Last month, the FTC published frequently asked questions addressing automobile pricing transparency under the Federal Trade Commission Act. The guidance reiterates that advertised vehicle prices must reflect the actual amount consumers can pay to purchase a vehicle, excluding only government-required charges. The FAQs clarify how existing requirements apply to vehicle advertisements, mandatory fees, discounts, and other pricing practices.
The FTC emphasized that the guidance reflects existing legal obligations rather than new regulatory requirements. The FAQs address several advertising and pricing practices that may raise compliance concerns. Specifically, the guidance:
- Clarifies advertised price requirements. Dealers must include all mandatory fees in advertised vehicle prices, including document and processing fees, even when those fees are authorized but not required by state law.
- Addresses discounts and rebates. Advertised prices must reflect amounts available to all consumers, rather than discounts limited to certain purchasers. Dealers may advertise conditional incentives provided the actual price remains the most prominent amount.
- Establishes expectations for online advertisements. Dealership websites, inventory listings, and other advertisements displaying vehicle prices must prominently disclose the actual price consumers can pay. These expectations also extend to third-party advertisers and manufacturers responsible for advertising content.
- Clarifies optional add-on practices. Dealers may offer additional products and services but cannot misrepresent optional products as mandatory, misstate their costs, or charge consumers for products they did not agree to purchase.
- Addresses vehicle availability and leasing advertisements. Dealers advertising vehicles in transit or located offsite must accurately disclose their availability. Leasing advertisements stating the total amount due upfront must include applicable processing fees.
The FTC also emphasized that determining whether an advertisement is deceptive depends on its overall impression and the circumstances of the advertisement. The FAQs represent nonbinding FTC staff guidance.
Putting It Into Practice: The guidance builds on the FTC's recent focus on automobile pricing transparency, including its March 2026 warning letters to 97 dealership groups (previously discussed here). The FTC continues to rely on its existing authority under the FTC Act to address vehicle pricing practices. Automobile dealers and third-party advertisers should review advertising materials, mandatory fees, conditional discounts, and vehicle availability disclosures to ensure consistency with the guidance and monitor further FTC enforcement developments.