Key Points

• The FTC issued warning letters to auto dealerships over potentially deceptive vehicle advertising practices under Section 5 of the FTC Act.
• Advertised vehicle prices must reflect what consumers can realistically expect to pay, excluding only government-imposed charges (taxes, title, registration).
• Practices at issue include omitting mandatory fees, conditioning prices on financing or down payments, bundling undisclosed add-ons, and advertising unavailable vehicles.
• Dealerships should review advertising policies, employee training, and compliance procedures with legal counsel to mitigate enforcement risk.

An Enforcement Priority

The Federal Trade Commission (FTC) recently issued warning letters to approximately 100 automobile dealerships nationwide regarding potential concerns with vehicle advertising practices.

The FTC has not publicly identified the dealerships that received the letters, and the agency emphasized that the correspondence does not represent a formal determination that any dealership violated the law. Nonetheless, the letters serve as a clear signal that dealership advertising practices remain an enforcement priority for the agency.

Continued Focus on Dealership Advertising

The action follows comments made by FTC Chairman Andrew Ferguson at the 2025 NADA Washington Conference, where he indicated that the agency intends to continue pursuing enforcement activity involving dealership advertising.

The latest letters reinforce the importance of maintaining clear, accurate, and transparent pricing disclosures in vehicle advertisements and marketing materials.

FTC Concerns Regarding Advertised Pricing

According to the FTC, certain advertising practices may violate Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices.

In particular, the FTC emphasized that the price a dealership advertises should reflect the price consumers can realistically expect to pay, excluding only mandatory government charges such as taxes, title, and registration fees.

The agency highlighted several types of advertising practices that could raise compliance concerns, including:

• Advertising vehicle prices that omit mandatory dealer fees
• Promoting prices that include rebates or incentives not available to most consumers
• Advertising pricing that depends on an additional required down payment
• Advertising prices that only apply if a consumer uses dealer-arranged financing
• Requiring the purchase of add-on products or services not included in the advertised price
• Advertising vehicles that are not actually available for sale

Next Steps for Dealers

Dealerships that receive one of these letters should carefully assess their current advertising practices. This review should include consultation with legal counsel familiar with federal, state and local vehicle advertising regulations, as well as coordination with dealership leadership responsible for sales, marketing, and compliance.

The goal should be to evaluate whether updates to advertising policies, employee training, or internal oversight procedures are appropriate.

Key Takeaway 

The FTC’s communication underscores a central point: vehicle advertisements should accurately reflect the price customers will ultimately pay, apart from government-imposed charges.

Dealerships should continue monitoring regulatory developments and reviewing their advertising procedures to ensure pricing representations remain compliant with applicable consumer protection laws.

For more information, contact Seth L. Dobbs at sdobbs@foxrothschild.com or any member of Fox Rothschild’s Automotive Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.