Wheelin’ and dealin’! Authorities warn of deceptive auto advertising

Wheelin’ and dealin’! Authorities warn of deceptive auto advertising
deceptive auto ads

deceptive auto ads

We’ve all seen our share of local auto dealership ads promising low payments and great savings.

But how do we know what we’re hearing is really the truth?

In a nationwide sweep in January of 2014, the Federal Trade Commission alleged that 10 dealerships across the country used untruthful video, print and radio advertising — in regards to the sale, financing and leasing of motor vehicles — as a way to lure unsuspecting buyers.

"Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Dealers' ads need to spell out costs and other important terms customers can count on. If they don't, dealers can count on the FTC to take action."

The FTC may issue a consent order to prevent dealerships from using similar deceptive advertising in the future. Failure to abide by the order can result in fines.

Signs of deception

The FTC cited the dealerships for a number of reasons. For example, Nissan South Morrow of Morrow, Ga., allegedly violated the FTC Act by deceptively advertising that buyers could finance vehicles for low monthly payments. But, in truth, those low monthly payments turned out to be "teasers," and customers paid a higher amount at a later time, the FTC claims.

The FTC also accused Infiniti of Clarendon Hills in Illinois of advertising zero down leases. But buyers reportedly paid substantial fees and other amounts at signing.

The FTC says three Southwest Kia dealerships in Texas violated the FTC Act by advertising that consumers could purchase vehicles for low monthly payments without mentioning a final balloon payment of over $10,000.

Look for an honest dealership

Many highly rated auto dealerships did not return phone messages or emails when asked for an interview on deceptive advertising.

But Jocelyn Li, co-owner of highly rated TongDa Auto-Import Direct & TongDa Auto Body in Columbus, Ohio, says finding an honest dealership — one that works with your individual needs, offers a warranty and allows you to have the car inspected by your own mechanic, for example — can prevent purchase problems.

“We only know how to be honest; not dishonest,” says Li, who advertises primarily on the company’s website. “If something is too good to be true, then it’s probably too good to be true.”

Todd Reiselman, general manager of Ed Martin Automotive Group, which owns highly rated Ed Martin Acura in Indianapolis, claims most dealerships are reputable and are just trying to work with customers to sell them a car that fits their needs.

“It really comes down to that spider sense,” Reiselman says. “Ask questions and give the dealership a chance to sell you a car. Some people go into it with a chip on their shoulders because they’ve heard of stories.

“These dealerships (the FTC cited) are the extreme exception,” he adds.

Reiselman recommends finding a dealership that allows you accessibility to management and avoiding ones that ask you to fill out a credit application before test driving a car.

Deceptive advertising

Some common deceptions, according to the FTC, include:

• Leases with zero due at signing. In some cases, there are additional fees that can run into the thousands.

• Low monthly payments. In some cases, payments increase for the rest of the loan period or you may have to pay a large payment at the end of the lease. “If you see a $79 payment, look at the fine print to make sure it’s not asking for $5,000 and your first born,” Reiselman says.

• The “You're the big winner” ploy. This may just be a lure to get you to the dealership, the FTC claims.

To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).


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Buying a new car? Feds warn of deceptive auto ads

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Locate dealers that provide access to management, respect your individual needs, offer a warranty and allow you to have a car inspected by an independent mechanic before you buy. (Photo courtesy of Angie's List member Tracy L. of Charleston, S.C.)

If you're planning to purchase a new car, make sure you don't fall victim to deceptive auto advertising. Get tips on finding a high quality dealership.

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