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Dealer advertising a focus of attorney general's meeting

February 23, 2018
The area’s automotive retailing landscape faces change in the near term, with the imminent additions of CarSaver and Carvana online showrooms. But while their selling methods can differ from a traditional dealership, they must follow the same motor vehicle advertising regulations that dealers must follow.
That is the opinion of assistant Illinois attorney general Greg Grzeskiewicz, who spoke Feb. 13 at a regular meeting with representatives of the CATA, the Illinois Automobile Dealers Association, and advertisers.
Notably, the lifetime warranty offered by CarSaver, a Walmart entity, covers all repairs to a vehicle’s engine, transmission and drivetrain, with no time or mileage limits. While it is permissible for dealers to offer warranty coverage, Grzeskiewicz said a warranty for the life of a vehicle is not allowed; more limited coverage of, say, one month or 1,000 miles is permitted.
Ray Scarpelli Jr., the CATA chairman, said: "We feel that if we offer free things — warranties, free iPads and the like — it’s a slippery slope. Lifetime warranties lead to free oil changes and tires for life. It’s never really free. Ultimately the customer would share in the cost of it, if not all of it. At this point, we (the CATA) are not for it."
Larry Doll, the IADA general counsel, added: "You can’t use the word free in advertising, but you can offer (a warranty). But you can’t use insurance to pay for the cost of it, so the dealer must pay for it." Doll said such offers typically are pushed by the insurers.
The state’s motor vehicle advertising regulations permit a dealer to advertise a free warranty — a gift — if the cost of the gift is paid for by the manufacturer or a dealer advertising association.
Another topic raised at the meeting was selling all vehicles at not more than their advertised prices. "We’ve been busy" enforcing that regulation, Grzeskiewicz said. "Since 2013, we’ve been on an uptick. We are trying to increase the penalties."
John Crane, president of the Hawk Auto Group and a CATA director, said: "The rules that we have in place have a positive influence for the consumer. We’re not opposed to enforcing the regulations at all."
Patricia Kelly, general counsel of the Better Business Bureau of Chicago and northeast Illinois, reviewed the BBB’s secret shopper program that tests dealers’ conformity with the advertising regulations. The shoppers’ communication with a dealership usually starts via email.
"Some of our (attorney general’s office) investigations start with advertising," Grzeskiewicz added. Transactional missteps also can lead to investigations.