On March 13, 2026, the Federal Trade Commission (FTC) sent letters to 97 auto groups across the U.S. that it claimed were engaging in potentially deceptive price advertising. The FTC’s warning gave several examples of illegal pricing practices, including:
-
Advertising a price that does not reflect all required fees
-
Advertising a price that reflects rebates or discounts not available to all consumers
-
Advertising a price that doesn't account for an additional required down payment
-
Conditioning an advertised price on consumers using dealer financing
-
Requiring consumers to buy additional items not reflected in the advertised price
-
Advertising unavailable or non-existent vehicles
Many dealers scrambled to change their advertising and pricing practices in response to the FTC’s announcement. Unfortunately, the FTC didn’t provide specific guidance on how to comply with their mandate, resulting in numerous questions. In response to that uncertainty, the FTC released an FAQ on September 15. While the FAQ doesn’t answer every question, it answers many and gives a clear understanding of how seriously the FTC is taking price transparency.
Key takeaways from the FAQ
1) The price a consumer sees in an ad must be the price they can walk in and pay. The FTC has zero tolerance for deceptive pricing practices.
2) The actual price a consumer will pay must be the most prominently displayed price in an advertisement. Dealers can still reference MSRP and various discounts, but the consumer must be able to clearly identify the price they will pay for the vehicle.
3) Advertisements can still feature discounts that are not available to all consumers. Many dealerships want to educate the public about various discounts and rebates that only apply to certain categories of consumers, such as First Responders and Educators. The good news is that the FTC has not prohibited these from being mentioned in advertisements. However, dealers need to make sure that any advertised price is one all consumers can pay, even if the advertisement also references discounts that are available only to certain groups.
4) The FTC says that doc fees must be included in the advertised price, even if state law says otherwise. If that creates a conflict for you, it is highly recommended that you consult an attorney to determine how your ads will look moving forward.
5) Discounting is always okay. You just can’t charge MORE than the advertised price. Dealers and consumers are free to negotiate, just as in the past.
6) Pay attention to where you are advertising your vehicles – and make sure every placement is compliant, whether that’s your website, a newspaper, a third-party site, or elsewhere.
Most of these takeaways were not a surprise to dealers. However, the FAQ addressed some potentially unexpected items, such as:
-
Government fees that are assessed to the dealer must be included in the advertised price. Many dealers thought that ANY government fee could be excluded from an advertised price. The FTC has drawn a distinction between government fees charged to the dealer and then passed on to the customer, and government fees charged directly to the consumer.
-
Dealers who advertise vehicles that are on their way from the manufacturer or otherwise not physically on the lot at the time the advertisement is released should ensure that the advertisement clearly discloses that fact. Fortunately, dealers can continue to advertise vehicles that are not currently on their lot, but the consumer should have no question that the vehicle is elsewhere when they see the advertisement.
-
Dealers must make it clear that a representative photo is not the actual vehicle being advertised. Many dealers use stock photos to advertise their inventory. This is much more efficient and allows dealers to post vehicles on their website more quickly. This practice is not prohibited, but disclosures are required. Dealers using representative photos for their used car inventory should take a hard look at this practice. The FTC said that used cars are rarely identical as they often differ in condition, and it is reasonable for consumers to expect the photo to show the exact car offered for sale.
Where do dealers go from here?
1) Talk with an attorney and review all your advertising practices with them. A few thousand dollars spent on an attorney is much cheaper than an FTC penalty that could reach millions of dollars.
2) Conduct an audit that identifies:
-
All of the places you advertise
-
Whether all the advertisements comply with FTC guidance
-
Policies for using representative photos
-
A timeline for regular review of advertising
While some questions may remain, the recent FAQ goes a long way toward helping dealerships comply with the FTC’s expectations. Perhaps the biggest takeaway from the FAQ is that the FTC has made it abundantly clear that this issue is at the forefront of the agency’s enforcement agenda. Dealerships need to take this matter seriously, because the FTC clearly does.
One of the ways dealers can help protect their business in today's compliance landscape is by using quality F&I documents written and designed to be transparent and easily understood by customers. Don't question if your documents are up to the task — take advantage of a free F&I Document Review and know the answer.