Many dealerships have cleaned up pricing advertising since the Federal Trade Commission’s warning to 97 auto retailers in March, but compliance experts say there are more regulatory hurdles ahead.

Advertising scrutiny from the FTC and other regulators will continue in 2027. Privacy, artificial intelligence and finance and insurance practices also are potential compliance risks that could expose dealers to regulatory fines and legal action, experts said.

“I think advertising issues are far from played out,” said Brad Miller, co-CEO of dealership compliance firm ComplyAuto.

Dealers fix pricing ads after FTC letters

Dealers must advertise prices that contain all mandatory charges, such as document fees, with the exception of government taxes and fees, Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, wrote in letters to the 97 groups. Advertised prices must be available to all consumers and can’t be contingent on specific down payments, dealership financing or nonuniversal rebates, he wrote.

“We’ve seen a lot of folks trying to do the right thing in their advertising to put the fees in,” Miller said.

In an informal Stephens survey of about 50 dealers, more than half said at least 61 percent of their competitors were violating the FTC’s price requirements before April 1. That flipped by September with 70 percent saying at least 61 percent of competitors were compliant.

“It level-sets the playing field for all of us out there,“ Asbury Automotive Group CEO Dan Clara said of the FTC’s advertising rules during an Oct. 27 earnings call. ”I view this as very positive. It will continue to enhance the guest experience and those that don’t want to abide are going to be left behind.”

The FTC has encouraged dealers to report competitors in violation of the agency’s advertising rules.

“I’m really curious to see, over the next six months moving into ′27, how dealers handle the other dealers that are not compliant,“ Shannon Robertson, executive director of the compliance and certification provider Association of Finance & Insurance Professionals, said in October.

Regulators won’t need a multimillion-dollar fine to push dealers to comply, the informal survey suggests. Twenty-seven percent of dealers said a fine in the $500,000 to $1 million range would be enough to trigger compliance, and another 38 percent thought a fine below $500,000 would suffice.

Price and fee transparency will continue to be an issue in 2027 at both the federal and state level, said Adam Crowell, chief legal and strategy officer for compliance consulting firm KPA.

The scrutiny also could extend to reach dealership service departments, such as with an advertised price for an oil change that omits shop fees, Crowell said.

The FTC letters gave attorneys general “a push” to dig into dealership advertising, said Seth Dobbs, partner and chair of the automotive practice at the Fox Rothschild law firm. He’s seen his clients’ dealership ads subpoenaed in search of discrepancies between advertised prices and transaction amounts. Tools such as the Internet Archive’s Wayback Machine provide access to ads that a dealer might have pulled, he said.

New Jersey poses a particular risk to dealers. The New Jersey Consumer Fraud Act deputizes private attorneys to represent the attorney general’s office and allows triple damages for losses tied to regulatory violations, Dobbs said. Business owners there also can be held personally liable even if the company is incorporated, he said.

Privacy could be a dealership pitfall in 2027

Privacy issues also could emerge for dealers in 2027, Crowell said. That represents “the next big wave” for dealers from a compliance perspective, Dobbs said.

Dealerships face a liability risk if they or their vendors fail to protect customer data, Dobbs said. The issue is “going to be widespread,” he said, citing the large number of software providers that have access to dealership consumer data.

Some new or amended state privacy laws take effect in January, Crowell said. These include a California bill barring citizen lawsuits for violations of state rules on capturing electronic messaging information, such as phone numbers, with websites and software. Effective Jan. 1, 2027, that legal power rests solely with the attorney general. The new law, amending the California Penal Code, is retroactive to all lawsuits filed in the past two years.

Crowell thinks the law could drive a rash of lawsuits from would-be plaintiffs trying to preserve their claims and challenge the statute.

“It seems almost counterintuitive, but we could see an uptick in claims that are being filed,” Crowell said.

States have grown more aggressive on privacy enforcement, Miller said. The California Privacy Protection Agency also could make an impact in the state and beyond. The agency is responsible for enforcing California privacy law, but it can also support other states under a multistate consortium agreement,Miller said.

“They’re going to be really active next year, I think,” Miller said.

AI could create hidden compliance risks

Dealerships are likely to discover unexpected compliance concerns related to AI in 2027, Robertson said.

“AI’s a great tool,” he said. “I just think that we need to be careful letting it run free, and we need to manage the implementation and ask questions along the way: ‘What’s the compliance risk?’”

Dealerships should prepare for AI regulation, Miller said. Dealers could face risk if they use AI to determine what discounts to offer a specific customer, fail to disclose that a customer is communicating with an AI agent and if employees give ChatGPT access to customer credit applications full of private information,Miller said.

F&I transparency a potential problem after Credit Acceptance settlement

Dealers also could face new transparency requirements following Credit Acceptance Corp.’s Sept. 17 settlement with 40 states and Washington, D.C. The states accused Credit Acceptance of allowing dealers to inflate vehicle prices and add finance and insurance products into deals or mislead customers those optional products were mandatory. The company denied wrongdoing.

The settlement requires the lender to have partner dealers who sell guaranteed asset protection or vehicle service contracts obtain customer signatures declaring the consumer is buying the coverage, that it’s optional and how itaffects payments.

Within 10 days of accepting a deal, Credit Acceptance must contact thecustomer in writing, cite the optional guaranteed asset protection and contracts in the deal and their cost and provide information on how a customer can cancel coverage.

Crowell said that customer notification could possibly happen with other lenders.

“And if that happens, now you’re going to talk about a trickle-down effect that will happen with the dealerships,” he said.

Regulators will keep scrutinizing F&I sales practices, such as products misrepresented as required, or added without a customer’s knowledge, Miller said.

“I think the F&I side is where sort of the next frontier is,” he said.