dealership-groups-about-deceptive-pricing

[2] FTC Testifies Before Senate Commerce, Science and Transportation Committee | Federal Trade Commission

 

Tom Kline has recently written two other articles about auto dealer FTC compliance. Click below on the article names:

FTC Compliance for Auto Dealerships

Auto Dealer FTC Compliance