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BURNING DOWN THE HOUSE
The response to last week's Talking Heads "Life During Wartime" analogy regarding the FTC's new guidance on the advertised price of a vehicle was overwhelmingly positive so I returned to that theme this week. Unfortunately, I'm encountering too many dealers who are either resisting or are outright rejecting the FTC's guidance on advertising the total sale price, hence my choosing this week's Tip title.
One phrase from the song says:
Hold tight
Wait 'til the party's over
Hold tight
We're in for nasty weather
There has got to be a way
Burning down the house
My message for dealers looking to circumvent the FTC's guidance is We're in for Nasty Weather. The FTC has made it clear that it is serious. Dealers pushing back with "There has got to be a way" are in for disappointment and are taking a big risk.
Some dealers insist that they are too small to ever have an issue. Others are clinging to the notion that if they continue to use an asterisk with a disclosure of the document fee and other mandatory charges in close proximity to the total price, it will be "close" enough to satisfy the FTC. Many take comfort in the false logic that other dealers' violations will be more egregious.
One dealer even argued that since his store does both Buy Here Pay Here (BHPH) and third-party finance deals, he can't adhere to the guidance on advertising the price because that would mean eliminating the "lender financing fee" charged by his third party finance source. It was tacitly admitted that his buyers already pay different prices depending on the financing source, which presents a significant legal problem. To make things worse, the state in question doesn't even allow a "lender's fee".
For those who don't want their house to burn down, examine all advertising, website and social media content to ensure advertised pricing aligns with your practices. Call us if you have questions about this subject. We will help you navigate the variables involved and create a solution that is right for your business.
Don't wait until after your house is burning to do it the right way.
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