The Federal Trade Commission’s (FTC) intensifying scrutiny of automotive advertising practices is forcing dealerships across the country to rethink how they approach pricing transparency, with industry experts alluding that the stakes have never been higher.
Brian Gordon, President of the Dave Cantin Group (DCG), and Brian Baker, President of Automotive at Stream Companies, join us on the latest episode of Inside M&A to break down what the FTC’s latest enforcement push means for dealers, their marketing strategies, and ultimately, the value of their businesses.
According to Gordon, this regulatory moment is different from those that came before it. Attorneys and industry associations alike are signaling that the FTC intends to drive systemic change across the dealership landscape, not simply levy a fine or two and move on.
However, Baker reframed the issue entirely, arguing that compliance should no longer be treated as an afterthought or a legal liability to manage around. Instead, he said, dealerships should elevate it to the same level of operational importance as variable ops, fixed ops, or inventory management with defined ownership, documented workflows, and regular staff education.
Compliance as culture, not just policy
Gordon echoed that sentiment, pushing the conversation beyond process and into organizational identity. He argued that a dealership’s culture, like how it treats customers, how it advertises, and how it conducts business day to day, directly affects its market value in ways that are just as real as net profit, even if harder to quantify. From the dealer principal down, he said, transparency in advertising is not the marketing department’s responsibility alone. It belongs to everyone.
“We look at reputation in the market as a critical driver of long-term performance. It’s intangible and not always easy to quantify on a balance sheet, but it directly influences customer trust, retention, and ultimately how the business performs over time.” – Brian Gordon
The cost of non-compliance goes beyond fines
The financial implications of falling out of compliance are more far-reaching than many dealers may realize. Baker notes that fines under Section 5 of the FTC Act can reach $16,000 to $17,000 per instance, per day, per party, which is a figure that can quickly escalate to levels that threaten not just dealership profitability, but the viability of affiliated vendors and agencies as well.
Gordon added that the consequences extend directly into M&A transactions. When sophisticated buyers conduct due diligence on a dealership, revenue generated through deceptive or non-compliant advertising practices is often backed out of the valuation entirely.
A history of FTC violations, or even an active fine discovered mid-transaction, can introduce contingent liability, complicate escrow arrangements, spook buyers, and in some cases, draw manufacturer scrutiny that derails a deal altogether.
Additionally, both guests pushed back on the notion that compliance necessarily costs dealers gross profit. Baker argued that a holistic, multipoint marketing strategy built around trust and transparency, rather than price alone, can actually retain gross over time by transferring consumer confidence from the ad to the showroom experience.
“It’s time to put formal processes in place, invest in ongoing education across the organization, and actively work with your vendor partners to ensure everyone is fully aligned with how you are taking products and messaging to market.” – Brian Baker.
Meanwhile, Gordon believes that dealerships with strong community reputations and ethical business practices consistently trade at higher valuations than their peers. In the current environment, he said, doing the right thing has never been a stronger differentiator.
What dealers should do now
According to Baker, he recommends establishing a documented approval workflow for all advertising, designating a single point of accountability for compliance sign-off, implementing ongoing staff education rather than relying on quarterly briefings, and formally vetting all vendor partners to confirm they understand federal, state, and OEM requirements before any advertising goes to market.
Gordon adds that dealer principals should begin with an honest internal assessment of how their organization operates, then make compliance a clear cultural commitment communicated from the top down, and reinforced through every advisor relationship, from legal counsel to marketing partners to M&A advisors.
Nonetheless, Gordon describes the current market as hyper-local and hyper-regional, with dealer groups increasingly focused on building density and scale within specific markets rather than expanding nationally. Groups that have grown from four or five stores to ten within a defined region, he notes, often command stronger competitive positions than larger national players with only a handful of locations in the same market.
