Beware Deceptive Car Advertising
Recent trends reported by BBB – Chicago
By Tom Gorham
Internet Sales & Marketing Manager
5/26/2012
The Internet has promoted transparency in car prices and made it easier for consumers to research various makes and models. This has been a boon to the consumer that researches vehicles online before entering a dealership.
Most dealers have embraced this new paradigm and placed the emphasis on great customer service and reputation. It results in a more pleasant and satisfying experience for the consumer. However, it has created a situation where pricing is extremely competitive in getting a customer in the door in order to provide that great customer service.
The BBB – Chicago reported recently that a few dealers are engaging in deceptive advertising by including lease rebates in advertised pricing. Why is this deceptive?
BBB senior counsel Patricia Kelly said, “While lease rebates are available to all customers who lease, the rebates are actually limited rebates because they are only available to lease customers. Purchasers cannot obtain the rebates. Since the rebates are limited to only certain customers they cannot be deducted from advertised prices of vehicles.”
Put another way, prices cannot be advertised using rebates that are not available to everyone. That includes rebates that are for special categories such as College Grad rebates, Military rebates, etc. If an ad price disclaimer states “All Incentives included”, it may only include incentives that are available to everyone.
Other advertising faults pointed out by the BBB are:
Clear and conspicuous disclosure of material terms. Disclosures at the end of some radio spots are spoken too quickly and/or too quietly. Related to that, Kelly said listeners can’t simply be directed to a website to review the disclosures because a claim can’t be made in one forum but its disclosures made in another.
Internet pricing. It is a violation to list different selling prices for a vehicle in different advertising media; it must be the same in all.
‘Guaranteed lowest price.’ To make such a claim, the dealer must systematically monitor competitive prices in the trade area. “In order to say you have the lowest price,” said Kelly, “you really have to be the lowest.”
Clearance sale. The word cannot be used arbitrarily. It applies only when a vehicle model can no longer be ordered from the factory.
No-haggle prices. A dealership either haggles or it doesn’t. “You can’t negotiate sometimes and not negotiate other times,” said Kelly.
Consumer Fraud Act. Bad: “We will pay off your loan.” Better: “We will build your old loan into a new loan.”
Perhaps the best caution is the old axiom, “If it sounds too good to be true, it probably is.”
What can you do if you find yourself in a dealership, and you are told you don’t qualify for the price online? Leave and go elsewhere. Don’t perpetuate bad behavior. If someone misleads you up front, do you really want to trust them throughout the rest of the transaction?
