BY DAVID HAMMER Contemporary Automotive, NADA Director Earlier this year, the Federal Trade Commission (FTC) sent warning letters to 97 dealerships across the country regarding advertising practices. In response, the National Automobile Dealers Association (NADA) hosted a webinar with FTC Bureau of Consumer Protection Director Chris Mufarrige to provide dealers with greater clarity on the agency’s expectations and enforcement priorities. The message from the FTC was clear: Regulators are placing increased focus on pricing transparency and advertising accuracy, particularly for advertised vehicle prices, administrative fees, rebates and financing-related offers. As NHADA’s representative to NADA, I wanted to share the key takeaways from that discussion and considerations for New Hampshire dealers as they review their advertising practices. THE BIGGEST TAKEAWAY: ADMIN FEES MUST BE INCLUDED The most significant issue for many New Hampshire dealers involves administrative fees. During the NADA webinar, FTC officials made clear that if a dealer charges an administrative fee that every customer must pay, that fee should be included in the advertised vehicle price. According to the FTC, consumers should see the full price they can expect to pay, excluding only taxes and government-imposed fees. Importantly, the FTC is not attempting to regulate the amount of an administrative fee. Dealers may continue to charge administrative fees where permitted by state law. The agency’s focus is on how those fees are disclosed to consumers. Dealers may still disclose the administrative fee separately, but that disclosure should be less prominent than the total advertised price. The FTC also emphasized that while many states authorize administrative fees, no state requires them, reinforcing the agency’s position that such fees belong in the advertised price rather than being added afterward. For many dealers, this is the most important practical takeaway from the FTC’s recent guidance. THE PRICE YOU SHOW SHOULD BE THE PRICE THEY PAY The FTC repeatedly emphasized a simple principle: The most prominent advertised price should be the price available to consumers. The agency’s concern extends beyond administrative fees. Any mandatory dealer-imposed charge that a consumer must pay to purchase a vehicle should generally be reflected in the advertised price. According to the NADA UPDATE FTC Sends Clear Message on Dealer Advertising 8
RkJQdWJsaXNoZXIy ODQxMjUw