Watch Out For Those Deceptive Auto Ads: Att’y General
By N.Y. State Attorney General Eliot Spitzer
Are you skeptical of a car dealer’s sales pitch? Do you look under the hood and kick the tires before you buy? Do you comparison shop?
Most people do these things and think they are protecting themselves when buying a new or used car. But each year, thousands of consumers in New York make car deals they later come to regret. All too frequently, deceptive auto ads are to blame.
My office recently completed a statewide investigation of automobile advertising. We found dozens of cases in which car dealers’ newspaper, television, radio and Internet ads provided false, misleading information or failed to provide enough information in a format that consumers could understand.
Nearly 50 auto dealers have settled charges arising from the investigation and agreed to change their advertising practices. A handful of dealers have refused the reforms, however, and now may face lawsuits by my office.
While I believe that advertising practices have improved as a result of the investigation, consumers must still be careful when it comes to auto ads. Here are some typical examples of misleading advertising, and some steps that savvy consumers can take to avoid making a bad deal:
•Don’t be misled by "discount" prices. For example, discounts off the dealer’s "list price" may be phony. Ask for the Manufacturers Suggested Retail Price (MSRP) for new cars. For used cars, consult the Kelley Blue Book (www.kbb.com) or the National Automobile Dealers Association (www.nadaguides. com);
•Be cautious of extremely low interest rates often advertised by dealers. The bargain financing rate is often available only on certain models or certain individual cars the dealership is trying to sell quickly. Don’t assume you will get the advertised interest rate on every vehicle;
•Be very skeptical of promotions that say "Push, Pull, Drag It In for a Guaranteed Trade of $3,000!" Such ads may falsely imply that a dealer will pay money for a trade-in regardless of its actual worth. Dealers sometimes raise the prices of the cars prior to this promotion so that consumers receive no bargain at all;
•Ads claiming to sell vehicles "under invoice" or "under wholesale" imply that consumers can pay less for a vehicle than the dealership did. Due to various sales incentives offered by car manufacturers, these invoice prices do not generally reflect the ultimate price the dealers will pay and should not be relied upon as a basis for negotiations;
•"Public Liquidation Sales" may falsely imply that the sale is court-ordered or that the auto dealer is going out of business when that is not the case. Consumers should be aware that such sales may not provide the great bargains that its advertisements imply;
•Forget about ads that say that for a small acquisition fee, you can take over payments on a used car. Nobody assumes the previous owners payment schedule. Each sale is an entirely new transaction providing a separate sales price;
•Watch out for ads that say "Bad Credit/No Credit - No Problem." These deals falsely imply that everyone - even those with damaged credit records - can get financing. Furthermore, the deals offered often saddle troubled consumers with even greater financial obligations and problems.
•Be sure you know about all of the fees and charges associated with leasing a car. Many car lease ads often promote a low monthly payment, but fail to disclose other significant costs.
•Read every auto ad or promotion very carefully. Dealers sometimes use footnotes and extremely small print to disclose important information that alters, limits, and at times, contradicts claims made in bold, large print.
•Finally, don’t be afraid to ask tough questions when buying a car. Most car dealers are responsible business owners who care about their customers and the community. They will understand your need to question them, and they should be forthcoming with answers.
Consumers who believe they have been misled by an auto dealer’s ads or claims can contact my office at (800) 771-7755.