Chicago Automobile Trade Association

Advertised car prices wrongly doing the math on limited rebates: BBB

March 27, 2015
Dealership websites continue to be a primary source of vehicle prices proclaimed in ways that violate two Illinois rules on motor vehicle advertising, according to the Better Business Bureau, which monitors area dealers’ ads.
Patricia Kelly, counsel of the BBB’s Chicago office, added that advertising vehicle prices which are not available to all consumers is one of the new "zero tolerance" issues which the BBB forwards to the attention of the state’s attorney general’s office.
Section 475.310 of the Illinois Rules on Motor Vehicle Advertising states that "… all costs to the purchaser at the time of sale … including any costs of delivery, dealer preparation, and any other charges of any nature … must be included in the advertised price, except for taxes, license, title and DOC fee. In addition, "Purchasers shall be able to purchase all vehicles described by the advertisement at the advertised price."
A related rule is that limited rebates cannot be reflected in advertised prices. Only rebates available to all consumers may be deducted from advertised prices, as stated in Section 475.530 of the advertising rules. The two rules work in tandem to ensure all advertised vehicle prices are available to all consumers who see or hear an advertisement, no matter the format.
Kelly said dealership websites continue to be a primary source of violations of the two rules.  
"Prices are advertised that include limited rebates," she said. "Prices are also advertised that exclude freight charges. Advertised prices often exclude dealer added-on products or enhancements that will cost consumers. These dealer add-ons must be included in advertised prices."
Kelly said the BBB wants dealership Internet managers and other personnel to watch for these issues and correct them on a continuing basis. "We have seen corrections made only to have language on websites revert to the prior problematic language. Therefore, such Internet personnel must monitor these issues continually," she said.
Kelly also cautions dealers with multiple stores and websites to make sure that all their operations adhere to these standards once a particular store is identified with a problem.
"It is not a satisfactory resolution," she said, "to merely fix the identified store. All stores within the dealer’s business operation should be reviewed and adjusted, even if only one store is called to that dealer’s attention by the BBB or otherwise.
"The BBB wants to remind dealers that advertising prices that are not available to all consumers is a zero tolerance issue which will draw the attention of the Attorney General."
Matters referred to the AG’s office likely involve more than an advertising issue, Kelly said. Consumer complaint problems also are likely to be included in any resolution discussions depending on the nature of the complaints. Volume alone could be an element in opening a larger case. 
In addition to the two sections on advertising noted above, the other three zero tolerance matters are:
Rule 475.540. Dealers continue to advertise that they will pay an amount equal to or over a book value for consumers’ trade-ins. Some dealers purport to desire to merely purchase consumers’ vehicles without selling them vehicles in an effort to skirt the rule. This claim has been rejected as a way to avoid a violation.
Rule 475.590. Free gifts, prizes and other incentives are being used extensively in connection with the sale of motor vehicles. Often items of significant value are being combined with offers of minor value. Dealers are assigning a money value to customer loyalty programs such as car washes. Whatever the value, dealers are prohibited from offering anything to consumers in connection with selling vehicles where the price is negotiated.
Consumer Fraud Act, section 2 (j) (1). This provision prohibits dealers from using coupons in the sale of a motor vehicle. BBB reviewers have seen coupons, or vouchers, used extensively in connection with specific trade-in amounts and offers of trade-in assistance.


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