Deceptive Car Advertising
Buying a car may be one of
the most expensive
purchases a consumer
makes, and it is important to
make an informed decision.
It can seem like car dealers advertise new
promotions every day. Offers may include high
trade-in allowances, free options, invoice
prices, prizes, special credit approval and low
Advertisements should provide correct
information and should not be misleading.
Tennessee law prohibits companies and
individuals from engaging in deceptive or
misleading advertising and other deceptive
When shopping for a car, carefully read
advertisements including the fine print.
Compare ads for the same type of vehicle from
different dealers. Ask the dealer to explain
terms included in the advertisement.
Always remember that dealers are in the
business of selling cars, and the market can be
Deciphering the Ads
The following tips can help a consumer
decipher a potentially deceptive car ad:
- Trade-in allowances. If a dealer offers
more than the value of the trade-in, the
new vehicle may end up costing more to
cover the value of the extra trade-in
- Low price specials. An ad offering a car
for a lower price than other dealers may
not be comparing cars with the same
options like air conditioning or power
windows. Some car dealers may advertise
a low price, then say the car is no longer in
stock. Or an advertised low monthly
payment may be for a lease rather than a
- Low interest rates. While some
manufacturers may offer legitimate low or
0% loans, sometimes a low interest rate is
not the good deal it seems to be. A low
rate may require paying a substantial
down payment, purchasing a car at sticker
price, or repaying the loan in a shorter
time period. Check with other lenders for
competitive rates. If the rate seems too
good to be true, it probably is.
- Credit approval. Federal law prohibits car
dealers from advertising that customers
are preapproved for credit unless the
dealer has retained a lending institution
which has approved each consumer.
Ultimately, lenders have final credit
approval. Consider asking for
documentation showing the dealer has
received final approval for the loan or
- Prize giveaways. Car ads sometimes offer
a cash or prize incentive for buying a car.
Tennessee law requires certain disclosures
be made in the ad when prizes are offered
as an inducement to purchase a product.
Often, dealers fail to disclose conditions
such as being able to finance the car at a
certain rate before the prize becomes a
part of the package. Also be aware that
any sweepstakes advertisement must
clearly disclose the value of the prizes and
the odds of winning.
- If an advertisement sounds too good to be
true, it usually is. You may end up paying
for any incentives in other parts of the
total sales price. Carefully read all
documents including the fine print. Ask all
the questions you need to make an
informed purchase and be a satisfied
File a Complaint
If you have a complaint about a motor vehicle
purchase or seller, contact the Tennessee
Division of Consumer Affairs or the Tennessee
Motor Vehicle Commission.
To check out a company
before you do business
with them or to file a
complaint against a company, an individual, or a business entity, contact contact the Tennessee Division of Consumer Affairs.