Check Out This Argument I Had With a Dealer About Deceptive Advertising

Navigating the minefield that is car shopping shouldn’t be as difficult as it is for most buyers. Some dealers make it easy, while others make it way more challenging than it needs to be. One of the most frustrating aspects is when buyers see a car for sale online, only to find out the posted price doesn’t include everything it is supposed to.

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Recently, I was shopping for a used Infiniti crossover for a client. He was a bit particular about his color and options combos, so that narrowed the inventory down. I spotted what looked like a very competitive car at an Infiniti dealer in Texas: It had reasonable miles and was advertised as a Certified Pre-Owned car.

Now, I’ve done enough business in Texas to know that a lot of the dealers in that state like to get a bit creative with their add-ons and accessory packages. If an advertised price seems a bit too good to be true, it probably is.

I spoke with a salesperson and confirmed the car was indeed available, then I asked him if their total price consisted of the posted price plus tax, DMV, dealer fees, but no other charges.

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He said, “Oh, yeah, it’s just the internet price plus tax and fees. Nothing else.”

But then he hit me with this: “We also give the customer the opportunity to buy the certified warranty at an additional cost.”

I said, “Hold up a second, are you telling me the car that is being advertised as a CPO car does not include the CPO warranty?

The salesman said, “Well, it qualifies for the CPO, but the warranty is extra.”

I’ve been down this road before with a few other dealers, and while the vast majority of stores do the right thing and sell a car with a Certified warranty if it is indeed advertised as such, some places try to use this as bait to extract some extra cash from the buyer. This, of course, violates Federal Trade Commission regulations on deceptive advertising.

I then informed the salesperson, “If you are advertising this car as CPO and not including the warranty in the price, you violating advertising regulations.”

At that point, he got a bit flustered and said, “Sir, I don’t know anything about that. You need to talk to my manager. I’ll have him call you.”

While I was waiting for the manager to get back to me, I did some research on the Texas DMV website about the advertising laws in that state. I found a very helpful PDF that reflects the FTC rules for advertising. Then the manager called and asked what he could do to help close the deal. I explained to him that if this car is being advertised as Certified but not actually sold with the warranty, we are going to have a hard time coming together for a deal and that he could be in violation of both state and federal regulations. He told me that his entire dealer group does things this way.

Here’s how I explained it to him:

If you went to Burger King and saw the Bacon Double Whopper on the menu for $4.99, ordered that sandwich but the worker said that the bacon is an extra dollar, you wouldn’t be too happy about that, because you expected the bacon to come with the burger at that price. That is how it is advertised. According to FTC rules, Burger King has to sell you the Bacon Double Whopper with bacon at that advertised price. And this car that is advertised as CPO must come with a full warranty at the advertised price. Do you understand what I’m saying?

The manager tried to retort by saying, “Well, when I go to Chipotle and order a burrito, they charge me extra for the guacamole.” I asked him if the guacamole was included in the menu description of his burrito. He said, “No, of course not.”

I responded with, “See, that’s exactly what I am talking about. Chipotle can charge extra for guac because they aren’t telling you it comes with your burrito. You can’t charge extra for the CPO because you are advertising it to customers with that already included.”

I don’t know if my fast food analogy worked, or if the fact that I cited Texas Admin Code 215.250 regarding false advertising from dealerships got the job done, but the manager eventually relented and sent me a quote on the car with the certified warranty included in the price.

Of course, once I relayed this story to my customer, he was rightfully hesitant to do business with this dealer and had me search for other leads. I ended up finding a newer car at a much more cooperative dealership.

The problem here is that consumers shouldn’t have to be well-versed in advertising regulations to guarantee they aren’t getting taken for a ride. I can only imagine how many customers this dealer group has ripped off over the years. Even though the car market is slowly improving, some stores still think they hold all the cards in a seller’s market. While dealers can legally sell whatever products they have for whatever price they want, they can’t charge customers extra for things that are already included in their ads. This is precisely why the FTC has ramped up their efforts to prevent this, and consumers should report these types of tactics whenever they encounter them.

Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to Tom@AutomatchConsulting.com