"We don't negotiate much at all as Americans, so suddenly we find ourselves negotiating for not only a very expensive product, but a very complicated product," says Jack Gillis, author of "The Car Book." "We are matching wits with a seasoned professional who negotiates all the time and has actually been trained in negotiating. Right off the bat, you go into a showroom, and you are like a lamb being led to slaughter."
The agency received enhanced powers under the last year's Wall Street reform law to regulate auto dealers. The FTC says it is gathering information on whether more regulation, enforcement and consumer education are needed, or if current protections are sufficient.
So far, the FTC has looked into auto financing and how dealers treat the military, whose young members often are financially inexperienced and targeted by unscrupulous dealers. Next month, the FTC explores leasing.
The agency has heard a range of concerns about the car-buying experience. Some consumer advocates have told the FTC that there is a lack of transparency in financing arranged through dealers.
Others complained of so-called yo-yo financing, in which consumers leave the lot with a car only to be called back days or weeks later and told that their financing has fallen through. They then are given a new loan with more expensive terms or forced to give up the car. (Maryland regulators say state rules should prevent yo-yo financing, but cases still occur here.)
But Holly Petraeus, the service members' advocate at the new Consumer Financial Protection Bureau and the wife of the former U.S. commander in Afghanistan, recounted perhaps the most egregious sales tactic.
Petraeus says a dealership offered a young soldier from Fort Bragg in North Carolina a ride to the showroom so he could buy a car. It was only after he was on the road a while that the private discovered that the dealership was four hours away in Virginia. And once he arrived there, his ride disappeared, and the soldier had to buy a car to get back to base.
"I certainly won't say it's a general practice," Petraeus told the FTC recently. "But it still does exist out there, some really egregious examples of pretty much hijacking the customer and not letting them go until they've bought something from you to drive away in."
The National Automobile Dealers Association said in a statement earlier this year that the concerns raised by consumer advocates are not representative of the industry, so new FTC rules aren't necessary. Any problems can be addressed under current federal or state laws, it said.
Meanwhile, the association and other industry groups have formed a group called AWARE, which provides an online financing calculator and other information about buying a car. The group, for example, advises buyers to be aware of existing FTC regulations, including those governing used- car sales.
The FTC isn't tipping its hand on whether new regulations are needed. Although surely, if kidnapping consumers isn't against the law, it should be.
But what's clear from the FTC meetings is that consumers' experiences can differ widely. Those who have good credit and do their homework in advance are most likely to get a fair deal.
"For a dealer, the best customer in the world is someone who has to buy today and has done no work ahead of time," says Chris Kukla, a senior counsel with the Center for Responsible Lending. "You have just given up every negotiating leverage you had."
Consumers, though, aren't at a total disadvantage — thanks to the lackluster economy.
"The good news in this particular market: Car dealers need you more than you need them," Gillis says.
Here are some experts' tips for consumers before buying a car:
Fall in love later Too often, consumers have their heart set on a car before they've done any homework, says Jeremy Anwyl, chief executive of Edmunds.com, an online provider of vehicle information.