Administering the Laws and Regulations to the Motor Vehicle Dealers of the Commonwealth of Virginia

For purposes of this chapter, a violation of the following regulated advertising practices shall be an unfair, deceptive, or misleading act or practice.

A. New motor vehicle. A motor vehicle shall not be advertised as new, either by word or implication, unless it is one which conforms to the definition of a “new motor vehicle” as defined in 24VAC22-30-20.

B. Used motor vehicle.

1. The fact that a motor vehicle is used should be clearly and unequivocally expressed by the term “used” or by such other term as is commonly understood to mean that the vehicle is used. For example, “special purchase” or “program cars” by itself is not a satisfactory disclosure; however, such terms as “pre-owned” or “former leased and/or rental vehicles” used alone clearly express that they meet the definition of a used vehicle for advertising purposes. When in doubt, the dealer should provide more information or simply say “used.”

2. Once a certificate of origin as defined in § 46.2-1500 has been assigned to a purchaser, the motor vehicle becomes a used vehicle and must be advertised as such.

C. Finance charges or interest rates advertisements. Advertisements of finance charges or other interest rates “below market” (or words to that effect) shall not be used unless it is manufacturer or distributor sponsored or substantiated by a written agreement with the finance source.

D. Terms, conditions, and disclaimers.

1. When terms, conditions or disclaimers are used, they shall always be stated clearly and conspicuously. An asterisk or other reference symbol may be used to point to a disclaimer or other information; but, the disclaimer shall not be used as a means of contradicting or changing the meaning of an advertised statement. In addition, they must meet the Federal Trade Commission Truth in Lending Act Requirements 15 USC §§ 1601 et seq., 12 CFR Part 226 (Regulation Z) or the Federal Trade Commission Truth in Leasing Act Requirements, as applicable.

2. In all printed media, where terms, conditions or disclaimers are used, they shall be clearly and conspicuously visible and printed in not less than 8-point type print or printed in 6-point upper case type print. If freight charges or destination charges, or both, are not included in the advertised price, the amount of any such freight charge or destination charge, or both, must be clearly and conspicuously disclosed in boldface type that is not smaller than 8-point, unless the advertisement is in less than 8-point type in which case not smaller than the largest typeface within the advertisement. If a processing fee is not included in the advertised price, the amount of the processing fee must be clearly and conspicuously disclosed in not less than 8-point boldface type or not smaller than the largest typeface within the advertisement; however the amount of the processing fee may be omitted from any advertisement in which the largest type size is less than 8-point typeface, so long as the dealer participates in a media-provided listing of processing fees and the dealer’s advertisement includes an asterisk or other such notation to refer the reader to the listing of the fees. When billboards, portable signs, posters, etc., are used, all terms, conditions or disclaimers need to be displayed and phrased in a manner which is clear and conspicuous.

3. In radio advertisements all terms, conditions, disclaimers, and required disclosures must be clearly announced during the advertisement. They must be explained clearly and at an understandable speed and volume level.

4. In television advertisements all terms, conditions, disclaimers, and required disclosures must be clearly and conspicuously displayed or announced, or both, during the advertisement. They shall be at an understandable speed or understandable volume level, or both.

5. In Internet advertisements all terms, conditions, disclaimers, and required disclosures must be clearly and conspicuously displayed.

E. Sale or sales. The expiration date of an advertised “sale” shall be clearly and conspicuously disclosed. If the sale exceeds 30 days, the advertiser should be prepared to substantiate that the offering is indeed a valid reduction and has not become his regular price.

F. “List price,” “sticker price,” “suggested retail price.” These terms and similar terms shall be used only as follows:

1. In reference to the manufacturer’s or distributor’s suggested retail price for new vehicles; or

2. The dealer’s own usual and customary price for used vehicles.

G. “Cost” and “invoice price” terms.

1. “At cost,” “below cost,” “$ off cost” shall not be used in advertisements because of the difficulty in determining a dealer’s actual net cost at the time of sale.

2. “Invoice price,” “$ over invoice,” may be used, provided that the invoice referred to is the manufacturer’s factory invoice, distributor’s invoice, or a bona fide bill of sale, as applicable, and that it is available for customer inspection.

H. Price or credit terms of advertised vehicles. When the price or credit terms of a vehicle are advertised, the vehicle should be fully identified as to year, make, and model. In addition, in all advertisements placed by individual dealers and not marketing groups, the advertised price or credit terms shall include all charges which the buyer must pay to the seller including “freight” or “destination charges.” If there are deferred payments on credit sales where accrued finance charges are ultimately charged to the consumer for any part of the deferred period, then these charges must be clearly stated. State and local fees and taxes and buyer-selected options need not be included in the advertised price. If the buyer will be required to pay to the seller charges which increase the advertised price, the charges must be disclosed as set-out in subsection D of this section and priced in the advertisement.

I. Matching or bettering competitor’s price advertisements. Advertisements that set out a policy matching or bettering a competitor’s price shall not be used unless the terms of the offer are specific, verifiable, and reasonable. All terms of the offer shall be included in the disclosure and disclaimer area and may not say such things as “rules or terms available in showroom” or “available before delivery.” Any material or significant conditions that must be met or the evidence the consumer must present to take advantage of the offer must be fully disclosed as a part of the advertisement.

J. Advertisements of dealer rebates shall not be used. Offers to match down payments or guarantee minimum trade-in allowances or offers of cash or money back are forms of dealer rebates.

K. “Free,” “at no extra cost” terms. No equipment, accessory, other merchandise or service shall be described using any term that implies that such equipment, accessory, other merchandise or service is free if a purchase is required in order to receive the “free” offer. Examples of prohibited terms include:

1. Free.

2. Complimentary.

3. At no extra cost.

4. At no extra charge.

5. At no extra fee.

6. At no extra price.

7. At no additional cost.

8. At no additional charge.

9. At no additional fee.

10. At no additional price.

11. Present.

12. Gift.

13. On the house.

14. Gratis.

15. Courtesy.

L. “Bait advertising” shall not be used.

1. The purpose of this section is to ensure that customers will be informed the vehicle is in limited quantity or availability. If a specific vehicle is advertised, the seller shall be in possession of a reasonable supply of said vehicles and they shall be available at the advertised price. If the advertised vehicle is available only in limited numbers or only by order, that shall be stated in the advertisement. The listing of vehicles by stock numbers or vehicle identification numbers is permissible and is one means of satisfactorily disclosing a limitation of availability, provided a separate number is used for each vehicle. For new vehicles, if the offer is limited, the dealer will be able to say such things as “in stock” or “will order” provided the dealer can order the vehicle just as advertised and delivery can be assured as soon as the manufacturer or distributor can confirm the order and deliver it to the dealer’s dealership. If the dealer cannot get an order confirmation within 30 days, the dealer must refund all moneys collected from the buyer at his request. If the vehicle is available only by order then it must be clearly and conspicuously disclosed in the advertisement.

2. Advertising a vehicle at a certain price (including “as low as” statements), but having available for sale only vehicles equipped with dealer added cost “options” which increase the selling price above the advertised price, may also be considered “bait advertising.”

3. If a lease payment is advertised, the fact that it is a lease arrangement shall be disclosed.

M. The term “repossessed vehicle” shall not be used unless the full criteria of the definition in 24VAC22-30-20 is met. Advertisers offering such vehicles for sale shall provide proof of repossession upon request.

N. “Finance” or “loan.” Words such as “finance” or “loan” shall not be used in a motor vehicle dealer advertiser’s firm name or trade name unless that person is actually engaged in the financing of motor vehicles.

O. “Special arrangement or relationship” advertisements. Statements such as “big volume buying power,” “manufacturer’s outlet,” “factory authorized outlet,” and “factory wholesale outlet,” shall not be used. Any term that gives the consumer the impression the dealer has a special arrangement with the manufacturer or distributor as compared to similarly situated dealers, is misleading and shall not be used.

P. Records retention. Licensees shall maintain for a period of 60 days from the expiration date of the advertisement and make available to the board and the board staff, if requested, copies of all radio and television advertisements.