The Federal Trade Commission (FTC) recently sent warning letters to 97 auto dealership groups across the United States, demanding that advertised vehicle prices reflect the total price consumers are actually required to pay.
The letters highlight several pricing practices the FTC considers deceptive under federal law, including advertising prices that exclude mandatory fees, requiring add-ons not disclosed in advertising, and conditioning prices on dealer financing.
For dealerships following regulatory developments closely, the message here is that price transparency remains a major enforcement priority for regulators.
And while the FTC’s proposed CARS Rule may not have taken effect, the agency’s latest action makes one thing clear: existing law already prohibits deceptive pricing practices.
The FTC’s Message: Advertised Price Must Reflect Reality
In its warning letters, the FTC identified several pricing practices that may violate consumer protection laws, including:
- Advertising a price that does not include all required fees
- Requiring consumers to purchase add-on products not reflected in the advertised price
- Advertising a price that fails to account for a required down payment
- Advertising prices that rely on rebates or discounts not available to all consumers
- Conditioning the advertised price on dealer financing
- Advertising vehicles that are not actually available
Each of these practices can create a gap between the price consumers see in marketing and the price they ultimately pay. From a compliance standpoint, that gap is exactly what regulators are focused on.
The FTC’s enforcement position has long been that advertising must be truthful, accurate, and not misleading, and that material terms (fees, conditions, and limitations) must be clearly disclosed.
Why This Matters (Even Without the CARS Rule)
Some dealerships may have assumed that because the FTC’s proposed CARS Rule was blocked in court, regulatory pressure around pricing transparency had eased – but that assumption is a mistake.
The FTC already has broad authority under Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices.” Advertising a vehicle price that consumers can’t obtain in reality can fall squarely within that framework.
In other words, the legal obligation to advertise prices accurately didn’t begin with the CARS Rule, and it did not end with it either. The FTC, state regulators, and private plaintiffs have all continued to pursue cases involving alleged deceptive pricing practices in the auto retail market.
The Advertising Practices Dealers Should Review Right Now
The FTC’s warning letters provide a useful opportunity for dealership leaders to review their own advertising and pricing practices. Areas worth examining include:
Hidden or undisclosed fees
Advertised vehicle prices should include all mandatory fees that consumers must pay to purchase the vehicle. If a required fee appears later in the process but was not reflected in the advertised price, regulators may view the initial advertisement as misleading.
Add-ons not reflected in the advertised price
Some enforcement actions have focused on situations where consumers were required to purchase products or services (such as protection packages or other add-ons) that were not included in the advertised price.
If an add-on is required, it should be noted in the advertised price. But beware of your state law obligations. For example, California’s CARS Act, which takes effect on October 1, 2026, requires a specific disclosure regarding add-ons (e.g., “This add-on product or service is not required, and you can buy or lease the vehicle without it.”).
Conditional discounts or rebates
Advertising a price that depends on rebates or incentives not available to all consumers can also create risk if those qualifications are not clearly disclosed.
Financing-dependent pricing
The FTC has also warned dealers about advertising prices that are only available if consumers use dealer-arranged financing. When price availability depends on financing terms, that needs to be disclosed.
Advertising unavailable vehicles
Promoting vehicles that are not actually available for purchase can create the appearance of a low price designed to draw consumers in. This practice is commonly cited in “bait-and-switch” advertising cases.
Clear Disclosures Still Matter… But Disclosures Alone Aren’t Enough
When advertising vehicle pricing, disclosures remain an important part of compliance However, simply including fine print somewhere in an advertisement is not always sufficient. Regulators often look into whether disclosures are clear and conspicuous, which means they should be:
- Prominent enough for consumers to notice
- Placed near the claim they explain
- Easy to understand
- Not contradicted by other statements in the advertisement
And just as important, regulators often evaluate the overall impression created by an advertisement.
Even if individual statements are technically accurate, the net impression of an advertisement can still be considered misleading if consumers are likely to misunderstand the actual price.
Advertising Compliance Is Not Just a Marketing Issue
One of the most important takeaways from recent enforcement activity is that advertising compliance is rarely limited to marketing alone. Pricing transparency depends on alignment across multiple parts of the dealership, including:
- Marketing and advertising
- Website and digital retailing tools
- Third-party listing sites
- Sales processes
- F&I practices
When the price advertised online does not match the price presented in the showroom (or when required add-ons appear later in the transaction), those inconsistencies can create regulatory exposure.
Maintaining a level of consistency across these touchpoints is key to reducing risk.
What Dealerships Should Do Now
The FTC’s latest action should serve as a reminder for dealerships to take a fresh look at their advertising and pricing practices.
Practical steps may include:
- Reviewing vehicle listings and marketing materials to ensure prices reflect the actual purchase price
- Auditing pricing across third-party listing platforms
- Evaluating rebate disclosures and eligibility requirements
- Confirming that required add-ons and fees are handled consistently
- Verifying that advertised inventory is available
- Providing training to sales, marketing, and F&I teams on advertising compliance expectations
Proactive reviews can help dealerships identify potential issues before they become enforcement problems.
The Bottom Line
The FTC’s warning letters to 97 dealership groups send a clear signal: regulators remain focused on pricing transparency in the auto retail market. Even without new rules, existing consumer protection laws already require that vehicle prices be advertised accurately and presented clearly to consumers. Dealerships that prioritize truthful advertising, clear disclosures, and consistent pricing practices will be better positioned to reduce regulatory risk—and build greater trust with consumers.
Strengthen Your Dealership’s Advertising Compliance
For 40 years, KPA has helped dealerships reduce regulatory risk with software, training, and expert guidance. Our solutions are designed to support compliant advertising, transparent pricing, and consistent dealership processes. Chat with our team to see if your dealership is falling short in advertising compliance.
