Dealership Compliance: Power of Advertising & Deal Jacket Audits

Staying compliant with advertising and sales regulations is crucial for an auto dealer to avoid hefty fines and maintain customer trust. This article will explore Step 6 of our 10-step compliance process: Advertising & Deal Jacket Review. This critical step helps ensure your dealership’s pricing and documentation are consistent and in line with regulations across all channels.

To effectively implement this step, dealers should focus on four key areas, forming a comprehensive review process. Let’s dive into these components and explore how they contribute to maintaining compliance and reducing risk at your dealership.

Facility Assessments and Walkthroughs

Regular facility assessments are essential for identifying potential compliance issues. Key areas to focus on include:

Proper display of Monroney stickers on new vehicles
Correct placement and completion of FTC (Federal Trade Commission) Buyers Guides on used vehicles
Appropriate signage throughout the dealership

While conducting a facility assessment, it is also wise to inspect key fob control procedures to prevent losses and to review how your dealership tracks and protects other important items, such as dealer plates and temporary tags.

Window Sticker and Website Price Alignment

One of the most crucial aspects of advertising compliance is ensuring that your vehicle prices are consistent across all platforms. This builds trust with your customers and keeps regulators at bay. Areas to review:

Comparing window sticker prices to website listings
Updating both window stickers and online listings when prices change
Disclosing any discrepancies between advertised prices to consumers

Remember, in many states, you must inform customers about the best-advertised price for a vehicle. Consistency in pricing helps avoid violations of Regulation M, Regulation Z (Truth in Lending), and potentially the Vehicle Shopping Rule.

Deal Jacket Audit

Regular deal jacket reviews are vital for maintaining compliance and identifying areas for improvement in your vehicle transactions. When conducting these audits, focus on:

Identifying missing forms or incomplete documents
Verifying proper disclosures
Checking for improper fees
Confirming that add-ons are purchased with express, informed consent
Comparing practices across F&I managers to identify training opportunities

Tracking Advertised vs. Transactional Prices

With increased scrutiny from regulators, particularly around the Vehicle Shopping Rule, it’s crucial to implement a system that tracks advertised prices against actual transaction prices. This helps prevent:

Deviations from advertised prices
Potential penalties from regulators like the FTC or state attorneys general
Legal issues arising from discrepancies between advertised and final prices

Remember, regulators are actively pursuing cases where the transaction price exceeds the advertised price, sometimes resulting in multi-million dollar fines for dealerships.

While companies place a substantial focus on EHS management (and with good reason), crossing the line in F&I can do substantial damage to your dealership's reputation, plus fines starting at $10,000, and the potential for criminal charges.

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Implementing a robust dealership Advertising & Deal Jacket Review process can significantly reduce your dealership’s compliance risks.

This step helps ensure consistency in pricing across all platforms, maintains accurate documentation, and protects your business from potential regulatory actions. Stay tuned for our next article, where we’ll discuss Step 7 in our 10-step compliance process for auto dealers.

KPA helps dealerships limit liability from the first contact to deal close.

With our complete compliance system and a team of advertising, sales, and finance compliance experts to guide you, protect your dealership, save money, and recapture countless hours of wasted time.

This structured approach ensures that dealerships are compliant and continually improve their compliance practices, leading to safer, more trustworthy operations.

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Next week let’s look at dealer Consumer Complaint Management.

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Bulletproof Your Dealership: The Power of Advertising & Deal Jacket Reviews