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We may have mentioned the FTC’s warning letters once or 97 times.
To help dealers navigate compliance, the National Automobile Dealers Association (NADA) has released an updated (for the first time since 2017) Driven Guide, called “A Dealer Guide to Federal Advertising Requirements.”
We reviewed the 80 pages meant to give dealers "a foundational understanding of the federal laws that apply to dealer advertising," that includes 40 sections spanning everything from internet ads to fuel economy claims to dealership incentives and more.
An attorney who represents dealerships and who has reviewed the guide gave us these questions for dealers to ask themselves: "Is it accurate? Is it transparent? And can the customer actually get it?"
Using that framing, we paraphrased and summarized some entries from the guide, blending them with his insight for a general (non-exhaustive) overview.
We also talked with the NADA, which stressed the information relates to federal guidelines, and that state/local regulations differ.
‘See price, get price’ applies to every listing, not just the price tag.
Brian Bennett, NADA’s director and counsel for regulatory affairs, told us that the clearest, least debatable rules in the guide pertain to doc fees.
"Your doc fee should be included in that most prominent price,” Bennett said. “There's no debate about that."
Brian Bennett
NADA
Bennett suggested remembering it this way: See price, get price.
Whatever number a shopper sees online should be the number they can walk out with.
See corresponding good and bad ad examples from the NADA guide below.
Courtesy NADA
Courtesy NADA
Guidelines to consider:
Do cite only EPA fuel economy estimates, as advertising non-EPA mpg or driving range figures can be deceptive, since EPA is the standard consumers expect and compare against.
Do match the fuel economy figure to its driving mode. An ad citing an EPA estimate must specify whether it's city, highway, or combined mpg, so consumers don't assume a number applies to a different driving type. "Up to" mpg claims need a clear disclosure specifying which model types can achieve that number.
Do watch certified pre-owned language specifically: Recent FTC enforcement has challenged dealers who advertised CPO vehicles at a set price, then added separate, undisclosed certification or reconditioning charges.
Don't exclude mandatory fees from the most prominently displayed price, then add them at checkout, AKA "drip pricing.” It’s one of the core violations behind this year's warning letters.
Don't make an unqualified "Made in USA" claim unless final assembly, processing, and "all or virtually all" components are U.S.-sourced. The FTC has said this standard is separate from, not simply stricter than, the American Automobile Labeling Act's vehicle labeling requirements, and applies to any advertising claim that goes beyond what AALA requires.
Attorney Seth Dobbs, partner and chair for law firm Fox Rothschild’s National Automotive Practice, said to apply the same standards to advertised monthly payments.
"For the large majority of consumers who finance their vehicles, the payment may be the most important number in the advertisement,” Dobbs said.
Seth Dobbs
Fox Rothschild
If a payment is what brings a customer in, Dobbs says dealers should hold it to the same scrutiny the FTC would.
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Blaming the vendor, or a single rooftop under your brand, will not transfer liability as transparency is expected at every level.
"The FTC does not care how big your company is or how many stores you have," Dobbs said. "'My marketing vendor did that' is not a defense. 'My other rooftop handles their own ads' is not a defense."
Bennett echoed that.
"Even if the dealer principal is not hands-on, there needs to be a clear message from the dealer principal that we are going to do this,” Bennett said, referencing adherence to compliance.
More suggested guidance:
Don't assume an ad is compliant just because the payment figure or creative came from the manufacturer. Dobbs said dealers own what's represented on their own site, regardless of who built it.
Do disclose it clearly if a review is paid for or comes from an employee's family member: Bennett said this endorsement rule is newer.
Dealers using competitor brand names in search advertising (keyword bidding) should ensure that resulting ads are not misleading regarding the relationship between the dealer and competitor brand.
Don't rely on a generic "results are not typical" disclaimer to cover a review implying an experience most customers won't get.
Don't bake conditional discounts, including for military members, first responders, specific lenders, into that most prominently displayed price. Advertise them separately. "You can't include that in that most prominently advertised price," Bennett said.
In other words: Stay transparent and remember liability falls to the dealer.
An ad isn't compliant if a customer can't walk in and get what it promises.
"If you're advertising a vehicle, a payment, an APR, and there's genuinely no way for a real customer to walk in and get that exact thing, you've already lost, regardless of what your disclaimer says,” Dobbs said.
Another bad ad/good ad example from the NADA is below.
Courtesy NADA
Courtesy NADA
Additional notes:
Don't discourage a customer from purchasing an advertised vehicle once they've shown interest, as "unselling" is prohibited under FTC guidance. Separately, refusing to take an order for an advertised vehicle within a reasonable time is also prohibited.
Do know there's still a genuine gray area here: Bennett said the NADA has specifically asked the FTC for clarity on advertising in-transit vehicles, real, ordered, en route, but not yet physically on the lot.
Do make sure any required disclosure has proper proximity to the claim, is prominent, is unavoidable, and isn't something other parts of the ad might distract attention from.
The guide cites an FTC example flagging a "$0 Down" lease ad as misleading when there are undisclosed signing charges.
Keep online listings accurate in real time. Sold or no longer available vehicles should be promptly removed from your website and any third-party platforms.
Last checks: A handful of suggested advertising checklist items from the guide. (The full list runs three pages.)
Claims/Representations:
Never say you'll "pay off your trade no matter what you owe."
Disclose material vehicle history, including prior taxicab, rental, or demonstrator use.
Purchase/Lease Offers:
Identify any vehicle-specific offer by the last six digits of the VIN, and disclose an expiration date for the offer.
Confirm any manufacturer rebate discloses the conditions a consumer must meet to qualify, along with an expiration date.
Promotional Offers:
Never require a purchase to enter a sweepstakes or receive a "free" gift.
If a test drive, giveaway, coupon, or similar offer is included, disclose the important terms and conditions that apply.
Don’t forget: Deleting an ad does not erase responsibility.
"Taking down a problematic advertisement doesn't necessarily eliminate the exposure," Dobbs said. "Regulators can seek historical advertisements, vendor records, emails and other electronic records showing what consumers previously saw."
Bottom line: No FTC deadline doesn't mean there’s no urgency.
Bennett said government agencies don’t generally commit to an enforcement timeline. (Although the association is waiting on answers to FAQ from the agency sometime soon.)
Besides, Dobbs says his “accurate, transparent, available” mantra holds up no matter what new rule the FTC adds.
"Every time the FTC adds something new... it's not really a new rule," Dobbs said. "It's the same three questions applied to a new context. If dealers actually internalized the three questions, half of these updates wouldn't even be necessary."
More FTC coverage from CDG News:
