Changes sweep auto dealers off the showroom floor

By Jason McGlone/advertising review BBB
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Jason McGlone

The Federal Trade Commission recently announced a sizable sweep of auto dealerships nationwide about a range of issues impacting the structure of sale prices, financing, advertising disclosures, sweepstakes and prize winnings.

While none of the affected dealerships listed in the announcement is in the Boise area, issues cited are similar to advertising concerns the BBB® addresses with car dealerships on a regular basis. We hope the result of this sweep will encourage auto dealers across the country to pay closer attention to the structure of their offers, clearly show the details of their financing plans, and carefully select the type of advertising they use to get customers onto their lots to buy cars.

It’s worth mentioning that the great majority of the ads and other offers involved in the sweep seem to be reasonably typical lines of credit and/or solidly low prices. While they appear to be not entirely unbelievable offers, the problem lies within the purchasing of the vehicle. What many consumers don’t understand is that buying a car can be a complicated affair with many moving parts. Auto dealers are required and obligated to be involved with several different offices: federal, state, and municipal agencies and their respective laws, and the manufacturers whose products they sell come to mind. Ultimately, they have to make sure everyone is pleased with the deal while still making a profit.

The FTC created an accompanying article that makes deciphering these offers a little easier for consumers: “Are Car Ads Taking You for a Ride?”  It’s obviously for consumers, but the article could also prove to be helpful for car dealers in refocusing attention toward making sure advertising copy and fine print are in tip-top shape.

Whether you’re a consumer or a car dealer, BBB can help you to make sense of any questions you might have when sifting through auto ads. Feel free to get in touch with us and, of course, check out any auto dealers you’re considering buying from with bbb.org.

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1 Comment

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One response to “Changes sweep auto dealers off the showroom floor

  1. Mark Burrows

    That is the truth. When purchasing a new vehicle it is better to go in with your own money or at least a loan from your own bank and pay cash than it is to finance through the dealership. It puts them into a catch 22 situation because the financing power has been removed from them, but on the other hand they are making a sale, removing a vehicle from their lot and got cash up front.
    The best part is you are no longer dealing financially with the car dealership or the financial institute they employ. So if you screw up on your loan payment, they won’t be taking your car away. If you finance your loan through your own bank, it is likely you have some kind of loan payment insurance or grace period in place. Even a credit card assigned though that bank to absorb the payment if you miss a month.
    Point is, you should have a better line of communication with your own bank, than any other financial institute.
    You can do the math, what ever they imply by way of advertising of what the price is at so much a month for X amount of months with no money down is before they add anything to the vehicle to make it desirable. My favorite for years was they listed the automatic transmission as an option but you would be hard pressed to find any vehicle on the lot with a standard transmission. If you insisted, they would imply that it would require a special order. Strange.

    Mark Burrows

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