The Federal Trade Commission is targeting car dealerships for advertising vehicles that aren't actually available for sale. It's classic bait-and-switch adapted for the digital age, and regulators are finally catching up.
Dealerships post cars online they don't have to game search rankings and foot traffic. You see the perfect car at the perfect price on their website. You drive to the dealership. And surprise, that car was "just sold" but they have something else you might like, usually at a higher price.
It's one of the oldest tricks in the book. What's new is the scale.
In the analog era, bait-and-switch required printing fake ads in newspapers. There was friction. There was cost. There was evidence. In the digital era, dealerships can list phantom inventory across dozens of platforms instantly and update it just as quickly when someone complains.
The FTC has had enough. They're going after dealerships for advertising unavailable vehicles as an unfair and deceptive trade practice. The enforcement action targets both the false advertising and the underlying bait-and-switch business model.
But here's the question: can enforcement keep pace with how fast these tactics evolve?
Dealerships have become sophisticated about this. They'll list cars that technically exist in their inventory management system but are already sold, awaiting delivery, in service, or otherwise unavailable. When challenged, they can claim it was a "technical error" or "inventory lag." Hard to prove intent.
Some dealerships list cars from other dealers in their network to inflate their apparent inventory, with footnotes buried in fine print explaining the vehicle "may not be physically at this location." Technically accurate. Functionally deceptive.
Others use aggressive time limitations: "this price good only if purchased today." The car exists, the price exists, but only for a window so narrow it's effectively bait. When you come in tomorrow, the price has "expired."
The FTC enforcement action is a good start. But it's treating a symptom, not the disease. The disease is that dealership business models are built around information asymmetry. They make money when customers don't know what inventory exists, what prices are fair, or what financing costs should be.
