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Advertised price must include all costs, remind BBB ad monitors

November 15, 2010

By Patricia Kelly, Better Business Bureau

Dealers are having challenges during current economic conditions meeting business goals and maintaining profits. The BBB has seen many new and creative ways to advertise to consumers who may be more reluctant to purchase automobiles during these times.  

Most of these advertisements are straightforward and not deceptive. However, we also see some problems from time to time and have discussed these issues with the dealers and their advertising agencies. We have also sent letters of violation to correct the problems.

One issue the BBB has encountered involves Rule 475.310, which states that the advertised price of a motor vehicle must include all costs to the purchaser which are necessary or usual prior to delivery including delivery charges, dealer preparation and any other charges of any nature. However, taxes, license, title and a documentary service fee may be deducted from the advertised price as long as the advertisement clearly discloses that these fees are excluded from the advertised price.

The BBB has become aware of advertisements in which different fees or costs to consumers are being deducted from the advertised prices of automobiles. These other amounts used to reduce the amount of the advertised price include specific down payment amounts, specific trade in amounts, freight charges and simply "other fees."

We want to remind dealers and their advertising agencies that the only amounts that legally can be deducted from the advertised price are taxes, a license fee, a title fee and a documentary service fee. Any other amounts are illegal attempts to lower the advertised prices of automobiles as compared to the prices being offered by competing dealers. 

The goal of the BBB/CATA advertising review program is to level the playing field in fairness to all dealers so that they can fairly compete. The tough economic times now make that goal even more important. 

The BBB wants to ensure that all dealers are adhering to truthful and honest principles in the advertisement of automobiles. With that goal in mind the BBB reminds all dealers to carefully examine their advertisements to ensure that only the amounts set out in Rule 475.310 are deducted from the advertised prices.

Patricia Kelly is senior counsel for the BBB of Chicago & northern Illinois.