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Dealers' use of Groupon offers for vehicle sales a no-no: BBB

August 19, 2011
The Better Business Bureau has seen recent interest among Illinois auto dealers in participating in Groupon discount coupon offers for vehicle sales to consumers. This practice, however, appears to be illegal in Illinois. 
Patricia Kelly, senior counsel of the BBB-Chicago, said the Illinois Consumer Fraud and Deceptive Business Practices Act is clear on the issue. It states in Section 505/2J.1., “No coupon shall be offered in connection with any retail sale of a motor vehicle.”
In addition, Kelly said the Motor Vehicle Advertising Regulations also address the practice in Rule 475.590, which states, “It is an unfair or deceptive act to advertise or offer free prizes, gifts or other incentives in connection with the purchase or lease of a vehicle where the vehicle is sold or leased at a price arrived at through bargaining or negotiation . . .”
The rule also states that these incentives may be advertised or offered by dealers if “the free prize, gift or other incentive is offered through a manufacturer’s program or a manufacturer’s authorized and approved dealer advertising association without any participation by the dealer . . .”   The Groupon program is one that is not related to a manufacturer program but is one in which all sellers, including dealers, participate financially.
For these reasons, Kelly said the BBB suggests that Illinois auto dealers refrain from participating in Groupon offers for vehicles. Coupons for service or parts are permitted.
The BBB-CATA Automobile Advertising Review Program was established in 1996 as a sort of firewall between dealers and the Illinois attorney general.
Under the cooperative, the BBB notifies dealers whose ads don’t comply with the state’s rules on vehicle advertising. If subsequent ads are not brought into compliance, then the attorney general’s office is notified.