FTC Warns Auto Dealers on Vehicle Price Advertising
Summary
The FTC sent warning letters to 97 auto dealership groups regarding deceptive vehicle price advertising practices. The agency stated that advertised prices must reflect the total cost to consumers, excluding only government charges, to comply with Section 5 of the FTC Act.
What changed
The Federal Trade Commission (FTC) issued warning letters on March 13, 2026, to 97 auto dealership groups, cautioning them against deceptive vehicle price advertising. The FTC's primary concern is that advertised prices do not reflect the total amount consumers will ultimately pay, excluding only mandatory government charges. Specific practices flagged as potentially unlawful include advertising prices that exclude mandatory fees, using discounts not available to all consumers, omitting required down payment information, conditioning prices on dealer financing without clear disclosure, requiring add-on products not included in the advertised price, and advertising unavailable vehicles.
Auto dealers and lead generators are advised to review their advertising and pricing disclosures to ensure compliance with the FTC's interpretation of Section 5 of the FTC Act. Failure to do so could result in further FTC action, as the agency continues to monitor market practices. This action aligns with the FTC's broader focus on pricing transparency and combating deceptive fees across various consumer markets.
What to do next
- Review all vehicle advertising and pricing practices for compliance with FTC guidance.
- Ensure advertised prices include all mandatory fees except government charges.
- Verify that discounts, rebates, and financing conditions are clearly and accurately disclosed.
Penalties
Potential for additional FTC action if practices do not change.
Source document (simplified)
March 27, 2026
FTC Warns Auto Dealership Groups on Vehicle Price Advertising
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On March 13, 2026, the FTC announced that it sent warning letters to 97 auto dealership groups stating that advertised vehicle prices must reflect the total price consumers will be required to pay, excluding only required government charges such as taxes. The letters emphasize that not doing so could be considered a deceptive pricing practice in violation of Section 5 of the FTC Act.
The warning letters state that the agency is concerned some dealerships may be advertising prices lower than what consumers actually pay at the end of the transaction. The FTC urged recipients to review their advertising and pricing practices, including by comparing advertised prices against actual consumer charges, and stated that it will continue monitoring the market and take additional action as warranted.
The letter identifies several pricing practices the FTC views as unlawful, including:
- Advertising prices that exclude mandatory fees. The FTC stated that advertised prices should include all required fees and charges, other than required government charges, so that consumers can accurately compare offers.
- Using discounts or rebates not available to all consumers. The letter warned against advertising prices based on incentives that not every buyer can actually obtain.
- Omitting required down payment information. The FTC stated that a dealership should not advertise a price that fails to account for an additional required down payment.
- Conditioning the advertised price on dealer financing. The agency warned that advertised pricing should not depend on a consumer using financing offered by the dealer unless that condition is clearly and lawfully reflected.
- Requiring add-on products not included in the advertised price. The letter cited mandatory add-ons and similar charges as another example of potentially deceptive pricing. Advertising unavailable or nonexistent vehicles. The FTC also warned against using vehicle listings that do not reflect actual inventory. Putting It Into Practice: The FTC’s letter fits within its broader focus on pricing transparency and allegedly deceptive fee practices across consumer markets (previously discussed here and here). Auto dealers and lead generators should review advertised pricing practices and fee disclosures in light of the FTC’s position.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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2026
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