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State Advertising Laws and Regulations Almost all states have laws specifically prohibiting misleading advertising. The state standards summarized in this section are for example purposes only. This section does not provide a comprehensive review of all state laws regulating advertising. An example of a relevant regulatory scheme is Florida, which prohibits any statement known or which could have been ascertained to be untrue or misleading and which was made with the intent or purpose of selling goods or services. Mississippi lists a series of phrases that are deemed to be untrue including “everybody financed,”“no credit rejected,”“name your own monthly payments,” and a statement that no other dealer gives a greater allowance for trade-ins. A number of state laws give consumers a right to sue for misleading advertising and specifically provides that a consumer can recover attorney’s fees and punitive damages. Other states specifically prohibit using any unexplained abbreviations in dealer advertising that are not commonly understood and lists FTB, A/R, TOP, POF, and DOC as examples. The advertising requirements for dealers are different in each state. The Attorney General and state Motor Vehicle Department websites are two good resources to find rules and regulations concerning what activities are permissible and impermissible for auto dealer advertising. Attorney General websites usually publicize enforcement actions brought against auto dealers for deceptive trade practices, including deceptive advertising. Many State Attorney General offices publish specific guidelines for auto dealer advertising in that state as well. For example, many states prohibit a dealer from selling a vehicle at a price higher than an advertised price even if the consumer has not seen the advertisement. In some states, this rule will not apply if the advertisement provides clearly and conspicuously that the consumer must bring in or at least mention the advertisement to get the advertised price. A number of states also have laws governing advertising of rebates. There are states that require a disclaimer that dealer participation may affect consumer cost when a dealer must contribute to the cost of an incentive in order to participate in a manufacturer or distributor incentive. You should check all your advertising against your state guidelines as well as the FTC’s rules and guidelines. In the present environment of aggressive enforcement, it is a best practice to have your local attorney review all advertising. FTC Used Car Rule The FTC Used Car Rule, which was amended in 2016 (the “Rule”), requires auto dealers to prominently post a “Buyer’s Guide” in plain view on all used vehicles before they are offered for sale. The Rule defines a “used car” as any car that has been driven more than necessary to move it or for road testing prior to delivery to a consumer. This would include many “demo” models used for customer test drives. The Buyer’s Guide must disclose whether the vehicle is being sold“as is”or with a warranty. State law governs the legal requirements for disclaiming warranties and will determine whether a dealer must use the “As Is – No Dealer Warranty” or “Implied Warranties Only” version of the Buyer’s Guide. If the vehicle is sold with a written warranty, the Buyer’s Guide must state the general terms of the warranty, including whether it is full or limited; the duration of the coverage; the specific systems covered (engine, transmission, etc.); a list of parts or systems not covered if necessary for clarity (e.g., a battery); what percentage of repair costs the dealer will pay under the warranty; an explanation of how the customer gets warranty service; and whom to see about complaints. Important Laws and Regulations

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171 2020 MEMBERSHIP DIRECTORY & SERVICES GUIDE

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