As NIADA referenced, the FTC estimated the mixed expense to automobile dealerships might attain $1.4 billion over a decade. It’s one among two cost-benefit eventualities the company provided the general public in its rulemaking proposal.
One FTC speculation — the one cited by NIADA — estimated dealerships would pay a mixed $1.36 billion between 2022 and 2032 to conform. The different forecast prices of $1.57 billion over the identical time. The largest aspect inside these estimates concerned dealerships spending $850.5 million or $994.4 million to disseminate numerous disclosures to prospects. Either calculation assumes a gross sales skilled paid $21.84 an hour spending 2 minutes getting ready and delivering every disclosure.
While dealerships might over a decade soak up greater than $1 billion in extra prices, the FTC estimated society would acknowledge greater than $30 billion in advantages. It forecast $31.08 billion in positive aspects over the last decade below its first cost-benefit state of affairs and $36.34 billion below the second projection.
“The Commission assumes that, as a result of the proposed Rule provisions prohibiting misrepresentations and requiring price transparency, each consumer who ends up purchasing a vehicle will spend three fewer hours shopping online, corresponding with dealerships, visiting dealer locations, and negotiating with dealer employees per motor vehicle transaction,” the FTC wrote.
The common employee made $27.07 an hour in 2020 and is proven by analysis to view their break day the job as price 82 % of hourly pay, in line with the FTC. Over a decade of tens of millions of auto transactions a 12 months, these 3 hours per deal at $22.20 an houradd up, the FTC stated.