Three dealership website advertising problems you can easily avoid

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As print, radio, and television media become a smaller part of consumers’ lives, dealerships are relying more on internet advertising to reach new clients. Despite this increased use of internet advertising, many dealership websites are not compliant with applicable laws. For example, although many California dealerships provide legally-mandated disclosures after a monthly lease payment in their print ads, they often fail to provide these disclosures online or bury them in a tiny disclaimer at the bottom of a web page. But the majority of advertising laws apply consistently in all forms of media. This article briefly addresses three major deficiencies that we often see on dealership websites; it is not legal advice or a guide on how to avoid liability for these deficiencies. Rather, it is a primer to identify when you need to utilize experienced automotive counsel to perform a comprehensive website review.

1) Failure to include price disclaimers after all website vehicle prices

Anytime a dealer advertises a vehicle price, California law requires that a price disclaimer follows. Failure to include it means that the dealership must honor the advertised price without adding any taxes or fees. The Vehicle Code provides the following disclaimer that covers all applicable charges:

“plus government fees and taxes, any finance charges, any dealer document processing charge, any electronic filing charge, and any emission testing charge.”

This should be clearly and conspicuously provided near every vehicle price listed on your website so that customers know it modifies the price. This includes inventory pages listing several vehicles and their prices.

  • Don’t post price disclaimers at the very bottom of webpages, far below the price.
  • Don’t post unreadable disclaimers that are too small or blend in with the background.
    • Disclaimers must be readable on any device, including small mobile devices.
  • Don’t provide a price disclaimer in a hyperlink.
    • Hyperlinks should be avoided for legally-required disclosures per FTC guidance.
  • Don’t bury a price disclaimer in a paragraph of text.
  • Don’t post disclaimers in any fashion that requires consumers to “hunt” for them.
  • Don’t make up your own price disclaimer such as “payment and price amounts do not include license, title, tags, doc fees or dealer charges.”
    • This may look similar to the Vehicle Code disclaimer but it omits important charges and contains vague “dealer charges” that may be unlawful.
  • Don’t post price disclaimers that appear and disappear, such as a banner ad with a moving price disclaimer or a disclaimer that only appears when the cursor hovers over certain text.
  • Don’t use abbreviations or otherwise shorten the disclaimer (e.g. “doc fees” is vague).

2) Failure to clearly and conspicuously provide lease and financing disclosures

California dealership websites often mention a monthly lease or finance payment and omit or bury legally-required disclosures. This is an easy target for regulators since the law is clear that dealers have to clearly and conspicuously provide lease and financing disclaimers when triggered by the terms of an offer. Whether advertised in a large banner ad, a small “lease offer” box in a list of several vehicles in inventory, or on the page for a particular vehicle, applicable disclosures must be clearly and conspicuously provided.

Whenever a website lists any one of the following financing terms:

  1. A downpayment amount (as a number or percentage), i.e. “$1,000 down;”
  2. The number of payments or period of repayment, i.e. 60 months;
  3. The amount of any payment, i.e. $250 per month; or
  4. The amount of any finance charge, i.e. $3,451 finance charge,

All of the following need to be clearly and conspicuously disclosed:

  1. A downpayment amount;
  2. The APR (if it increases over time, those terms must be included as well);
  3. The terms of repayment over the term, including any balloon payment, i.e. $250 per month for 60 months.

Whenever a website lists any one of the following lease terms:

  1. The amount of any lease payment; or
  2. The statement of any payment due at lease signing (or lack thereof).

All of the following need to be clearly and conspicuously disclosed:

  1. That the transaction is a lease;
  2. The total amount due at signing (not merely the downpayment);
  3. The number, amounts, and payment schedule of lease payments, i.e. 36 monthly payments of $250;
  4. Whether or not a security deposit is required;
  5. The mileage limit and charge per excess mile;
  6. The Statement “plus tax and license,” unless amounts for tax, licensing and registration are included in the lease payments.

If any of the above lease or finance trigger terms are listed on any publically-accessible webpage, the dealership must provide the corresponding disclosures. And if there is not enough room to provide required disclosures, the offer should be relocated to a page where disclosures can be provided.

3) “Internet pricing” and “instant pricing”.

Never advertise an “Internet Price,” “Internet Special” or any other term that suggests the price is only for internet customers. California law flatly prohibits this practice since any price advertised to the public generally is one that a dealer must provide to any customer who wants to buy the vehicle, regardless of whether or not they have seen the ad. This practice also reminds us of older dealer websites that would ask customers to print off a page and bring it in for the “internet price.” Requiring such a print out, of course, also violates the general pricing rule above and makes a dealership seem outdated. “Our price,” “[Dealership Name] Price,” or “Sales Price” are acceptable substitutes that do not suggest internet pricing. But remember, using the term "price" should be reserved to advertise the dealer's price before rebates are applied.

Although it is permissible to ask clients to customize a vehicle (e.g. trim level and accessories) for a personalized quote, some instant price mechanisms may be considered advertisements to the general public. If any customer can click an instant pricing button for a vehicle to get the same “instant price” without any customization or communication with the dealership before that price is displayed, this function may not qualify as a one-on-one quote to individual customers. If your dealership website utilizes instant pricing that does not involve one-on-one communications with the customer before displaying a price, the “instant price” should be treated as a generally advertised price and any customer that seeks to purchase the vehicle (whether or not they saw the website or instant price) should receive that price or a lower negotiated price.

This is just a brief overview of three common website advertising issues. Your dealership can minimize advertising liability much further by utilizing an experienced automotive industry attorney to review and suggest revisions to your website. They can analyze the content of your webpages more comprehensively and work on more complicated liability issues such as maintaining a compliant privacy policy, developing practices to avoid sending unsolicited emails that violate California or federal law, and reviewing how your dealership handles online credit applications. By updating your website content and practices, your dealership can benefit from clear and effective online advertising while minimizing legal liability.