trade-in of any kind is required at delivery (not even sales tax, license fees or use of any manufacturer’s rebate). Likewise, if manufacturer captives want dealers to advertise “no interest” loans but said the offer is “no interest” because the consumer is buying down his or her own rate through the life of the loan, it is technically not a “no interest” loan and should not be advertised as such. In vehicle lease advertisements, a Regulation M “trigger term” is: • A statement of any capitalized cost reduction or other payment required before or at lease consummation, or by delivery if delivery takes place after consummation, or that no payment is required; OR • The amount of any payment. If any of the above Regulation M trigger terms appear in a vehicle lease advertisement, then the following disclosures must appear “clearly and conspicuously” and in proximity to the trigger term in the advertisement: 1. A statement that the transaction advertised is a lease; AND 2. The total amount of any payment (such as security deposit or capitalized cost reduction) required before or at the consummation of the lease, or by delivery if delivery takes place after consummation, or a statement that no such payment is required; AND 3. The number, amounts and due dates or periods of scheduled payments under the lease; AND 4. Whether or not a security deposit is required; AND 5. In leases where the consumer’s liability is based on the difference between the vehicle’s residual and its realized value at the end of the lease term, that an extra charge may be imposed at the end of the lease term. Many manufacturers are requiring dealers to advertise through their chosen third-party sites that dealers may not have control over all terms and conditions advertised. In the event the third‑party site is advertising a “trigger term” such as the amount of any payment if the follow-on disclosures cannot appear or they aren’t accurate with the third party, dealers should look at changing how they advertise with the third party such as using the advertised price of the vehicle instead. DISCLOSURES Disclosures in advertisements should be “clear and conspicuous” and used to explain an advertised term, not to negate it. Disclosures should: • Tell the consumer what is included and excluded from the advertised price (i.e., freight is included, but tax and processing charge (voluntary and cost of $895) is not included). • State that the MSRP is the Manufacturers Suggested Retail Price, and that the price is set by the dealer. • Have the consumer contact the dealership to verify the vehicle’s availability, options, price and incentive eligibility prior to purchase. • State the processing fee as voluntary and the price the dealer charges for that fee. • Let the consumer know that financing and leasing are subject to credit approval. However, it is noted that dealers should never tell a customer that they must finance through the dealership to get the advertised price. The vehicle should be sold at the advertised price to ALL customers whether the customer is paying cash, using dealer-arranged financing or using their own financing. • Disclose whether the pictures online are stock photos or actual images of the vehicle being sold. If stock photos are used, tell the consumer that it’s a stock photo example and not the actual car itself, and thus, the photos may not reflect the exact vehicle color, trim, options or other specifications. For proper disclosures, dealers should seek legal advice from experienced dealer counsel to determine if their disclosures are appropriate. “CLEAR AND CONSPICUOUS” DISCLOSURES Whether disclosures in vehicle advertisements meet the standard of “clear and conspicuous” depends on whether consumers actually perceive and understand the disclosure in the overall context of the vehicle advertisement. 14 Virginia Auto Dealer
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