On the Dash:
- Dealer-required fees must be included in the advertised price, with only government-required charges generally excluded.
- MSRP, discounts, rebates and financing offers can appear in ads, but the price any consumer can pay must be the most prominent amount.
- Dealers remain responsible for pricing accuracy across websites, social media, print, signs, calls and third-party advertising partners.
The Federal Trade Commission (FTC) has issued new guidance on how auto dealers should present vehicle prices in advertising, and the National Automobile Dealers Association (NADA) says the FAQs clarify the agency’s expectations.
The FTC published “Automobile Industry Pricing Transparency: FAQs” on Sept. 15, addressing advertised vehicle prices, mandatory fees, discounts, online listings, third-party advertising and vehicles that are not physically on a dealer’s lot. The guidance is intended to help the industry comply with the Federal Trade Commission Act.
NADA welcomes clearer guidance
NADA said it worked with dealers and the FTC to address questions that emerged after the agency’s warning letters. In a statement dated Sept. 15, the agency said, “The FTC’s FAQs are an important step toward providing dealers with clear guidance about the agency’s advertising compliance expectations. NADA worked closely with dealers and the FTC to address questions raised following the warning letters, and we appreciate the agency’s effort to further educate the industry on this important topic.”
According to the guidance, it states that an advertised vehicle price must reflect the actual amount any consumer can pay, excluding charges the government requires the consumer to pay directly.
Mandatory fees must be included
The FTC clarified that dealer-required fees, like document fees, should be included in the advertised price. Dealers must include the full mandatory fee when it applies to all consumers. For instance, a vehicle advertised at $40,000 with an $85 document fee must be listed at $40,085.
State laws governing document fees do not change that federal requirement. Dealers can provide additional disclosures required by state law, but the actual price must remain the clearest and most prominent price in the advertisement.
Online ads face the same standard
This guidance extends to digital advertising, such as inventory-search pages and specific vehicle listings showing a price, where the actual price should be the most noticeable figure. Dealers may advertise MSRP, discounts, and rebates, but the price that consumers can pay must be the most prominent. Any conditions for discounts must also be clearly communicated. The FTC emphasized that these same principles apply across all customer touchpoints, including social media, print ads, roadside signs, phone calls, and text messages.
Dealers’ responsibility with ad partners
The FTC also addressed the responsibilities of dealers, third-party advertisers and automakers.
Anyone managing advertising must ensure the actual price is correctly displayed. Dealers engaging third-party providers should supply direct price information and take reasonable measures to guarantee it appears properly. The guidance also applies to vehicles in transit or offsite. Dealers may advertise these vehicles, but must clearly indicate that they are not physically on the lot. Additionally, the vehicle must be available for purchase and not already assigned to another customer’s paid order.
FTC says existing law remains the foundation
The FTC clarified that the FAQs do not create any new rules or binding regulations. Instead, the document presents FTC staff opinions and illustrates how current FTC Act principles apply to automotive advertising. Each advertisement will still be evaluated based on its overall “net impression” in a fact-specific review. The FTC stated that price transparency is not a new obligation and that Section 5 of the FTC Act has long addressed deceptive advertising. Dealers who mislead consumers about advertised prices could face FTC enforcement actions.
For dealers, the FAQs provide more detailed guidance for applying those requirements across websites, digital advertising and other customer touchpoints. NADA’s response indicates the association views the added clarity as useful following questions raised by the FTC’s earlier enforcement activity.
