The Federal Trade Commission (FTC) has released a new set of Frequently Asked Questions (FAQs) aimed at clarifying how the agency interprets federal advertising requirements for motor vehicle dealers, RVDA reported Wednesday, Sept. 16.
The document, issued last month and available at rvda.org and on the FTC’s website, follows months of industry discussion about price‑advertising expectations and supplements earlier guidance the FTC provided during various compliance webinars, including those conducted by RVDA’s endorsed compliance partner KPA.
The release comes at a time when the FTC has made price transparency a visible enforcement priority across multiple industries, including motor vehicle sales. Earlier this year, the agency sent warning letters to 97 dealerships outlining concerns about potentially illegal advertising practices. The FTC has also announced two settlements with auto dealers involving allegations of deceptive advertising and requiring those dealers to display the total vehicle price clearly and prominently. As always, FTC settlements apply only to the parties involved and are not admissions of wrongdoing.
Clarity on Existing Law Regarding Doc Fees
The new FAQs are intended to help dealers understand how the FTC views compliance under Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices. While the document does not change existing law, it provides insight into how the agency evaluates advertising practices and where it believes dealers should focus their attention.
One of the most significant clarifications involves the advertised price. According to the FTC, the most prominent price in any advertisement must be the all‑in, out‑the‑door price available to all consumers. Prominence is not limited to font size; the agency will consider whether a price is more likely to draw consumer attention. The all‑in price must include every dealer‑required fee, including the doc fee. Dealers may separately disclose the doc fee, but only if that disclosure is less prominent than the all‑in price. The only charges that may be excluded are certain government‑mandated fees paid directly by consumers.
Listing MSRP in Advertising & In Transit Vehicles
The FAQs also address MSRP advertising, noting that dealers may list MSRP as long as it is less prominent than the actual all‑in price. On government charges, the FTC states that fees authorized but not mandated by government, or fees the government requires the dealer to pay but the dealer passes on to consumers, must be included in the advertised price.
Other sections of the FAQs cover credit and lease advertising, the treatment of rebates and discounts, and the rules surrounding dealer financing incentives. The FTC reiterates that the most prominent price cannot depend on dealer financing, though dealers may advertise a financing discount if it is displayed less prominently. The agency also reminds dealers not to advertise vehicles that are unavailable and to clearly disclose when a vehicle is in transit.
The FAQs further explain expectations for representative photos and optional products. Dealers may use illustrative photos if they reasonably represent the vehicle offered, and they may offer optional products as long as they do not mislead consumers about whether those products are required or removable.
The FTC may update the FAQs as additional questions arise. For dealers, the new FAQs offer a clearer picture of how the FTC interprets federal advertising rules — and underscore the importance of reviewing current practices to ensure compliance.
RVDA said it will keep members informed of any new developments regarding price advertising based on FTC guidance.
