NADA COMPLIANCE ALERT PRICE ADVERTISING IN THE CURRENT TARIFF ENVIRONMENT By NADA What’s New The new and used automotive market could soon experience market conditions not seen since the COVID pandemic. It has been widely reported that the recent imposition of tariffs on imported automobiles will likely produce upward market pressure on prices, whether because of direct OEM pricing actions, increased demand for non-affected vehicles or a reduction of the supply of vehicles at pre-tariff MSRPs. There can be potential legal and regulatory pitfalls when higher vehicle prices are advertised to consumers, particularly if an advertisement attributes the higher prices to specific causes, such as the government’s imposition of tariffs. This does not mean that dealers cannot adjust the prices of their vehicles in response to market conditions and advertise their new prices — but they should be cautious when advertising new prices and, if they chose, when attributing price increases to specific causes. The Federal Trade Commission chairman recently stated that the agency will be watching companies closely if there is any price fixing among competitors or unlawful behavior on pricing due to tariffs. Why It Matters Dealers are free to set and advertise prices for new or used vehicles at whatever level they believe the market dictates, provided that such pricing complies with applicable law as well as any contractual obligations and restrictions. Dealers should consult an attorney familiar with federal, state and local law to ensure all advertisements are legally sufficient. And, of course, competing dealers should always set their prices independently and not through coordination with other dealers. Tell Me More The FTC considers the definition of “advertisement” to be very broad and includes commercial messages in WWW.KYADA.COM 15
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