Automobile Advertising – Ohio Guidelines From A to Z

New and used automotive dealers and their marketing partners should be aware of the many Ohio laws and regulations affecting their vehicle advertisements. From the Availability of vehicles to complying with Regulation Z, here is a comprehensive guide that addresses common areas of concern, many that we see frequently in our advertising review work.

Auto dealers should be aware that the penalties for advertising violations can be steep.  The Ohio Attorney General, together with the Ohio Bureau of Motor Vehicles, may contact, investigate, or take action against dealerships that fail to meet these advertising standards. Ohio also allows consumers to sue auto dealers under a private right of action for triple their damages and their attorneys’ fees.

How does your advertising stack up against the guidelines below?

Advertising Format

Print size.  The use of any print in a type size or style that is not readily noticeable is deceptive. Ten-point type in newspaper advertisements, direct mail solicitations, or any other written advertisement is presumed readily noticeable.

Photographs and illustrations.  The use of inaccurate photographs or illustrations when advertising specific automobiles is deceptive.

Abbreviations.  The use of any unexplained abbreviation that is confusing, misleading, or not readily understood by the general public is deceptive.

“Specially selected,” “valued customer,” or similar terms.  The use of the terms “specially selected,” “valued customer,” or similar terms is deceptive if, in fact, the consumer has not been specifically targeted with the advertisement.

Exclusions and Limitations of Offers

General.  A dealer may not make any offer without clearly and conspicuously stating, in close proximity to the words stating the offer, any material exclusions, reservations, limitations, modifications, or conditions. All disclosures must be easily legible to anyone reading the advertisement.

Footnotes.  A statement of exclusions, reservations, limitations, modifications, or conditions which appears in a footnote to an advertisement must be referenced in the advertisement by an asterisk or other symbol placed next to the offer in close proximity to the words stating the offer.

Use of “Free” and Other Similar Words

Price increase.  A dealer may not advertise an offer of goods or services as “free” when the cost of the “free” offer is passed on to the consumer by raising the regular price of goods or services that must be purchased in connection with the “free” offer.

Disclosure.  When using the word “free,” all the terms, conditions, and obligations upon which receipt and retention of the “free” goods or services are contingent must be set forth clearly and conspicuously at the outset of the offer. Terms, conditions, and obligations of the offer must be printed in a type size at least half as large as the word “free,” and all of the terms, conditions, and obligations should appear in close proximity to the offer of “free” goods or services. Disclosure of the terms of the offer set forth in a footnote of an advertisement to which reference is made by an asterisk or other symbol placed next to the offer is not regarded as making disclosure at the outset.

Continuous or repeated “free” offers.  The advertisement of continuous or repeated “free” offers is deceptive since the supplier’s regular price for goods to be purchased with the “free” offer becomes the regular price.

Substantiation

A dealer may not make any representations, claims, or assertions of fact unless at the time such were made, the dealer has a reasonable basis in fact to make the claims. A dealer may rely on factual, objective, quantifiable, clinical or scientific data or other competent and reliable evidence which substantiates such representations.

Price Comparisons

New vehicles.  A dealer may not compare an advertised price for a new vehicle to any other price unless the other price is “list,” “sticker,” or “invoice.”

Used vehicles.  An advertised price for a used vehicle may not be compared to the “list,” “sticker,” or “invoice” price.

Purchase Price

An advertised purchase price must include the total amount that a consumer is required to pay the dealer pursuant to the contract. Tax, title, and registration fees and documentary service changes may be excluded.

“Liquidation Sale” and Similar Terms

The use of “liquidation sale,” “public notice,” “close out sale,” “public sale,” “lost our lease sale,” or similar terms used to induce a belief that upon disposal of the stock of goods on hand the business will cease and be discontinued at the premises where the sale is conducted, unless such is the case, is unfair and deceptive. A distress sale must not extend for greater than an initial 45 days without the motor vehicle dealer disclosing the extension on advertisements. The total length of the sale must not exceed 90 days.

Representation of Dealer

A dealer may not misrepresent in any way the size, inventory, or nature of the business of the dealer; the expertise of the dealer; or the ability or capacity of the dealer, manufacturer, advertising association, or advertising group to offer price reductions. The use of “factory outlet,” “authorized distribution center,” “factory authorized sale,” or similar terms are samples of unfair and deceptive misrepresentations.

Availability OF Vehicles

General.  A dealer may not offer a vehicle at a specific price or terms and subsequently fail to make the vehicle available for sale. This includes vehicles that are advertised with terms such as “as low as” or “up to x% off.”

Advertising of vehicle not in stock.  If an advertised vehicle is not in stock, the advertisement must specify that the vehicle is not in stock and must be ordered.

Disclosure of limited number of vehicles available at an advertised price.  If the number of vehicles available at the advertised price is not likely to meet reasonably anticipated demand, the advertisement must include a statement indicating the number of vehicles in stock at the advertised selling price. All advertised prices must apply to all model vehicles as described in the advertisement for the same period of time, unless the advertisement clearly and conspicuously discloses the limitations.

MSRP

A dealer may only use the term “MSRP,” “list,” or “sticker” when referencing the manufacturer’s suggested retail price for a new vehicle.

Savings

A dealer may not represent, state, or imply in any advertisement that the purchase price is a “savings,” “discount,” or words of similar import unless it is in fact a “savings” or “discount” from the “list” or “sticker.”

Use of “Cost”

A dealer may not use the word “cost” or words or concepts of similar import, inference, or implication, except “invoice,” which relate to any reference price other than “list” or “sticker” in any advertisements. If a dealer uses the word “invoice” in any advertisement, the dealer must clearly and conspicuously disclose in the advertisement that the invoice price may not reflect the dealer’s actual cost of the vehicle, and must make the actual invoice or a copy thereof available to consumers upon request.

Used Vehicles

A dealer may not fail to disclose the fact that the vehicle is used if it is not new. The terms “previously owned” or “pre-owned” have the same meaning and may be substituted for the term “used.”

Trade-ins

A dealer may not advertise a specific or minimum trade-in price unless (a) the price is within the dealer’s normal trade-in price range; and, (b) the advertisement clearly and conspicuously discloses the conditions the trade-in vehicle must meet before such advertised price will be paid. A dealer may not increase the price of the purchased vehicle to compensate for the increased price of a trade-in. A dealer may not advertise the price to be paid for trade-in vehicles as a range of prices.

Sale Dates

A dealer must disclose the beginning and ending dates of any sale or other offer for the sale of a motor vehicle. However, if the dealer states and/or lists the specific quantity of vehicles available for sale, the dealer shall only be required to disclose the beginning date of the sale and may disclose the ending date by use of the phrase “while supply lasts.” Additionally, a dealer is not required to list a beginning date for a sale, if such sale begins on the date the advertisement appears.

Rebates

Disclosures.  A dealer may not advertise, represent, or offer a rebate, interest reduction program, or similar program or procedure to which the dealer financially contributes without the following clear and conspicuous disclosure: “dealer contribution may affect consumer cost,” or other words or terms which convey to the public the effect on consumer’s cost.

Availability.  If a rebate, discount, or price reduction is not available to all consumers, the amount may not be subtracted to arrive at an advertised price. The availability of such a rebate or discount may be separately stated if all material conditions or requirements that must be satisfied for a consumer to obtain the rebate, discount, or price reduction are clearly and conspicuously disclosed in close proximity to the amount of the rebate, discount, or price reduction in easily noticeable print.

Conversion Vans

A dealer may not advertise a price for a conversion van without setting forth separately the “list” price for the vehicle, along with the price for the conversion package, or fail to show the discounts or other deductions which are being applied to each of these prices to arrive at the overall advertised price for the vehicle.

Promises of Credit

“Financing for all,” “no credit rejected,” “we finance everyone,” “bad credit, no problem,” “credit problems, we can help,” or words that imply that credit is available to all applicants may not be used unless a summary of all the material terms and conditions relating to a consumer’s ability to obtain credit is disclosed. This requires disclosure of trade-in amounts, down payment amounts, and credit terms such as higher annual percentage rates required in order to obtain credit.

Qualified Buyer or Qualified Lessee Restrictions

If credit terms or particular prices are limited to “qualified buyers,” “qualified lessees,” or “subject to approved credit” by the use of those terms or similar terms, then the advertisement must clearly and conspicuously state all applicable “qualifications.”

Disclosure of Limited Availability of Financial Rates and Cost to Consumer

When advertising a financing rate, the fact that a rate is limited to particular models or model year vehicles or is available only during a particular period of time must be clearly and conspicuously disclosed. If a consumer must incur any additional expense — such as purchasing additional options or services or paying a higher price for the vehicle, options, or services purchased — to obtain the advertised financing rate, that restriction and the amount of the additional expense must be clearly and conspicuously disclosed. Such disclosure also must be made for any other condition, qualification, or limitation that affects the availability of such rate.

Periodic Payments

Periodic payments must be advertised as monthly or per month.

Write Your Own Deal

A dealer may not use advertising that creates the false impression that the purchaser will determine the terms, price, or conditions of a sale, such as “write your own deal,” “name your own price,” “name your own monthly payments,” “appraise your own car,” or statements with similar meaning.

Regulation Z and Regulation M

All dealer advertisements must comply with Regulation Z (Truth in Lending Act) and Regulation M (consumer leases).

Prizes

General.  It is unfair or deceptive for a dealer to notify a prospective consumer that the consumer has won a prize if that is not the case.

Conditions.  It is unfair and deceptive for a dealer to notify a consumer or prospective consumer that the consumer has won a prize or item of value without disclosing clearly and conspicuously all material terms and conditions necessary to win the prize, including (but not limited to) the market value of all prizes, the number of each prize that will be given at each location, the odds of winning each prize, how a list of winners may be obtained, what personal information must be given in order to be considered for a prize and, if the supplier intends to share or sell that personal information, how the consumer can opt out of sharing their personal identification information.

Obligations of consumer.  It is deceptive for a dealer to notify a consumer or prospective consumer that the consumer has been selected or is eligible to win a prize or item of value if the receipt of the prize is conditioned on the consumer listening to or attending a promotional offer or event, unless the requirement is clearly and conspicuously disclosed. The dealer also must disclose the market value of the prize and any necessary consumer expense.

Fees.  It is deceptive to notify a consumer or prospective consumer that the consumer has won a prize or item of value if the receipt of the prize is conditioned on the payment of a fee, including service charge, handling charge, mailing charge, or similar charge.

Additional information on Ohio’s automobile advertising laws can be found here: the Ohio Revised Code § 1345 et seq., the Ohio Administrative Code §§ 109:4-3-16, 109:4-3 et seq., and the Ohio Attorney General’s Guidelines for Vehicle Advertising.

* Adam Steele contributed to this post.