Section 16 of 20
DMV Dealer Continuing Education
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Advertising and the Law
Under Federal and California law, it is unlawful to advertise any statements which are untrue or misleading, or as part of a plan or scheme with the intent not to sell any vehicle or service so advertised at the stated price.
The definition of “advertising” or “advertisement” includes all media methods used to promotes a product or service including to Consumers including:
- Newspapers, magazines, leaflets, catalogs, and fliers
- Radio, television and public address systems
- Direct mail
- Any sign (exterior or interior), display, literature or price tag
- Telephone solicitations
- Online messages such as those on the Internet
When Advertising always:
- Identify yourself as a dealer and include your dealership name & DMV license #
- Identify the vehicle advertised by its license number -or- VIN (last 6 digits or more) and the model year, make, model
- Fully specify and disclose all Terms of Sale in the advertisement including all costs (except taxes, registration fees, tire fee, smog fees and DOC fee)
- Withdraw ad(s) within 48 hours when the vehicle has been sold or is no longer for sale
- Honor an advertised price, even if the buyer is not aware of the advertisement
- Include an “Offer Expires” date in every ad
- A Used Vehicle as New
- A guaranteed trade-in allowance
- “Free” merchandise, gifts or services that require the purchase of a vehicle
- Vehicles a specified dealer price without disclosing the number of vehicles in stock at the advertised price
- An underselling claim… “We have the lowest prices” or “we will beat any dealer’s price” unless you have conducted a recent survey providing these claims and you maintain records to substantiate the claim
- Represent the dealer Documentation Fee as a governmental fee
- Use vehicle photos that show options not included in the advertised price
- Use “rebate” or similar words, such as “cash back”…unless expressed with a specific dollar amount and is offered by the manufacturer (or their distributor) and sent directly to the Buyer
- Use a coupon or simulated check in an advertisement
- Use “Invoice”, “Dealer’s Invoice”, “wholesale invoice” or similar terms that refer to a Dealer’s cost for a vehicle
- Use terms such as “no Down Payment” unless you will sell the vehicle to any qualified purchaser without a prior payment of any kind or trade-in
- State that a vehicle is equipped with all the “factory-installed” optional equipment when it is not
Certified Used Vehicles (Car Buyer’s Bill of Rights)
Never advertise or sell a used car as “Certified” unless your Dealership has performed a complete inspection of the vehicle and provided consumers with a copy of the Inspection Report.
Never advertise or sell as Used Vehicle “Certified” when:
- The odometer does not indicate the actual mileage of the vehicle.
- The vehicle was reacquired by the manufacturer or dealer under state or federal warranty law (i.e. “Lemon Law”).
- The vehicle was damaged by a collision, fire, or flood unless repaired to safe operational condition prior to sale
- The title was branded as a lemon law buyback, manufacturer repurchase, salvage, junk, non-repairable, or similar designation
- The vehicle has frame damage or was sold “as is”.