On the Dash:
- Advertised vehicle prices must reflect all mandatory fees, excluding government charges.
- Dealers should proactively review ads, policies, and employee practices to ensure compliance.
- FTC monitoring continues; potential violations may result in enforcement actions.
The Federal Trade Commission (FTC) has sent letters to 97 auto dealership groups nationwide, warning that vehicle prices advertised to consumers must include all mandatory fees, the agency announced March 13.
The letters stress that advertised prices must match the total amount buyers will be required to pay, excluding only government charges such as taxes. Dealerships are encouraged to review pricing and advertising practices to ensure compliance with the FTC Act, which prohibits misleading or deceptive conduct. The agency also said it will continue monitoring the market and may take additional action if violations occur.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the commission is focused on preventing dealers from advertising low prices and then adding mandatory fees during the purchase process.
The letters describe six examples of potentially illegal pricing behavior:
- advertising prices that omit required fees
- reflecting rebates or discounts not available to all buyers
- ignoring additional required down payments
- conditioning prices on dealer financing
- requiring purchases of additional items not included in the ad
- promoting unavailable or nonexistent vehicles
The letters note that while the FTC is concerned these behaviors may be occurring, they do not constitute formal findings or conclusions against the dealerships. Agency spokespersons said the 97 groups were selected based on nonpublic criteria and did not provide the names or locations of the businesses.
The National Automobile Dealers Association (NADA) said it will work with the FTC on compliance concerns, emphasizing that the majority of the nation’s 17,000-plus dealers follow consumer-friendly and lawful advertising practices but that any potential violations are taken seriously.
The letters follow other FTC enforcement actions targeting deceptive pricing across multiple industries, including auto sales, rental housing, and ticketing, reflecting the agency’s ongoing effort to ensure transparency in consumer pricing.
* Editor’s Note: NADA and the FTC are encouraging dealers to register for this webinar to learn more about the warning letters and the agency’s perspective on dealer advertising.
