Auto Rule NPRM Supporting Statement-FINAL-2022

Federal Trade Commission
Motor Vehicle Dealers Trade Regulation Rule
16 C.F.R. Part 463
OMB Control Number 3084-XXXX
Justification – Part A Supporting Statement
Overview of Information Collection:
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The FTC has issued a Notice of Proposed Rulemaking (“NPRM”) related to the sale,
financing, and leasing of motor vehicles by motor vehicle dealers and is requesting approval
for a New Collection for the associated information collections.
The proposed rule would (i) prohibit motor vehicle dealers from making certain
misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles,
(ii) require accurate pricing disclosures in dealers’ advertising and sales discussions, (iii)
require dealers to obtain consumers’ express, informed consent for charges, (iv) prohibit the
sale of any add-on product or service that confers no benefit to the consumer, and (v) require
dealers to keep records of advertisements and customer transactions.
The proposed rule includes information collection requirements that would require covered
entities to provide pricing disclosures as part of motor vehicle sales transactions and retain
records to demonstrate compliance with the proposed rule’s disclosure requirements.
1. Need & Method for the Information Collection.

The proposed Motor Vehicle Dealers Trade Regulation Rule would require accurate
pricing disclosures in dealers’ advertising and sales discussions, require dealers to obtain
consumers’ express informed consent for charges, and require dealers to keep records of
advertisements and customer transactions.
Providing consumers with accurate and timely pricing and financing information is
critical, especially in the context of motor vehicle sales and leasing, where such information has
proved singularly confusing to consumers. If buyers can see and compare the actual prices and
costs for the same or similar goods offered by different sellers, buyers can choose to visit the
seller that offers the terms most important to them, instead of wasting time and expense
exploring offers based on deceptive information. Proposed Section 463.4(a) would require a
motor vehicle dealer to disclose the true “Offering Price” of a vehicle in advertisements that
reference a specific vehicle or price or financing terms. Under the proposed rule, the “Offering
Price” of a vehicle means “the full cash price for which a dealer will sell or finance the motor
vehicle to any consumer,” excluding only required government charges.
Proposed Section 463.4(b) would require dealers to provide consumers with information
about optional add-on charges at each dealership and on any website, online service, or mobile
application on which vehicles are offered for sale. For optional add-on products and services,
proposed Section 463.4(c) would require dealers to disclose that the optional add-on product or
service is not required and a consumer can purchase the vehicle without the add-on. Section
463.4(d) would require dealers to disclose the total of payments when quoting monthly payment
amounts to a prospective buyer or lessee. Proposed Section 463.4(e) would require dealers,

when they compare different monthly payment options with consumers, to inform consumers
that a lower monthly payment will increase the total amount the consumer will pay when that is
the case.
The proposed rule also includes recordkeeping requirements to help ensure compliance
with the rule’s disclosure requirements. Section 463.6 of the proposed rule would require motor
vehicle dealers to retain for a period of 24 months the following records: all materially different
advertisements, sales scripts, training materials, and marketing materials regarding vehicle price,
financing, or leasing terms; all materially different copies of lists of add-on products and
services; consumer transaction documents such as purchase orders, financing and leasing
agreements (and related correspondence, including declination documents as required by the
preceding section); records to show compliance with monthly payment disclosure and add-on
sales requirements; written consumer complaints and consumer inquiries regarding add-ons or
individual vehicles; and other records needed to demonstrate compliance with this rule. These
recordkeeping provisions are necessary to ensure that dealers make required disclosures under
the rule.
2. Use of the Information.
The proposed information requirements are intended to ensure consumers receive
accurate pricing disclosures in motor vehicle dealers’ advertising and sales discussions and
ensure that dealers retain records of advertisements and customer transactions sufficient to
sufficient to demonstrate their compliance with the Rule and its disclosure requirements.
The rule’s recordkeeping requirements will assist the FTC in enforcing the proposed rule
and ensuring that covered motor vehicle dealers can adequately demonstrate compliance with the
rule.
3. Use of Information Technology.
The proposed amendments permit the use of any technologies that covered firms may
wish to employ and that may reduce the burden of information collection. In some instances,
however, the need to disclose transaction-related information to consumers at the point of sale
requires disclosures to be in hard copy; as such, electronic disclosure pursuant to the
Government Paperwork Elimination Act, 44 U.S.C. § 3504 note, is impracticable for such
disclosures.
For recordkeeping requirements, the proposed rule provides that covered motor vehicle
dealers may retain the required records in any legible form, and in the same manner, format, or
place as they may already keep such records in the ordinary course of business.
4. Efforts to Identify Duplication
Commission staff have not identified any other federal statutes, rules, or policies that
would duplicate the information collection requirements included in the proposed rule.

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5. Burden on Small Business.
The proposed rule applies to all motor vehicle dealers predominantly engaged in the sale
and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both, as defined
in Section 1029 of the Dodd-Frank Act. FTC staff anticipate that most covered dealers would be
classified as small businesses, as explained below. Mindful of this fact, the Commission drafted
the proposed rule in a manner designed to avoid imposing undue burden on small entities. In its
NPRM, the Commission also sought comment and information on the need, if any, for
alternative compliance methods that would, consistent with the statutory requirements, further
reduce the economic impact of the proposed rule on small entities.
6. Consequences of Conducting the Collection Less Frequently
The proposed rule requires covered motor vehicle dealers to provide mandated
disclosures at specified points during motor vehicle sales transactions. These disclosures are
necessary to ensure consumers receive accurate pricing disclosures when motor vehicle dealers
advertise vehicles for sale and at key points during sales discussions. The proposed rule would
also require covered motor vehicle dealers to retain specified records that are necessary to
demonstrate their compliance with the Rule and its disclosure requirements for 2 years from the
date the record is created. The Commission has sought to tailor this requirement to limit the
potential burden on covered entities. The specified records primarily consist of records that FTC
staff anticipate that dealers already retain in the ordinary course of business irrespective of the
Rule’s requirements, including records associating vehicle financing and customer contracts and
leases. In addition, the Commission has proposed a 24-month retention period to limit the
potential burden on covered entities.
7. Paperwork Reduction Act Guidelines.
The proposed information collection requirements are consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
8. Consultation and Public Comments.
The Commission is seeking public comment on the proposed information collection
requirements and its associated PRA burden analysis.
9. Gifts or Payment.
Not applicable.
10. & 11 Privacy & Confidentiality/Sensitive Questions.
The information to be disclosed is of a routine business nature, including for example the
sales price and financing terms applicable in motor vehicle sales transactions. Motor vehicle

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dealers routinely make this information available to the public. No personal or sensitive
information or commercially confidential information required to be disclosed.
12. Burden Estimate.
The Commission estimates that there are approximately 46,525 franchise, new motor
vehicle and independent/used motor vehicle dealers in the U.S.1
Estimated Annual Hours Burden: 7,816,819 hours
Estimated Annual Labor Cost: $221,870,782
Disclosure Requirements
The proposed rule includes disclosure requirements designed to curb pricing, leasing, and
financing-related deception and unfairness, particularly regarding the truthfulness of key terms
and the costs of add-on products and services and obtaining consumers’ consent to charges and
to promote competition by ensuring that transparent, law-abiding dealers are not competitively
disadvantaged.
Add-on List Disclosures: Under Section 463.4(b), the proposed rule would require
covered motor vehicle dealers that charge for optional add-on products and services to disclose
clearly and conspicuously in advertisements and on any website, online service, or mobile
application through which they market motor vehicles and at any dealership, an itemized Add-on
List of such products and services and their prices. This information is necessary to prevent
misrepresentations regarding add-ons and unfair charges to consumers without their awareness.
Of the 46,525 motor vehicle dealers that would be subject to this Rule, the Commission
anticipates those that charge for such add-ons and do not already maintain a list will require
approximately 14 hours to create an initial disclosure system, including the time necessary to
create and review the required Add-on List, and to design a system that provides for display of
the Add-on List on websites or other online services. In addition, the Commission anticipates
that periodic revision of these lists will be required, at an estimated 1 hour of clerical staff time
per year. Finally, for dealers with an online presence, the Commission estimates 8 additional
hours of programmer time to integrate this system across the dealership’s online and mobile
applications. Assuming all covered dealers charge for such add-ons and do not already maintain
this information for consumers yields an initial burden estimate of approximately 651,350 hours
for the industry (46,525 covered motor vehicle dealers × 14 hours). The Commission further
estimates an ongoing, annual periodic revision burden at 46,525 hours (46,525 covered motor

1

See U.S. Census Bureau, All Sectors: County Business Patterns, including ZIP Code Business Patterns, by Legal
Form of Organization and Employment Size Class for the U.S., States, and Selected Geographies: 2019, available at
https://data.census.gov/cedsci/table?q=CBP2019.CB1900CBP&n=44111%3A44112&tid=CBP2019.CB1900CBP&
hidePreview=true&nkd=EMPSZES~001,LFO~001 (listing 21,427 establishments for “new car dealers,” NAICS
code 44111, and 25,098 establishments for “used car dealers,” NAICS code 44112). The discussion in this section
of the NPRM concerns facts and statistics for automobiles; we invite submissions of comparable information for
other types of motor vehicles.

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vehicle dealers × 1 hour). Combined, this yields an overall estimated annual burden of 697,875
hours for the initial design and periodic revision of Add-on Lists.
The Commission estimates the associated labor costs for these disclosures by applying
appropriate hourly labor cost-rates to the hours calculated above.2 The Commission anticipates
that managerial, administrative, and programming staff are likely to perform the tasks associated
with preparation of Add-on Lists, including entering data, posting the Add-on Lists in
dealerships or submitting them for inclusion on a dealer’s website or mobile application, and
revising them as needed. In particular, the Commission estimates as follows: 5 hours of time for
a finance manager to compile and review a master Add-on List, at a cost-rate of $65.54 per hour;
1 hour of review by a compliance officer, at a cost-rate of $26.83 per hour; 8 hours of time for an
programmer to design a system for posting prices on location, at a cost-rate of $28.90 per hour;
and 1 hour of time for administrative support staff to make periodic revisions, at a cost-rate of
$18.37 per hour. This yields an associated annual labor cost burden of $28,105,752 for the
industry.
The Commission also anticipates that the estimated 81% of dealers with an online
presence will require 8 hours of programmer work for integration work across online and mobile
applications. This yields an estimated annual hours burden of 301,480 hours (46,525 motor
vehicle dealers × 81% × 8 hours). Applying associated costs to this estimate yields an annual
labor cost burden of $8,712,722 ($28.90 per hour × 81% × 8 hours).
Disclosures relating to Cash Price without Optional Add-ons: Under Section 463.5(b),
the proposed rule would require covered motor vehicle dealers that charge consumers for
optional add-on products or services to disclose pricing and cost information without such addons. First, before discussing any aspect of financing for a specific vehicle, aside from its
Offering Price, the dealer must provide the consumer with an itemized disclosure of the vehicle’s
Cash Price without Optional Add-ons, along with the option to purchase or finance the vehicle
for this price, which excludes optional add-on products or services. Second, before charging a
consumer for an add-on product or service in a financed transaction, the dealer must provide the
consumer with an itemized disclosure of the vehicle’s Cash Price without Optional Add-ons, the
finance charge, and any consumer-provided consideration. These disclosures must be dated and
signed by the consumer and a manager for the dealer prior to consummation of the transaction.
As with the proposed Add-on List provision, this information is necessary to prevent
misrepresentations regarding the costs of add-ons and to make clear that these products and
services are optional to the consumer. This requirement is also intended to prevent unfair
practices where dealers include add-ons in contracts without consumer awareness.
The Commission anticipates that dealers that charge for optional add-ons will incur
certain initial and ongoing costs to provide the disclosures relating to Cash Price without
Optional Add-ons. Dealers likely will incur some costs to create and implement templates for
these disclosures, either in paper or electronic form. The Commission estimates that these tasks
will require approximately 8 hours of work by a compliance officer, at a cost-rate of $26.83 per
2

Applicable wage rates are based on data from the Bureau of Labor Statistics’ May 2020 National Industry-Specific
Occupational Employment and Wage Estimates for NAICS industry category 441100—Automobile Dealers, at
https://www.bls.gov/oes/current/naics4_441100.htm.

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hour; 4 hours by a sales manager, at a cost-rate of $63.93 per hour; and 8 hours of programmer
time, at a cost-rate of $28.90 per hour, for a total of $701.56 and 20 hours per average dealer
(($26.83 per hour × 8 hours) + ($63.93 per hour × 4 hours) + ($28.90 per hour × 8 hours)). This
yields an estimated hours burden for all dealers, in the first year, of 930,500 hours and an
associated labor cost burden of $32,640,079.
Dealers are also likely to incur some annual labor costs to populate data into these
disclosures. The Commission anticipates that the added time to input this data for the disclosures
relating to Cash Price without Optional Add-ons will be minimal, as they consist of information
that dealers already obtain from the consumer in the ordinary course of business in order to
complete these vehicle sales transactions. The Commission estimates that inputting the data
needed for the disclosures in Section 463.5(b)(1), (b)(2), and (b)(3) will take two minutes for a
salesperson to complete at a rate of $21.84 per hour. This yields an average cost per disclosure
of $0.73 (rounded to the nearest cent) for completing the required disclosures. Dealers would
need to provide the Section 463.5(b)(1) disclosure for every vehicle they offer for sale with any
optional add-on products or services; the 463.5(b)(2) disclosure for every vehicle sale that is
financed and includes an optional add-on; and the 463.5(b)(3) disclosure for every vehicle sale
that includes an optional add-on.
The Commission estimates that approximately 57,866,000 vehicles are sold annually,
including an estimated 17,059,000 new vehicles and 40,807,000 used vehicles.3 The
Commission assumes that each vehicle sale involves an offer of optional add-ons, and further
estimates that approximately 81% of new vehicle sales and 35% of used vehicle sales are
financed,4 and that approximately 94% of new vehicle sales and 86% of used vehicle sales
includes an optional add-on.5
Given these estimates and assumptions, the Commission anticipates that dealers will be
required to provide the disclosures in Section 463.5(b)(1) in an average of 1,244 transactions per
dealer (57,866,000 transactions ÷ 46,525 motor vehicle dealers).6 This yields an annual hours
burden of 1,929,237 hours or approximately 41 hours per average dealer (1,244 × 2/60 hours).
The associated annual estimated labor cost is $42,250,283 for all dealers (1,244 transactions ×
46,525 dealers × $0.73 per transaction) or approximately $908.12 per average auto dealer.
The Commission anticipates that the average dealer will be required to provide the
disclosures in Section 463.5(b)(2) in an average of 543 transactions per year. This results in an
estimated annual burden of 842,103 hours across the industry or an average of approximately 18
3

U.S. Dept. of Trans., Bureau of Trans. Stat., New and Used Passenger Car and Light Truck Sales and Leases,
https://www.bts.gov/content/new-and-used-passenger-car-sales-and-leases-thousands-vehicles (last visited Apr. 25,
2022) (listing 17,059,000 new vehicle sales and 40,807,000 used vehicle sales in 2019).
4
Melinda Zabritski, Experian Info. Sol’s Inc., State of the Automotive Finance Market Q4 2020 at 5,
https://www.experian.com/content/dam/marketing/na/automotive/quarterly-webinars/credit-trends/2020-quarterlytrends/v2-2020-q4-state-automotive-market.pdf (listing 81.12% of new vehicles and 34.59% of used vehicles with
financing in 2020).
5
Nat’l Auto. Dealers Ass’n, Average Dealership Profile at 1 (Aug. 2021),
https://www.nada.org/media/4129/download?inline (reporting “F&I penetration” figures of approximately 93.6% for
new vehicles and 86.2% for used vehicles).
6
The Commission calculates the estimated number of covered transactions as follows: 57,866,000 total vehicle
sales ÷ 46,525 dealers.

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hours per average auto dealer (543 × 2/60 hours).7 The associated annual labor cost is estimated
at approximately $18,442,045 for the entire industry or approximately $396 per average auto
dealer (543 transactions × $0.73 per transaction).
The Commission estimates that the average dealer will be required to provide the
disclosures in Section 463.5(b)(3) in an estimated 1,099 transactions.8 This yields an annual
hours burden for providing required itemizations of optional add-ons that are estimated at
1,704,366 across the industry or approximately 37 hours per average auto dealer (46,525 auto
dealers × 1,099 × 2/60 hours). The associated labor cost is an estimated $37,325,612 for the
industry or approximately $802 per average auto dealer (46,525 motor vehicle dealers ×1,099
transactions × $0.73).
Other Required Disclosures. The proposed rule would prohibit dealers from making
certain misrepresentations in the course of selling, leasing, or arranging financing for motor
vehicles. The proposed prohibitions are consistent with the existing prohibition on
misrepresentations under Section 5 of the FTC Act, and do not themselves require additional
information collection or disclosures. Thus, while dealers may elect to undertake monitoring or
review to ensure compliance, the Commission estimates for present purposes that any additional
costs associated with the proposed misrepresentation prohibitions to be de minimis.
The proposed rule also would require covered motor vehicle dealers to clearly disclose
the Offering Price of a motor vehicle in advertisements and in response to consumer inquiries.
This requirement is necessary to address deceptive and unfair practices with respect to vehicle
pricing representations, whether add-on products and services are optional and their costs, and
consumer consent to purchase such optional products and services. Vehicle pricing activities are
usually and customarily performed by dealers in the course of their regular business activities.
While the proposed provision may increase the importance of these activities, or alter when in
the course of business they are undertaken, the Commission estimates, for present purposes, that
any additional costs associated with the proposed offering price requirement to be de minimis.
In addition, the proposed rule would require dealers, when making any representation
about the monthly payment for a vehicle, to disclose the total amount the consumer will pay to
purchase the vehicle at that monthly payment after making all payments as scheduled, as well as
the amount of consideration to be provided by the consumer if the total amount disclosed
assumes the consumer will provide consideration. The Commission anticipates that such
disclosures would contain information already produced in the ordinary course of business and
known to dealership staff at the time such disclosures would be required. As such, the
Commission anticipates that this proposed provision would merely require a covered motor
vehicle dealer to provide readily available information, and that the disclosure burdens
associated with these requirements is likely de minimis. Finally, the proposed rule would require
covered dealers that sell optional add-on products and services to disclose to consumers that
7
The Commission estimates the estimated number of covered transactions as follows: ((17,059,000 new vehicle
sales × 81% financed × 94% with optional add-ons (i.e., 12,988,722)) + (40,807,000 used vehicle sales × 35%
financed × 86% with optional add-ons (i.e., 12,282,907)) ÷ 46,525 dealers).
8
The Commission calculates the estimated number of covered transactions as follows: ((17,059,000 new vehicle
sales × 94% with optional add-ons) + (40,807,000 used vehicle sales × 86% with optional add-ons)) ÷ 46,525
dealers.

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these products are not required. This requirement is necessary to address deceptive and unfair
practices regarding these products and services, including misrepresentations that these products
are required when they are not, and charging consumers for such products without the
consumers’ Express, Informed Consent. The proposed rule would also require covered dealers
to disclose the total cost of a vehicle when making representations about the monthly payment
for the vehicle, as well as that a lower monthly payment will increase the total cost where
applicable. These requirements are necessary to address deceptive practices with respect to
vehicle pricing representations, including the use of monthly payment amounts to incorrectly
imply savings or parity between offers.
The Commission anticipates that the disclosure burdens associated with these
requirements is likely de minimis. These proposed rule provisions would merely require a
covered motor vehicle dealer to provide readily available information to consumers in
advertisements or direct communications with customers, as applicable.
Recordkeeping
The proposed rule would require covered motor vehicle dealers to retain, for a period of
twenty-four months from the date the record is created, records sufficient to demonstrate their
compliance with the Rule and its disclosure requirements. Such records would include
advertising materials regarding the price, financing or lease of a motor vehicle; copies of Add-on
Lists offered to consumers; copies of the disclosures relating to Cash Price without Optional
Add-ons required by the Rule; copies of purchase orders and financing and lease documents
signed by the consumer; and records demonstrating compliance with the proposed rule’s
requirements for add-ons in consumer contracts.
The Commission anticipates some incremental recordkeeping burden for covered motor
vehicle dealers who would be required to retain copies of Add-on Lists, disclosures relating to
Cash Price without Optional Add-ons, and other transaction records necessary to demonstrate
compliance with the Proposed rule’s requirements.
The Commission anticipates that it will take covered motor vehicle dealers approximately
15 hours to modify their existing recordkeeping systems to retain the required records for the 24month period specified in the proposed rule. This yield a general recordkeeping burden of
697,875 hours annually (46,525 motor vehicle dealers × 15 hours per year).
The Commission anticipates that programming, administrative, compliance, and clerical
staff are likely to perform the tasks necessary to comply with these recordkeeping requirements.
In particular, the Commission estimates as follows: 8 hours of time for a programmer to design,
implement, or update systems for record storage, at a cost-rate of $28.90 per hour; 5 hours of
additional clerical staff work, at a cost-rate of $18.37 per hour; 1 hour of sales manager review,
at a cost-rate of $63.93 per hour; and 1 hour of review by a compliance officer, at a cost-rate of
$26.83 per hour. Applying these cost-rates to the estimated hours burden described above, the
total estimated initial labor cost burden is $413.81 per average dealership (($28.90 per hour × 8
hours) + ($18.37 per hour × 5 hours) + ($63.93 per hour × 1 hour) + ($26.83 per hour × 1 hour)),
totaling $19,252,510 (rounded to the nearest dollar) across the industry ($413.81 per average
dealership × 46,525 dealerships).
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Beyond those records already created and retained in the ordinary course of business,
proposed Section 463.6(a)(4) would require covered motor vehicle dealers to create and retain
calculations of loan-to-value ratios in contracts including GAP agreements. This requirement is
necessary to prevent deception and unfairness relating to the sale of GAP agreements under
circumstances in which the consumer would not benefit from such products. As described
above, the Commission estimates that covered motor vehicle dealers sell approximately
57,866,000 vehicles each year. The Commission further estimates that approximately 25.7% of
such sales include GAP agreements, for an estimated total of 14,871,562 covered vehicle sales.9
The Commission estimates that covered motor vehicle dealers will require approximately
1 hour for a sales manager to create and implement a loan-to-value calculation template, at a
cost-rate of $63.93 and 1 hour for a compliance officer to review the template, at a cost-rate of
$26.83. This yields an estimated initial hours burden for the creation of loan-to-value calculation
templates for all dealers of 93,050 hours (46,525 covered motor vehicle dealers × 2 hours).
Applying the above-described cost-rates, the associated labor cost burden is estimated at
$4,222,609 for all dealers (($63.93 per hour × 1 hour × 46,525 dealerships) + ($26.83 per hour ×
1 hour × 46,525 dealerships)).
The Commission also anticipates that, with the template in place, covered motor vehicle
dealers will expend one minute per sales transaction for a salesperson to perform the calculation
contemplated by this requirement, at a cost rate of $21.84 per hour. As described previously, the
Commission estimates that covered motor vehicle dealers sell approximately 57,866,000 vehicles
each year and approximately 25.7% of such sales include GAP agreements, for an estimated total
of 14,871,562 covered vehicle sales. While the number of motor vehicles sold will vary by
dealership, this yields an average sales volume of 320 sales transactions per average dealership
per year that include a GAP agreement. This yields an estimated annual hours burden for all
dealers of 248,133 hours (46,525 covered dealers × 320 covered transactions × 1/60 hours).
Applying the associated labor rates yields an estimated annual labor cost for all dealers of
$5,419,232 (248,133 hours × $21.84 per hour).
13. Estimated nonrecurring costs.
Capital and Other Non-Labor Costs: $14,769,361.
The Commission anticipates that the proposed rule would impose limited capital and nonlabor costs. Covered motor vehicle dealers already have in place existing systems for providing
sales and contract-related disclosures to motor vehicle buyers and lessees as well as persons
seeking information during the vehicle-shopping process. While the proposed rule’s disclosure
requirements might make limited additions to the types of forms and disclosures that must be
provided during the process of selling or leasing a motor vehicle, the Commission anticipates
that these changes will not require substantial investments in new systems. Moreover, many
dealers may elect to furnish some disclosures electronically, further reducing total costs.
9

See Nat’l Consumer Law Ctr., Auto Add-ons Add Up: How Dealer Discretion Drives Excessive, Inconsistent, and
Discriminatory Pricing 9 (Oct. 11, 2017), available at https://www.nclc.org/images/pdf/car_sales/report-auto-addon.pdf (nationwide dataset of 1.8 million car sale transactions, of which 462,170 included GAP agreements).

9

Section 463.4(b) would require dealers who engage in advertising and who also charge
for optional add-ons to have a website, online service, or other mobile application by which to
disclose an Add-on List. In the Commission’s estimation, dealers who engage in covered
advertising generally already operate a website or other application by which they could make
such disclosures. As such, the Commission estimates that the capital costs associated with such
additional disclosures are likely de minimis.
Covered motor vehicle dealers already have in place existing recordkeeping systems for
the storage of documentation they would retain in the ordinary course of business irrespective of
the Rule’s requirements, including records associating vehicle financing and customer contracts
and leases. The Commission anticipates that the proposed rule’s additional recordkeeping
requirements may result in incremental non-labor costs to add capacity to these systems in order
to store the records. The proposed rule provides that covered motor vehicle dealers may keep the
required records in any legible form, and in the same manner, format, or place as they may
already keep such records in the ordinary course of business. Accordingly, the proposed rule
would not require covered persons to invest in new recordkeeping systems and may retain
records in whatever form they prefer, whether hard copy or electronic.
The Commission estimates that the non-labor costs incurred by dealers for providing
disclosures in written or electronic form will differ based on the method of disclosure employed
by the dealer. As explained in detail in the Preliminary Regulatory Analysis,10 the Commission
estimates an average physical cost of disclosure of $0.11 across paper and electronic disclosure
methods—a figure which includes (1) an estimated cost of $0.15 per printed disclosure at one
single-sided page per disclosure, which is based on industry input regarding the printing costs
associated with the FTC’s Used Car Rule Buyers Guides;11 and (2) a cost of $0.02 per disclosure
made electronically.12 As noted above, dealers would need to provide the Section 463.5(b)(1)
disclosure for every vehicle they offer with any optional add-on products or services; the
463.5(b)(2) disclosure for every vehicle sale that is financed and includes an optional add-on;
and the 463.5(b)(3) disclosure for every vehicle sale that includes an optional add-on. The
estimated cost of providing these three disclosures annually is approximately $317.45 per
average covered dealer,13 totaling approximately $14,769,361.

10

Id.
Fed. Trade Comm’n, Agency Information Collection Activities; Proposed Collection; Comment Request;
Extension, 84 Fed. Reg. 38979, 38981 (Aug. 8, 2019) (estimating that average printing cost for the one-page,
double-sided Buyers Guide is thirty cents). In making this estimate for printed disclosures, the Commission assumes
that all dealers will purchase pre-printed template forms instead of producing them internally, although dealers may
produce them at lower expense using their own office automation technology.
12
The Commission arrived at this figure based on the approximate estimated cost differential between hard copy and
electronic disclosures under the Commission’s Franchise Rule. Fed. Trade Comm’n, Agency Information
Collection Activities; Proposed Collection; Comment Request, 85 Fed. Reg. 19479, 19480 (estimating $35 for paper
disclosures and $5 for comparative electronic disclosures).
13
The Commission obtains this cost estimate as follows: (a) (($0.11 × 57,866,000 total vehicle sales) ÷ 46,525
dealers) + (b) (($0.11 × (17,059,000 new vehicle sales × 81% financed × 94% with optional add-ons) + (40,807,000
used vehicle sales × 35% financed × 86% with optional add-ons) ÷ 46,525 dealers)) + (c) (($0.11 × (17,059,000 new
vehicle sales × 94% with optional add-ons) + (40,807,000 used vehicle sales × 86% with optional add-ons) ÷ 46,525
dealers)).
11

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The Commission further estimates that covered motor vehicle dealers that store records in
hard copy are unlikely to require extensive additional storage for physical document retention.
Further, due to the low cost of electronic storage, the Commission anticipates that motor vehicle
dealers who store their records electronically would incur minimal incremental cost to expand
their storage capacity in order to comply with the proposed rule’s recordkeeping requirements
due to the low cost of cloud and other electronic storage options. Any other capital costs
associated with the proposed rule are likely to be minimal.
14. Estimated cost to the Government.
FTC staff estimates that the cost to the Federal Government of implementing the
proposed rule will total approximately $304,568. This estimate is based on the assumption that
one attorney work year ($186,342) and one investigator work year ($118,166) will be expended
to enforce the proposed rule. These estimates include employee benefits.
15. Reasons for Changes.
The proposed rule will result in an estimated 7,816,819 burden hours annualized,
$221,870,782 in labor costs, and $14,769,361 in capital/non-labor costs.
16. Publicizing Results.
Not applicable. There are no plans to publish any information for statistical use.
17. Failure to Display OMB Expiration Date.
Not applicable. The Commission will display the control number assigned by OMB to
any information collection requirements proposed herein and adopted in any final rule.
18. Exceptions to “Certification for Paperwork Reduction Act Submissions.”
The FTC certifies that this collection of information is consistent with the requirements
of 5 C.F.R. 1320.9, and the related provisions of 5 C.F.R. 1320.8(b)(3), and is not seeking an
exception to these certification requirements.

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