RULES OF THE ARKANSAS MOTOR VEHICLE COMMISSION (b) Asterisks (*) may only be used to give additional information about a word or phrase. (2) In any advertisement, the motor vehicle shall be clearly identified as to year, make, model, and commonly accepted trade, brand, or style name and the advertisement must clearly define the vehicle as a new, used, demonstrator, leased, rental, factory off-lease, loaner, executive/official or factory program vehicle. (3) When advertising a new motor vehicle, the use of stock numbers will not preempt the requirements of full disclosure. (4) Advertising conditions involving a change in the monthly payments or graduated payments must be of the same size in print advertisements and given the same prominence in all other mediums and shall not be referenced by an asterisk. 3. MANUFACTURER ADVERTISING FOR NEW, USED AND/OR LEASED VEHICLES: A. Manufacturers must comply with Commission Rule 3 on Advertising. B. The suggested retail price of a new motor vehicle when advertised by a manufacturer or distributor shall include the following: (1) All charges, except destination charges, dealer service and handling fees and/or state or local sales taxes. (2) Such advertising shall state that dealer service and handling fees, and/or state or local sales taxes are excluded. C. It shall be unlawful for any manufacturer or distributor to advertise, a rebate, refund, discount or other financial incentive paid by, financed by, or contributed by the dealer selling the motor vehicle, unless such advertising discloses clearly and discernibly the following: “The dealer’s contribution may affect the final negotiated price of the motor vehicle.” 4. PROHIBITED STATEMENTS AND ADVERTISING TECHNIQUES: The following statements or advertising techniques are presumptively false and misleading, and the burden of proving otherwise shall be on the Advertiser/Licensee. A. Statements using abbreviations or shortened terms for words or initials for groups of words not commonly understood, including but not limited to “FTB,” “A/R”, “TOP,” and “POF,” must not be used. Commonly understood abbreviations, including but not limited to “2 DR,” “AM/FM,” “APR,” “WAC,” “DEMO,” and “EXEC,” may be used. B. Statements such as “write your own deal,” “name your own price,” pick your monthly payments,” “appraise your own motor vehicle,” or statements with similar meaning are obviously untrue and shall not be used. C. No statement or advertisement shall be worded to imply that because of large sales volume, a dealer is able to purchase motor vehicles for less than another dealer selling the same line-make of vehicles. D. No motor vehicle advertisement shall contain the following statements or terms “cost,” “percent or dollars over or under cost, invoice, or profit,” “profit” or “invoice” “take over payments”, “fleet pricing”, “wholesale,” “x pricing,” “employee pricing”, or terms with similar meaning. However, a dealer may utilize the phrase “employee pricing or terms with similar meaning” only when the event is a manufacturer sponsored campaign that is available to all dealers of that line-make. E. A used vehicle shall not be advertised in a manner that creates the impression it is new. Product nameplates and/or logos of any franchise line-make shall not be used in an advertisement that is a “used only” vehicle advertisement. F. The following statements or terms “sale”, “discount”, “savings”, “price cut”, “reduced”, “clearance”, “tent sale”, and other similar terms, without clearly and conspicuously disclosing that such “clearance” or other such terms are limited to certain vehicles and/or specific dates of the sale if it is a limited time offer. G. Using any advertising statements or terms such as “Closing Out Sale”, “Lost Our Lease Sale”, “Forced to Vacate Sale” or similar terms used to imply a court-ordered closure or to induce a belief that upon disposal of the stock of goods on hand, the business will cease and be discontinued at the premises where the sale is conducted, unless such is the case. H. Statements such as “sales tax paid,” or terms with similar meaning shall not be used, unless it is truly paid by the dealer and not financed or added to the price of the vehicle. I. Statements or terms inferring a vehicle has been “repossessed” from an immediate former owner. Neither shall a dealer advertise that a purchaser will be receiving benefits on an existing loan on a vehicle when no such benefit exists. J. Statements such as “big volume buying power,” “manufacturer’s outlet,” “factory authorized outlet,” “factory sale”, “factory approved”, and “factory wholesale outlet”, or terms with similar meaning shall not be used. Any term or statement that gives the consumer the impression the dealer has a special arrangement with the manufacturer or distributor as compared to similarly situated dealers, is misleading and shall not be used K. “Double Rebates,” “Triple Rebates” or any other amount of rebates that are not truly offered by the manufacturer are prohibited. L. The statement “no reasonable offer refused,” shall not be used because, what may be reasonable to the dealership may not be reasonable to the consumer. As a result, the statement is almost impossible to prove. M. Terms or phrases that may be unfamiliar to a consumer must be fully defined in the advertisement. N. Statements offering a specific trade-in allowance (i.e., $2500 minimum trade-in”), or a range of amounts for trade-ins (e.g., “up to $1,000” or “as much as $1,000”) including, without limitation, that the trade-in will be valued at a specific amount or guaranteed minimum amount. 5. REQUIRED DISCLOSURES FOR CREDIT TERM AND LEASE ADVERTISEMENTS: A. Closed ended credit term advertising. (1) The Federal Reserve System and the Federal Trade Commission are two agencies involved with the enforcement of Federal Regulation Z. If an advertisement, promoting closed-end credit sale on a motor vehicle purchase contains any of the following terms: (a) The amount of the down payment expressed either as a percentage or dollar amount; (b) The amount of any payment expressed as a percentage or dollar amount; (c) The number of payments; (d) The period of repayment; or (e) The amount of any finance charge. (2) Then the following terms must be disclosed: (a) Amount or percentage of down payment; (b) Terms of repayment; and (c) Annual percentage rate, using the term or the abbreviation “APR”. B. Lease advertising. (1) The word “Lease” or “Smart Buy” must appear in a prominent position in the advertisement. (2) Advertising that involves consumer leases falls under Federal Regulation M. If an advertisement, promoting consumer lease on motor vehicle contains any of the following terms: (a) The amount of any payment; or (b) A statement of any capitalized cost reduction or other payment required prior to or at consummation or delivery. (3) Then the following terms must be disclosed: (a) That the advertised transaction is a lease; (b) The total amount due prior to or at consummation or delivery; (c) The number, amounts and due dates or periods of scheduled payments; (d) A statement of whether or not a security deposit is required; and (e) A statement that an extra charge may be imposed at the end of the lease term where the lessee’s liability, if any, is based on the difference between the residual value of the leased property and its realized value at the end of the lease term. C. Open ended credit terms. Examples of open-end credit are bank and gas company credit cards and stores’ revolving charge accounts. In open-end credit, the creditor reasonably expects the customer to make repeated transactions. The triggering terms for open-ended credit are: (1) Statement of when the finance charge begins to accrue, including any “free ride” period, if any. (2) Statement of either the periodic rate used to compute the finance charge or the annual percentage rate. Arkansas Automobile Dealers Association | 47
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