The Best Car Deals and Why You Can't Get Them

NEW YORK (MainStreet) — The TV ads featuring the clamorous car dealer with his dog "Spot" (the guy in a gorilla suit) can't hold a candle to the best car deals ever advertised. A resurgent economy and stiff competition is motivating car dealers to pull out all the stops.

For example, Infiniti of Clarendon Hills, Ill., Honda of Hollywood and Norm Reeves Honda of Cerritos, Calif., have all advertised $0 up-front leases on new vehicles. And Fowlerville Ford in Michigan has offered spectacular sweepstakes prizes to residents of the area in an effort to boost showroom traffic.

The only problem with these amazing offers is the fact that they are all about as authentic as the "rich Corinthian leather" featured in a '75 Cordoba. According to the Federal Trade Commission, the zero down lease advertising neglected to mention substantial fees and other amounts due. And as for the sweepstakes prizes – there were none.

The FTC's 'Operation Steer Clear' is an effort to protect consumers by focusing enforcement on the sale, financing and leasing of motor vehicles.

Nine dealer groups across the nation have agreed to settle FTC complaints claiming the dealers made a variety of misrepresentations in print, on the Internet and in video advertisements that violated the FTC Act, falsely leading consumers to believe they could purchase vehicles for low prices, finance vehicles with low monthly payments, and/or make no upfront payment to lease vehicles. A tenth dealer complaint is pending action.

"Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "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."

One dealer ad featured a Chevy Tahoe for sale at a remarkably low $17,995, the price of course appearing in giant print. One important detail was noted in tiny print at the bottom of the ad: the advertised price was after a $5,000 down payment.

Other deceptive ad practices the dealers employed, as noted in the FTC complaints, included:

  • Ads involving a mix of English and Spanish
  • Dozens of vehicles featured with photos and highlighted low prices – which are achievable only after large down payments, disclosed in the fine print at the bottom of the ad.
  • Low monthly payments that are temporary "teasers," after which consumers would owe a different, much higher amount.
  • Ads featuring finance rates with low monthly notes, when in reality buyers would owe a final balloon payment (over $10,000).
  • Ads that failed to disclose complete credit terms.

The proposed consent orders settling the FTC's charges in the nine cases are designed to prevent the dealerships from engaging in similar deceptive advertising practices in the future.

The orders prohibit the dealerships from misrepresenting in any advertisement for the purchase, financing or leasing of motor vehicles the cost of leasing a vehicle, the cost of purchasing a vehicle with financing or any other material fact about the price, sale, financing or leasing of a vehicle.

In the case where the dealerships misrepresented that consumers had won a prize, the proposed order also prohibits misrepresenting material terms of any prize, sweepstakes, giveaway or other incentive.

—Written by Hal M. Bundrick for MainStreet

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