It seems dealer advertising is not only on my mind but on the minds of both federal and state regulators. Now would be an ideal time to review your advertising practices to make sure your dealership is playing by the rules.

On the federal front, in March, the Federal Trade Commission sent 97 letters to auto groups nationwide, warning them that the prices they advertise must be the total price, including all fees. The FTC letters cited several examples of illegal pricing practices, including:

• advertising a price that does not reflect all required fees,
• advertising a price that reflects rebates or discounts not available to all consumers,
• advertising a price that fails to account for an additional required down payment,
• conditioning the advertised price on consumers using dealer financing,
• requiring consumers to buy additional items not reflected in the advertised price, and
• advertising unavailable or non-existent vehicles.

In addition to activity on the federal level, GADA is aware of and has reported on increased enforcement by the Georgia Attorney General’s Consumer Protection Division (GACPD).

The message is clear: Dealers need to review and maintain compliance with advertising rules. View Georgia’s Auto Advertising and Sales Practices Enforcement Policies.

There are two very important points to note about auto advertising. First, “advertising” means ALL forms of advertising, including, but not limited to, print, radio, television, electronic, direct mail, flyers, billboards, showroom displays, lot displays and the internet. Basically, if you wouldn’t put the advertisement in the newspaper for fear of a violation, don’t try it elsewhere. Second, regarding the GACPD’s enforcement powers: “It is not a defense… that others were, are or will be engaged in like practices.” In plain English, you will not be able to defend yourself by saying that other dealers are advertising the same way.

Although the recent FTC interpretation that all non-government fees must be included in the advertised price might have come as a surprise to some, this has been the law of the land here in Georgia for some time. Advertised prices must include all non-government fees. The only permitted exclusions are tax, tag, title and lemon law fees. Any advertisement that lists a price “plus” another amount (such as dealer or ETR fees) will be considered deceptive. This applies to online advertising, which includes dealer websites, as well as online magazines and inventory lists.

One frequent question is whether a dealer must disclose the amount of non-government fees. Although dealers are required to include all non-government fees in advertised prices, dealers are not required to state the amount of those fees. Some dealers choose to do so for transparency, using an itemized “math stack” that demonstrates each component of the total price available to any consumer. Incentives or discounts should only be included if they apply to ALL consumers. If a dealer uses this method to show how the total price is calculated, ensure that the most prominent, conspicuous and clearly labeled amount is the all-inclusive total price that is available to any consumer. An itemized “math stack” should not be confusing.

Another question that has come up relates to advertising MSRP. Historically, MSRP has not been considered an advertised price. Having said that, as GADA has previously warned, GACPD has raised concerns about advertising MSRP and then adding amounts, sometimes substantial amounts, for “market adjustment.” Dealers are cautioned that this practice may be considered deceptive.

GADA is here to help. Although we do not review specific advertisements, you can contact us with general compliance questions at legal@gada.com.