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<\/h2>\n<\/h2>\nYou’ve put a ton of work into your auto dealer advertising<\/a>, and you’re proud of your well-rounded marketing campaigns<\/a>. You’re utilizing both online and offline platforms, optimizing your website, hosting community events, and testing out mobile strategies<\/a>. You also know that price can be a deciding factor for many car shoppers, so you use enticing language about financing specials in your advertisements, which seems to be bringing in a lot of foot traffic!<\/p>\n However, are those financing deals you’re advertising legal?<\/p>\n As an auto dealer, you’re on the hook for complying with many different regulations and laws. One of them, Regulation Z<\/a>, affects how you advertise financing options. Here’s an in-depth Regulation Z summary that explains what it covers and what your obligations are.<\/p>\n “Buying or leasing a car is a big deal, and car ads are an important source of information for serious shopping,” said Jessica Rich, director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, in a press release. “Dealers’ ads need to spell out costs and other important terms customers can count on. If they don’t, dealers can count on the FTC to take action.”<\/p>\n It’s not enough to say, “Low monthly payments of $200!” You must also explain how the consumer can receive that rate \u2014 do they need to put $5,000 down, or be approved for a rate of 4%, select a 72-month repayment period or all of the above? Spell it out in black and white so it is abundantly clear.<\/p>\n Under Regulation Z, you must be upfront and disclose all terms of loans to potential borrowers, including, but not limited to:<\/p>\n Reg Z is all about transparency; don’t make false or misleading claims to get customers into your dealership.<\/p>\n If you’re advertising a vehicle and include a mention of a one-time credit transaction, there are specific terms \u2014 known as trigger terms \u2014 that will signal to you that more information is required. If any of these trigger terms pop up, you must clearly and conspicuously disclose additional details about the offer:<\/p>\n What doesn’t trigger an obligation to disclose further information? There are, indeed, a few things:<\/p>\n While these Regulation Z disclosures must be clearly and conspicuously displayed, there are no exact rules regarding their size or display format. If you’re not sure what’s legal, the FTC offers some helpful information regarding the ways to ensure your disclosures are efficient and compliant.<\/p>\n Violations of Regulation Z may result in the government and individuals’ bringing civil charges against you and your dealership’s paying statutory damages, attorney fees, and court costs in all cases. For individual actions, you might have to pay not less than $100 or more than $1,000. For class actions, there’s a maximum of $500,000 or 1% of your net worth \u2014 whichever is less.<\/p>\n What is your best bet?<\/strong>\u00a0We’re not lawyers and we don’t play them on TV, so please consult with your legal team and do additional homework<\/a> to ensure your dealership is in full compliance. Keeping your advertisements legal doesn’t just keep you compliant \u2014 you’re also exhibiting a transparency that consumers will come to know and trust.<\/p>\nWhat is Regulation Z?<\/h3>\n
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Regulation Z (also known as Reg Z) is the implementing regulation of the Truth-in-Lending Act<\/a> (TILA), and it governs how auto loans and leases are advertised. The general idea is that if you talk about consumer credit in your ads; the information must be accurate and note whether certain terms may be subject to restrictions or qualifications.<\/p>\n\n
A Regulation Z summary of “trigger terms”<\/h3>\n
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How can you know when you need to provide additional information about a financing option? Are there certain situations where you don’t have to say anything?<\/p>\n\n
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What happens if you don’t comply<\/h3>\n
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If you’re the type of person who likes to skate around the rules, you won’t want to mess with Regulation Z. In 2014, the FTC conducted “Operation Steer Clear” and nabbed ten dealerships for misrepresenting finance terms in a variety of advertisements. They always keep an eye out for deceptive advertising and encourage consumers to do the same.<\/p>\n\n\nInterested in an Affordable, Full-Featured Auto Dealer CRM?<\/h2>\n
Schedule an AutoRaptor Demo Now!<\/h3>\n<\/div>\n