April 23, 2026
By Barrie Charapp Beaty
Charapp & Weiss, LLP
bbeaty@cwattorneys.com
Dealers learned from the horse’s mouth that advertising, as they had known it, has officially changed. On Friday, April 17, 2026, the Federal Trade Commission participated in a webinar with the NADA regarding the 97 dealerships warning letters about advertising and sales practices. Straight from the horse’s mouth, the FTC confirmed our guidance from last month on advertising.
Although there are still many lingering questions that will have to be flushed out, especially regarding push downs from manufacturers and in-transits, the FTC did confirm the following:
Total Price must be the Most Prominent Advertised Price and it must include your Processing Fee.
- The most prominent total price advertised must include all fees but government fees and be available to everyone.
- The most prominent advertised price needs to be the ceiling not the floor. Dealers can always discount the most prominent advertised price but the consumer should not be paying more than the most prominent advertised price.
- The FTC has spoken and processing fees/charges need to be in the advertised price.
- The FTC views processing fees as authorized by the state but not required, thus need to be in the total price advertised.
- As such, it is irrelevant how your state allows processing fees to be advertised (i.e., Virginia allows processing fees in the disclaimer).
- The FTC said that the FTC Act regulating advertising trumps state law on advertising processing fees.
- Freight is not a governmental fee and needs to be in the advertised price.
- Rebates that are conditional and not available to everyone can be advertised with a disclosure but they cannot be subtracted from the most prominent total price advertised.
- MSRP can be advertised, but the processing fee should be included so that the dealer has a total price. If only MSRP is advertised, the FTC will view this as a ceiling rather than a floor. The FTC clarified to dealers that if you list MSRP as the vehicle’s price that you either (i) sell at MSRP, and thus are not able to charge the processing fee, or (ii) advertise the vehicle correctly with a total price that includes the MSRP plus the processing fee.
- The total price should match all websites and mediums in which the dealer advertises (i.e., third party sites should not differ from your dealership’s website).
- For dealer installed add-ons prior to sale such as roof racks (i.e. hard adds), the advertised price needs to reflect those add-ons so that the consumer is not deceived into additions to the advertised price. If there are voluntary add-on packages that the consumer may purchase at point-of sale, they can be advertised but should be disclosed as “optional” and not be a required purchase by the consumer to get the price advertised. The consumer must truly understand that the add-on is optional if its not in the vehicle’s total price. Although the FTC did not go into details as to how the dealer can ensure that the consumer understands that the product is optional, the dealer should use proper sales practices such as having a menu of separate optional products. The FTC uses the “reasonable consumer standard” when evaluating sales practices and advertisements. Dealers take a risk by adding certain products to the vehicle prior to the consumer even entering the dealership such as paint protection and etch. A rogue salesperson could claim that since they are on the vehicle, they are added and should be purchased. The best practice for add-ons would be to have a separate document or menu with optional point-of-sale items, similar to your finance menu, where the consumer can choose those items that they wish to purchase rather than putting them on the car first and then claiming they are optional.
Lease Advertising should include the fees
- When advertising lease amounts, the due at signing amount should be advertised to include the processing fee as well as acquisition fee.
In-transit vehicles
- Unfortunately, the FTC views this as a fact-specific situation.
- For an In-Transit Vehicle the advertisement must clearly convey to the customer that the vehicle is not on the dealership property.
- The FTC offered guidance that to err on the side of caution, only vehicles that are in-transit for a few days should be advertised. We understand that this is an issue with many manufacturers because the manufacturers push the in-transits to the dealer’s website when the vehicles are allocated to the dealer during building process.
- This subject is one that needs further clarification by NADA or the FAQs issued by the FTC.
Who has control of the advertisement?
- FTC views the responsibility related to advertising as “If you control what’s in the ad, you are responsible for it"
- Control of the content is a threshold question.
- However, like in-transits, this subject is one that needs further clarification by NADA or the FAQs issued by the FTC.
- This subject left open some real questions regarding third parties and manufacturers.
- Third party vendors control various aspects such as the design, limitations on what the dealers can put on the page, as well as how fast the content changes (i.e., dealers may change the price in VAuto but it doesn’t upload to the 3rd party site until the next day).
- Manufacturers push rebates and incentives into the dealer’s webpage that often discount the total price. If manufacturers are pushing rebates into the total price, who is really in control of the price? The manufacturer or the dealer? For example, GM’s customer cash, which is available to everyone but changes the total price of the vehicle if the customer chooses the special financing rather than the customer cash a point-of-sale. Under the FTC’s view, this would be an improper incentive baked into the total price because it is conditional on the consumer choosing one option over the other. Manufacturers rather than dealers should be responsible, but the consumers will be the ones filing complaints against the dealers for such actions. Like the FTC, the consumers will not understand who is pushing what onto a dealer’s website. As such, the manufacturers will need to cease such actions because of the liability that it will cause the dealers.
What are the next steps for dealers?
- If you are a dealer who has not changed your advertising to total price that includes your processing fee, its time to do so. Total price advertising should be your first step.
- Your disclosures and disclaimers should be changed. Disclosures for any conditional rebates should be accurate but not included in the total price.
- Get any add-ons that are not optional into the advertised price
- Make sure any add-ons that are optional are clearly optional to the consumer and sold as optional products.
- Train your employees on proper advertising and sales practices.
- There should be additional information produced by NADA and/or the FTC regarding some of the complex nuances related to in-transits and manufacturer roles in advertising. The webinar left room for many questions on those topics.
- Please seek counsel from your attorney on specific advertising questions.
- For all the information that VADA has provided on this issue, please visit our website here.