Auto Dealer False Advertising

Most consumers who buy a used car rely on what the car dealer tells them. You can only see what’s on the outside and have no idea about the vehicle’s history. If you ask the dealership about prior accidents or vehicle damage, don’t just take their word for it. Some used car dealers don’t disclose prior damage to increase the vehicle sales price.

Get an inspection before buying a used vehicle. It can help you avoid buying a damaged car and losing your money. If you have legal questions about undisclosed vehicle damage, talk to a vehicle fraud lawyer about your legal options.

What Is False Advertising in Car Sales?

False advertising in car sales involves showing an advertised vehicle with a higher purchase price than the advertised price. This includes promoting a car at an unavailable price. It could also involve failing to include additional fees in the fine print.

Under federal law, false advertising is an advertisement that is misleading in a material respect. This could include the vehicle price, the vehicle’s condition, or the purchase terms. Misleading advertising can also involve failing to reveal material facts under the conditions advertised.

False advertising is a common tactic by shady dealerships to get consumers in the door to try and sell them a new car at a higher price. This is a bait-and-switch scam. Once you come in for one motor vehicle, you’re pressured to take another one with a higher sticker price.

Do All States Ban False Advertising for Car Dealerships?

All states have some consumer protection laws that generally prohibit deceptive business practices. However, not all states enforce their false advertising protections in the same way. Some states have much stronger consumer protection laws than others.

At the federal level, the Federal Trade Commission (FTC) enforces unfair business practice laws. Several laws restrict false advertising and other scams, including the Dodd-Frank Act, the Truth in Lending Act, and the Federal Trade Commission Act.

States also have Unfair, Deceptive, and Abusive Practices (UDAP) laws that prohibit deceptive dealer advertising. For auto dealers, this prohibits deceptive advertising practices and other dealer fraud. To understand the consumer fraud laws in your state, talk to a local dealer fraud lawyer for legal advice.

What Are Examples of Dealership False Advertising?

When you see an advertised vehicle price that’s too good to be true, it usually is. Low down payments or low interest rates may have nothing to do with the overall cost of the vehicle. Dealerships may also offer limited-time deals that will expire before you get there. An available low-priced car may be only one model and at a different location.

Car dealerships have a lot of ways to hide additional costs and conditions in a new vehicle sale. Dealerships can use different sales and requirements to increase the out-the-door price of the vehicle. Generally, the required fees and conditions of purchase must be included in the car price advertised. It’s often in the fine print at the bottom of the ad.

A lot of the small print is unclear to most consumers because there’s more than one type of price in car sales. Types of pricing terms include:

• Manufacturer suggested retail price (MSRP)
• Invoice price
• Dealer cost
• Rebates
• Dealer incentives

Financing the purchase through the dealership comes with additional financing terms. These financing terms can confuse buyers and increase the car’s overall price. Financing terms include:

• Down payment
• Security deposit
• Annual percentage rate
• Monthly payment

Dealerships can also use deceptive advertising practices when you want to trade in your old vehicle. Car dealerships may advertise that they’ll pay off your current loan, no matter how much you owe. Or they’ll say they will offer a minimum for any trade-in. Instead, they may just find ways to include these additional costs in the purchase or financing terms.

Can You Sue a Dealership for False Advertising?

It’s false advertising when a dealership runs ads with material misrepresentations. Your state attorney general can bring a false advertising claim against the dealership.

If you get scammed by the dealership, you can file a fraud claim against them. A civil fraud lawsuit will allow you to recover damages for your financial loss. This could include:

• Actual loss
• Punitive damages
• Refund and return the vehicle
• Attorneys’ fees

Can a Lawyer Help After Dealer Fraud Involving False Advertising?

If you tried to buy a car with a low advertised price but the dealer didn’t disclose additional costs, they may have committed fraud. An auto fraud lawyer can deal with the dealership and try to get your money back. If they don’t refund you, your lawyer can file a fraud lawsuit against them. To understand your legal options after a false advertising scam, contact a dealership fraud lawyer.