How Dealers Can Prepare for Increased FTC Scrutiny

Aaron Baldwin, CEO of automotiveMastermind, joins Inside Automotive to discuss how tightening Federal Trade Commission (FTC) regulations are reshaping automotive advertising, pricing transparency, and dealer compliance strategies.

As regulators place greater scrutiny on vehicle pricing and advertising practices, dealers, OEMs, and technology providers are being forced to adapt. Baldwin explains how automotiveMastermind is responding by moving toward in-stock inventory pricing, improving out-the-door price accuracy, and launching FeeSync, a new tool designed to centralize dealer fee management and support compliance efforts. He also shares insights into the growing demand for standardized data systems as the industry prepares for continued regulatory oversight.

Key discussion points:

• How FTC regulations are changing automotive advertising and pricing practices
• Why in-stock inventory data is becoming critical for pricing accuracy
• The challenges of calculating compliant out-the-door vehicle pricing
• How FeeSync helps dealers manage and distribute fee data across vendors and platforms
• Why dealer concerns about audits and compliance are driving adoption of new tools
• The role of OEMs, vendors, and standardized data infrastructure in long-term compliance

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Transcript

Welcome And Why Compliance Matters

Jim Fitzpatrick 0:07

Welcome to Inside Automotive with Jim Fitzpatrick. The CBT News Auto Leadership Summit is just weeks away, and one of the conversations at the event will center around advertising compliance and pricing transparency in today's retail environment. Joining us now is one of the panelists, Mr. Aaron Baldwin. You've seen him here before on CBT News. Probably seen him anywhere, everywhere in retail automotive. He's got an incredible career. So he's the CEO of Automotive Mastermind. Thanks so much, Aaron, for joining us once again on the show. Sure. So with uh you know, this FTC situation is a real deal. A lot of dealers are upset. That was the impetus behind us putting this thing together, and thank you for attending it and sponsoring it.

How Mastermind Shifts To In-Stock Ads

Jim Fitzpatrick 0:50

Uh so uh we're very excited about it. But with the FTC regulations and and limitations uh uh dealerships and brands face now, how is Automotive Mastermind helping dealers to adapt to all of this?

Aaron Baldwin 1:02

Yeah, absolutely, Jim. And first off, uh thank you to you and the CBT team for putting on this conference. I think this is very good timing to get this out there and really address this subject and help educate dealers as this um continually evolving climate is changing around um how they should be pricing their vehicles and how they should be advertising. But specifically within automotive mastermind, we've done a number of things to help out our dealers. Um is very important to note in this is historically we have uh always focused our advertising in what we uh would call you know generic vehicles, vehicles that could be ordered or something along those lines, you know, average MSRP for a year, make model trim. Um, and we're adjusting that to be actual in-stock inventory. Um and that is no short feat for a software, a data system like Automotive Mastermind to make that change. And I couldn't be more proud of the team at Automotive Mastermind for doing that in just a month's time. So uh in our June marketing run, everything will be running off of Venn specific, fully FTC compliant uh FTC compliant based on the regulations and guidelines, uh, outreach uh from our creative perspective. So really thrilled at the job that our team has put in to do that, and hopefully the dealers who are partnered with Automotive Mastermind will uh will appreciate it as

OEM Support And Network-Wide Change

Jim Fitzpatrick 2:24

well. Sure. Let's talk about uh let's talk about your OEM partners. How are your OEM partners reacting to these new advertising regulations and are they shifting uh how how they support their franchise uh dealers?

Aaron Baldwin 2:37

They are. I mean, they are really thinking about how are they going to support this overall across their dealer networks and this this type of you know change in the environment, which as you know, and many of the dealers out there listening would know, this uh to make this shift, especially on the pricing side systemically across the industry, is a very big change. It is a very big change for listing sites, for agencies uh across the board on um how they're actually calculating final prices and payments and how they're displaying that to consumers. So the OEMs are absolutely paying attention to this and trying to see how they can be involved in order to support their dealer networks. Um, and so we've had a number of conversations with various OEMs about this very specific subject.

The Real Complexity Of Out-The-Door Price

Jim Fitzpatrick 3:20

Sure. Consumers today just want total transparency, as we know. But behind the scenes, just how complicated is it to actually calculate and syndicate the real out-the-door price in the marketing that you do for you for your dealer clients? It's gotta be it's pretty it's pretty complicated. Yeah.

Aaron Baldwin 3:38

Um, you know, as we've spoken about in the past, we brought together Mastermind and Market Scan and uh and Polk to bring together all of those different data capabilities uh under the sales solutions. Yeah, you've got those brands. Yeah. Yeah. And so with Market Scan kind of being in that core nucleus that's that's sitting there in the payment side, we are very confident in what we do. Um, and also any of the partners that are partnered with Market Scan across the board, but calculating a payment at that level or a price at that level is very complicated, especially when you move into states that have um you know more intense tax uh tax uh equations. Um, you know, some are based on gross vehicle weights, some are on political lines as opposed to actual zip code boundary lines, and understanding all of that nuance to be able to get there is really important. But that even goes a little bit further. And really, what I've seen from what the FTC has put out there as far as their guidelines, uh, understanding exactly what the dealer fees are, right? What are the individual dealer fees that these dealers are wanting or have inside of their deals? Those are the ones that they're specifically focused on, but then they're also focused on those conditional incentives. And some of these incentives, uh, you know, you think about a loyalty incentive. Is it the right kind of loyalty? Is that loyalty based on whether the person has the brand in the garage, or do they currently have uh an open lien with the captive, right? And those rules vary from OEM to OEM to OEM. And so as we run and we calculate these prices and these payments and understand where these incentives actually fall, we have to get to that grain level detail of the historical customer to make sure that we are right so that we're not presenting something that wouldn't be available to that consumer.

FeeSync Explained And Why It’s Free

Jim Fitzpatrick 5:24

Right, right. To address this exact issue, SP uh global mobility, soon to be mobility global, and automotive mastermind recently announced the rollout of FeeSync. Can you walk us through what this tool does to help dealers present the correct price and why you decided to make it available to the broader industry at no cost?

Aaron Baldwin 5:44

Yeah, absolutely, Jim. Um this has been an absolute passion project for me personally and for a lot of folks internally. Um in these types of environments where we have this much change that is affecting the industry systemically, somebody needs to step up and actually present a solution and a platform to help dealers navigate through it. And historically, dealers have not had a central place to manage their fee structures. If I remember back to my days at Asbury Automotive Group, and I'm not gonna date myself and say how long ago that was, but if we had uh if we had one of our platforms or states change dealer fees, we had an entire project management team that would go in, audit every single agency, every single software provider, listing site, website to make sure that we cascaded that through the disclaimers. Um but we had a whole team in order to do that. And that type of infrastructure is not available for every single dealer out there, especially you know, the single points or you know, two, three-store groups uh that are out there. So for us to have the capability already in the market scan platform and be able to expose that and be able to support it and to give it away for free is something that uh you know I kind of felt personally and and I think we feel as a business obligated to deliver to the industry so that we can help solve these types of problems and give dealers tooling that they can rely on for a long time. And that uh, you know, all of the vendor partners and technology partners, agencies, OEMs even, can code into it and know that they're accessing a secure, clean environment that has accurate fees represented inside of it.

Open Integrations So Dealers Avoid Extra Work

Jim Fitzpatrick 7:26

Yeah, that's pretty cool because you know the automotive ecosystem relies on a lot of different types of vendors. Some are drafting their own programs uh to present to fee data. Um how does how does fee sync fit into this landscape and how will you work with other vendors to ensure dealers aren't forced to manage uh multiple fee systems?

Aaron Baldwin 7:48

Yeah, that's a great question. And we're working through a lot of the details on that right now with some of the other you know major industry players that are out there who are interested in in being part of this ecosystem. You know, the last thing we want to do is to put more work on a dealer, right? That's the last thing that we want to do. So we're actively looking at what should be considered a source, uh a data source, like a root data source. So think DMS. If I'm updating my fees and my DMS, can we extract that and have that uh seed the system so that uh the dealer can see it and then they can authorize any other partners that they work with to be able to access it from there? Um we will syndicate these uh fees to any uh provider who is authorized by the dealer, and that's the important caveat here. The dealer has their own screen where they can manage which partners actually receive this information. Um, so as long as a technology partner, be it a website, CRM, uh, inventory syndication provider, as long as they are authorized in the system and the dealer has given them the thumbs up that it can go, we will send that out wherever it needs to go. Um, I know there's a number of companies you know looking at you know handling this at the VIN level or something along those lines, but fees aren't necessarily at the VIN level. Uh dealer fees are at you know, uh deal type and you know, sometimes very uh variable by franchise, yeah. Um, but they're not necessarily tied directly to the VIN. So we're hoping that this system here, by having an open integration uh to it, uh it allows every single vendor in the ecosystem to participate and to know exactly what the fees

Dealer Anxiety And The Rush To Onboard

Jim Fitzpatrick 9:31

are. Have you been hearing a lot from your dealer partners on this? Have they been kind of freaking out a little bit and calling you and going, you know, Aaron, you got to come up with something, you gotta help us here. What's the deal? Which way is up on this? Because so many dealers that I speak with are just, you know, they're extremely nervous about when they get that knock on the door, you know, from the FTC to say, hey, we're here to do an audit, or we already did the audit and you didn't bode that well on it. You know, I mean, that there's a lot of very big uh dealers out there very concerned.

Aaron Baldwin 10:02

Yeah. Um, you know, interestingly enough, uh in the early days it was very specific about well, what is automotive mastermind doing and how are you going to make sure that I'm clean there? And as we looked at that problem and as we were hearing this feedback, and uh as we were discussing with the team at Market Scan, we figured out that we had um this potential within the platform already. And so um I did talk to a number of really good advisors uh across uh some of the larger dealer groups and a lot of the, you know, uh a lot of dealer groups across the country, and uh they were very receptive to this. And since the announcement, we've had just an influx of interest uh in making sure that we are prioritizing onboarding um, you know, dealer groups who want to participate in this, vendors who want to participate in this. Uh the reception on it has been absolutely amazing. Um we're we're thrilled to be able to provide this type of uh this type of solution to the industry. Yeah, that's that's really fantastic.

Summit Invite And Practical Next Steps

Jim Fitzpatrick 10:59

Um for those that are listening to us have this conversation today, um please uh check your calendars. Uh it's for June 16th. We'd love to have you out there. It's a very important conference. It's the CBT News Auto Leadership uh Summit, which is on fair pricing and compliance. It's going to be conversations like this that we'll be having more of. And uh you'll be able to learn also from Aaron and his team uh about these programs that they're rolling out for dealers. Um right now, dealers, as you know, Aaron, need everything that they can get on this particular topic. They need but first and foremost, they need clarity and a way forward. Um once they get that, they can get with these different programs that you're offering and say, okay, let's let's kick this into high gear, right? And be protected.

Aaron Baldwin 11:43

That's exactly right. And we're hoping that we are a part of that solution and help them, uh help those dealers be able to manage the future on how any type of regulatory environment changes and affects them, um, that they can look at us as being that trusted source and that independent arbiter to be able to support them. Sure, sure.

Final Takeaways And Goodbye

Jim Fitzpatrick 12:03

Aaron Baldwin, CEO of Automotive Mastermind. Thank you so much for joining us on the show. Very much appreciate it. Look forward to seeing you out there in DC. And I think it's going to be a great event. We're already getting a tremendous amount of response from dealers and vendors that uh have got a stake in this, such as uh Mastermind. So thanks so much. Really, really appreciate it and uh appreciate your support of the event as well.

Aaron Baldwin 12:24

Yeah, absolutely. Thank you so much, Jim, and uh thank you so much for having me. And again, thank you so much for putting on this conference. I think it is absolutely necessary to just try to get as much education out there uh into the industry as possible right now. Yeah, we agree, we agree. Thanks, man. Take care. Thank you.

Jim Fitzpatrick 12:41

Thanks for watching Inside Automotive with Jim Fitzpatrick.