On March 13, 2026, the Federal Trade Commission (FTC) sent warning letters to 97 auto dealerships regarding their advertising and sales practices. While the letters were directed at a specific group, the message was unmistakably broader: every dealership should view this as a regulatory turning point.
For dealers, this is not just another compliance update—it is a clear signal that enforcement is ramping up, particularly around pricing transparency and advertising practices. Learn more about the impact of this message with the team at Charapp & Weiss, LLP.
The Core Issue: What Is the “Real” Price?
At the center of the FTC’s warning is a simple concept: the price advertised must be the price the consumer actually pays (excluding only government fees like taxes and title).
This aligns with the FTC Act’s prohibition on deceptive practices and the “offering price” concept under the CARS Rule. In practical terms, this means:
- Processing fees must be included in the advertised price
- Freight charges must be included
- Only government-imposed fees can be excluded
For many dealerships, this represents a significant shift from longstanding advertising practices—particularly in states where local law historically permitted different disclosures.
The “Gotcha” Risk: Why Small Mistakes Can Be Costly
The FTC made clear that even a single discrepancy can trigger enforcement. A screenshot of a noncompliant ad—or a deal where the customer pays more than the advertised price—can become the basis for:
- Regulatory investigations
- Consumer complaints
- Potential enforcement actions
This “gotcha” dynamic is especially relevant in today’s digital environment, where online listings, third-party marketplaces, and social media ads create a permanent record of pricing representations.
Common Advertising Pitfalls Dealers Must Address
1. Pricing Must Be Available to Everyone
Advertising a price that not all consumers can obtain—such as one dependent on conditional rebates—is a major risk area. Disclaimers do not cure the issue; in fact, regulators may treat them as evidence that the dealer never intended to honor the advertised price.
2. The End of “Partial Pricing”
Practices such as excluding freight or adding fees later in the transaction are no longer defensible. The FTC has explicitly rejected these approaches.
3. MSRP Misuse
If a dealership advertises MSRP as the price, it must be prepared to sell at that price. Advertising MSRP while intending to charge more—whether due to market conditions or add-ons—can be viewed as deceptive.
4. “Internet Price” and “Geographic Price” Myths
There is no legal distinction for:
- “Internet-only” pricing
- Pricing limited to certain geographic buyers
If a price is advertised, it must be available to all consumers—regardless of how they found the vehicle.
5. Add-Ons Under Scrutiny
Pre-installed add-ons that effectively increase the vehicle price without consumer choice are a growing enforcement focus. Optional products must be clearly disclosed as optional—not embedded in the advertised price.
Beyond Advertising: Operational and Training Implications
The FTC’s warning extends well beyond marketing departments. It directly impacts:
- Sales processes: Sales staff must accurately communicate “out-the-door” pricing, including all required charges
- F&I practices: Add-ons and optional products must be clearly distinguished from required costs
- Documentation: Buyer’s orders must align with advertised pricing structures
For example, if a dealership includes a processing fee in its advertised price, it must ensure that the buyer’s order reflects that structure correctly—without double-counting or creating inconsistencies.
Trigger Terms: A Compliance Trap in Finance and Lease Ads
Dealers should also revisit how they advertise financing and leasing terms. Under federal law:
- Certain phrases (e.g., “$0 down,” monthly payment amounts, or financing terms) trigger mandatory disclosures
- These disclosures must be clear, conspicuous, and in close proximity to the triggering statement
Failure to properly include these disclosures is a common—and easily avoidable—compliance issue.
“Clear and Conspicuous” Means More Than Fine Print
One of the most misunderstood requirements in advertising law is the standard for disclosures. It is not enough to include the information somewhere in the ad.
Disclosures must:
- Be easy to notice and read
- Appear near the claims they qualify
- Be understandable to a reasonable consumer
Burying key terms in hyperlinks, fine print, or at the bottom of a webpage is unlikely to meet this standard.
A Practical Framework: The “Dealer’s Total Price”
The newsletter provides a useful compliance model: the concept of a “Dealer’s Total Price.”
This approach:
- Includes all non-governmental fees in the advertised price
- Ensures the price is available to all consumers
- Separates optional incentives and rebates as potential reductions—not embedded discounts
For many dealers, adopting this framework can serve as a practical way to align advertising with FTC expectations.
Key Takeaways for Dealers
The FTC’s action underscores several critical points, including:
- Transparency is no longer optional—it is the foundation of compliant advertising
- Consistency matters—advertised prices, sales practices, and documentation must align
- Disclaimers are not a safety net—they can increase, not reduce, regulatory risk
- Training is essential—compliance failures often occur at the salesperson level
Moving Forward: A Time for Proactive Compliance
The FTC has effectively issued a warning to the entire industry. Dealers that act now—by auditing their advertising, retraining staff, and aligning internal processes—will be better positioned to avoid costly enforcement actions.
Those that delay may find themselves learning the same lesson under far less favorable circumstances.
If you have further questions about how to prepare your dealership for this change or you need legal advice, get in touch with the team at Charapp & Weiss today.