Discounts on New Cars Advertising which utilizes price comparisons should clearly and accurately identify the terms used to make comparisons or to list reductions. When offering discounts or savings of “up to,” “as high as,” or terms of similar import, the advertisement must disclose the source of the “up to/saving” amount, for example “save $7000 off MSRP.” The disclosure must be made in close proximity to the offer. In addition, an example of a vehicle which qualifies for the largest advertised “up to” amount should be included in the advertisement. If a new vehicle is reduced from or compared to the MSRP, the advertisement must accurately state the original price. Rebates Advertisements must clearly disclose if a rebate involves dealer participation. If rebates are further limited to certain categories within a specific model, then these additional limitations must be disclosed. Advertisements must clearly disclose whether rebates have already been incorporated into the advertised prices. Use of claims of rebates “up to” a certain amount is deceptive unless the advertisement clearly and conspicuously discloses in close proximity to such offer the actual dollar amount of the largest advertised rebate and the vehicles or models to which they apply. Special Incentive Programs Special incentive programs are those that involve rebates, discounts, and/or financing that only apply to a small percentage of the buying public. Incentive programs that apply only to first time buyers, college graduates, military personnel, previous owners or programs of similar import will be considered special incentive programs. Since this special incentive only applies to a small percentage of the consuming public, it may not be figured in the advertised price. The amount of the special incentive may be listed in the advertisement as an additional incentive to those who qualify. Factory Invoice “Factory invoice” is generally understood to refer to the manufacturer’s initial charge to the dealer. Offers to sell vehicles for below, at, or near “factory invoice” are acceptable, provided they are honored and can be substantiated. The advertised price may exclude only tax, tag, title and Georgia Lemon Law fees. The term “factory invoice” may only be used if the dealer has a sufficient supply of vehicles with no dealer installed options to satisfy reasonably expectable public demand. Dealer Cost/Dealer Invoice/Dead Cost Offers It is deceptive and misleading practice and a violation of the Fair Business Practices Act to advertise the terms “dealer cost,” “cost,” “dealer invoice,” or terms of a similar import unless the term is fully explained in immediate proximity to the claim. The vehicle must be sold for the actual net cost that the dealer paid, less any dealer holdbacks, dealer factory rebates, or incentives, and not including overhead expenses or profit. Only tax, tag, title, and Georgia Lemon Law fees may be added. The terms “dealer cost,” “dealer invoice,” and similar terms do not refer to universal or standard documents in the industry, and therefore, these terms should not be used to advertise vehicles, unless it is disclosed in immediate proximity to the offer what is included in the advertised price. Dealer installed options on vehicles included in a “dealer invoice” sale must be sold at the dealer’s actual documented internal cost. Options installed at the request of the customer following contact/negotiation with the dealership may be sold at prices other than the dealer’s actual documented internal cost. Lifetime Warranties If an advertisement uses “lifetime,” “life,” or similar representations to describe the duration of a warranty or guarantee, then the advertisement should disclose, with such clarity and prominence as will be noticed and understood by prospective purchasers, the life to which the representation refers.19 It is important to note that businesses that advertise lifetime warranties on goods and thereafter go out of business may not be relieved of responsibility to honor those warranties. “Money-Back” Guarantees A seller may use the terms “Money Back Guarantee,” “Satisfaction Guaranteed,” “Risk-Free Trial,” or similar representations only if the seller refunds the full purchase price of the product at the buyer’s request, and clearly and conspicuously discloses any conditions or limitations in the advertisement. 19 16 C.F.R. § 239.4 (2007). WWW.GADA.COM | 93
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