Va. Vehicle Dealer Board has temporary ad enforcement regs

Va. Vehicle Dealer Board has temporary ad enforcement regs

The Virginia Motor Vehicle Dealer Board staff has developed recommendations for enforcing regulations on dealer advertising of prices reflecting factory incentives and rebates. The recommendations and related enforcement will be in effect until the March MVDB meeting, when the full Board will take up the question.

The regulations came out of a meeting late last month between the MVDB and interested parties. Dealers had been confused about what they saw as differences between the positions of the MVDB and the Federal Trade Commission.

An advertised price must reflect only rebates and incentives available to everyone. Other limited rebates and incentives can then be shown as deductions, with a final price shown after the math.

An example:

MSRP $30,000

Dealer discount 2,000

College grad rebate* 1,000

Price to you $27,000

Another example:

Price $28,000

College grad rebate* 1,000

Price to you $27,000

In each example, the qualifications for the limited rebate would have to be clearly and conspicuously disclosed so that a reader would understand what is necessary to qualify.

In the second example, the initial price could be achieved through a discount available to all, other rebates available to all, and a factory financing captive incentive available to customers who finance with the factory captive. The factors leading to the initial price should be clearly and conspicuously disclosed.

It was generally agreed that all limitations and qualifications for all offers must be disclosed. Disclaimers such as –Not all customers will qualify for this price” will not be acceptable.

As for enforcement, Board staff said it will follow the process adopted in the last MVDB meeting: There will be one written warning to a dealer using improper price advertising resulting from incentives and rebates before imposition of civil penalties.

Board staff said that under the Freedom of Information Act, as interpreted by its legal advisors, it must provide a copy of any written complaint identifying the complainant if a request is filed. However, the Board will also accept and take action on anonymous complaints.

MVDB said it will work to provide more information about its policy and any educational warnings sent to dealers, and it will continue to notify dealers of the policy in its newsletter.

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