4. The availability of any rebates or discounts by factoring into the advertised price those that are not widely available to all consumers; 5. The availability of vehicles at an advertised price; 6. Whether any consumer has been, or will be, preapproved or guaranteed for any product, service or term; 7. The information about a consumer’s application for financing; 8. Whether a transaction is final or binding on all parties; 9. Whether cash down payments, trade-ins, charging fees are refundable or initiating legal proceedings if a transaction is not finalized; 10.Whether or when a dealer will pay off some or all of the financing or lease on a consumer’s trade-in; 11. Whether reviews or ratings of the dealer or the dealer’s products/services are unbiased and independent; 12.Whether the dealer is affiliated with any United States government or branch of the armed forces; 13.Whether a consumer has won a prize or sweepstakes; 14. Whether, or under what circumstances, a motor vehicle may be moved, including across state lines or out of the country; and 15.Whether, or under what circumstances, a motor vehicle may be repossessed. As you can see, there is a lot to digest here in just the vehicle advertisements. What I said earlier about separate articles should now make a lot more sense! Disclosure Requirements Through the CARS Rule, the FTC wants to further “instruct you” on what you need to disclose when placing advertisements and during the entire documentation process. “Offering Price” Whenever you advertise a specific vehicle or finance special for a group of vehicles, you will have to identify the vehicle’s “offering price.” This offering price includes everything except any required government charges (all fees or charges imposed by federal, state or local government agencies, including taxes, license and registration costs, inspection or certification costs, and any other such fees or charges). Long gone are the days of “MSRP only” pricing or “click here for details” links, and if you have not yet noticed, you can no longer state “Plus” document processing charges, mandatory add-ons or filing charges in a disclaimer. They must be included in the offering price. “Offering Price” in First Communication with Consumer The regulation is as novel as it is strange. We have received multiple questions about this during a live webinar co-hosted by me, Chris Cleveland (CEO) and Andy Graff (COO) and posted the answers in our Frequently Asked Questions (FAQ) brochure that was distributed to attendees. If a consumer contacts you about a specific vehicle (or financing special for a group of vehicles), whether it be an online chat, over the phone, in an email or in a text message, you must respond to them with the offering price of the vehicle. One of the questions fielded was whether you had to tell the consumer the offering price even if the consumer did not ask about the price specifically. The regulations point to “yes.” If you did not attend our webinar, you can find more questions about these communications and about other aspects of the CARS Rule in our FAQs brochure by scanning the QR code. https://sales.complyauto.com/ ftc-cars-rule-faqs Rebates, Discounts and “Pre-approved” Loans The FTC prohibits you from factoring them into the advertised price but further clarifies that this prohibited activity involves rebates and discounts that are limited to only a few consumers (i.e., those rebates that are only available for the most expensive trim of a particular model or only to consumers with high credit scores). What is more important, suggests the FTC, is that you don’t make misrepresentations and will allow you to advertise rebates and discounts, and their limitations, in a “truthful manner.” This tells us that any rebates or discounts, and their limitations, must be clearly and conspicuously identified in the advertisement. Add-Ons That are Not Required Specifically, the FTC requires you to disclose in writing that the purchase of optional add-ons is not required for vehicle purchase or lease. This, the FTC assures, was prescribed for the purpose of preventing unfair or deceptive acts or practices. Total Lease or Finance Payments and Comparisons A purported common practice that the FTC aims to curtail is dealers emphasizing a low monthly payment while diverting a consumer’s attention away from the overall cost of financing or leasing the vehicle. Therefore, anytime you advertise or mention a monthly lease or finance payment, you must also identify the total amount the consumer will pay to lease or purchase the vehicle at that monthly payment after making all payments as scheduled. Comparing Monthly Payments Many of the complaints the FTC received were about dealers lowering monthly payments without telling consumers that the length of the loan is extended, thus making the purchase or lease of a vehicle more expensive over the life of the payments. Now, anytime you compare two monthly payments (such as via a desking tool’s proposal sheet or payment quote), you must include a clear and conspicuous disclosure that the lower monthly payment will increase the total amount the consumer will pay to purchase or lease the vehicle. WVADA News 24
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