been discussed by various experts in the industry, it does elaborate on some long-awaited questions, such as in-transit vehicles. In-transit vehicles are permitted to be advertised, but it must be clear that the vehicles are not on the dealership’s lot. Transparency is most important: If a vehicle is in transit or located at an off-site location, the advertisement must plainly state this fact. www.ftc.gov/business-guidance/resources/automobile-industrypricing-transparency-faqs HOW DEALERS CAN AVOID FTC ACTION The most prominent price needs to be the ceiling, not the floor. Any charge the dealership imposes and a consumer must pay, including processing or documentation fees, freight or destination, belongs in the dealer’s most prominent advertised price. Only government charges (tax, title and registration) may be excluded. Audit your online listings and third-party postings so the advertised price matches the price a consumer is actually offered. Sell add-ons as optional. Products added to a vehicle — including paint or fabric protection, VIN etching, total loss protection and service contracts — should have value to the consumer and must be disclosed, itemized and truly optional. Any pre-installed product to be charged to the consumer must be included in the most prominent advertised price. For best practices, it is advised not to pre-install optional products. In the Chase Nissan and Napleton matters, mislabeled and unauthorized add-ons were central to the government’s case. Get express, informed consent for every charge. The consent requirement in recent settlement orders is specific: Before adding a charge, explain what it covers, how much it costs and whether it is optional, then obtain the consumer’s affirmative agreement. A signature at the end of a long closing process or a final payment screen does not cure a charge that was never clearly explained. Build documented consent into your F&I workflow so each add-on has a clear, separate authorization. Make sure you have those menus signed, dated and explained to the consumers. Disclosures. The disclosures in advertisements should be “clear and conspicuous” and used to explain an advertised term, NOT to negate it. Deliver what you advertise. If a vehicle is advertised as “certified,” complete the certification and honor the associated warranty. The certification should be clear whether it’s a dealer certification or a manufacturer certification process. Consumers automatically think it’s manufacturer-certified, and if it’s not, stating only “certified” is deceptive. Do not charge separately to certify a car already advertised as certified. Do not advertise vehicles you cannot sell or prices that cannot be met. Train your people and audit regularly. The dealer as well as managers within your dealership(s) must stress their unwavering commitment to ethical conduct and compliance with the law. Sales and finance staff need to know what is advertised and what is included in the price. A single screenshot of a price the dealership will not honor, or one deal with an unauthorized charge, is the fact pattern these cases are built on. Periodic self-audits, with the assistance of counsel, of advertising, deal jackets, and add-on authorizations, will catch problems before a regulator does. Continued training of staff is necessary to remain in compliance. The bottom line is simple: The most prominent price a customer sees should be the price the customer pays (or less), and every additional charge should be optional, disclosed and affirmatively authorized. That standard is inexpensive to meet compared with the cost of an enforcement action. Dealers who move now, with the guidance of counsel, are far better positioned than those who receive demands from government authorities. vada.com 7
RkJQdWJsaXNoZXIy ODQxMjUw