fee must be included in the advertised price, regardless of state law, but we are awaiting formal written guidance from the FTC on this question. We understand that both NADA and a number of states are continuing to work with the FTC seeking clarity on this question. In the meantime, dealers should comply with both federal and state law and, until the FTC issues written guidance, consult legal counsel and their state dealer association on how to disclose doc fees when a genuine conflict exists. WHY DO SOME STATES CONFLICT WITH THE FTC’S POSITION? The FTC has indicated that all required dealer-imposed fees must be included in advertised prices. However, several states have enacted laws that treat the doc fee as negotiable or optional — meaning it may not qualify as a “required fee” under those states’ frameworks. Other states explicitly allow the doc fee to be excluded from the price. For example: • California law, including the CA CARS Act, explicitly permits auto dealers to exclude doc fees from the advertised price with the required statutory disclaimer. • Connecticut law mandates that the conveyance fee be stated as excluded and negotiable. Including it in the price would conflict with the statute’s required disclosure format under Conn. Gen. Stat. § 14-62a(a). As a result, despite the clarity of the FTC’s position, there are several open questions regarding the interplay between state and federal law in a minority of the states. See the following section for further state-specific details. This is an evolving area of law, and we are working closely with state dealer associations and monitoring regulatory developments to ensure our guidance remains current. STATE DOC FEE ADVERTISING LAWS State laws vary widely, but we have identified five broad categories based on current state law. (Important distinctions exist, but we have grouped them for ease of analysis.) Dealers in Georgia and other states in Groups 1-3 are encouraged to follow FTC guidance and include the doc fee in the advertised price. Group 1: Doc Fee Required in Price States: AK, AR, CO, FL, GA, IA, IN, KS, KY, MA, ME, NE, NJ, NY, OK, PA, VT Your state law requires the doc fee to be included in the advertised vehicle price. Only government charges (taxes, title, registration and license) may be excluded. State law and FTC guidance are aligned in these states. What you should do: Include the doc fee in your advertised price. This is required by both your state law and FTC guidance. Group 2: Ads Must Disclose Existence of Doc Fee States: AZ, HI, NC, SC Your state law requires that advertisements disclose the existence and/or amount of the doc fee, but does not specifically require the fee to be included in the advertised price. What you should do: We recommend following FTC guidance and including the doc fee in your advertised price. In the absence of state-specific rules, federal guidance is the best available standard for compliance. Group 3: No Specific State Requirement States: AL, DC, DE, MT, ND, NH, RI, WV, WY Your state does not have a specific statute or regulation addressing the treatment of doc fees in vehicle advertising. General consumer protection laws prohibiting deceptive practices apply. What you should do: We recommend following FTC guidance and including the doc fee in your advertised price. In the absence of state-specific rules, federal guidance is the best available standard for compliance. Dealers in states included in Groups 3 and 4 should follow FTC guidance, but note that there are potentially open questions under state law. Group 4: Doc Fee Is Negotiable and May/Should Be Excluded States: CT, OR, TX, WA Your state law treats the doc fee as a negotiable or optional charge and requires it to be disclosed separately from the advertised price. In these states, including the doc fee in the advertised price may actually conflict with state law. • Connecticut: The dealer conveyance fee must be stated separately in at least 8-point bold type, and the ad must indicate the fee is negotiable. The statute uses mandatory language requiring the fee to be declared as “excluded from such advertised price.” • Oregon: The doc fee is defined as negotiable under state law and may be excluded from the statutory definition of “offering price.” • Washington: The doc fee is defined as optional and negotiable. Dealers must disclose in advertisements that the fee may be added to the sale price. What you should do: These states present a potential conflict between state advertising statutes and the FTC’s position. We strongly recommend consulting with legal counsel and your state dealer association to determine the appropriate approach for your dealership. We are actively monitoring this area for further regulatory developments. THE GENERATOR 14
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