KEY TAKEAWAYS

• The FTC says the advertised price must be the price any consumer can walk in and pay, excluding only charges the government requires the consumer to pay.
• Mandatory document fees and dealer-required add-ons must be included in the advertised price. Rebates and conditional discounts cannot be used to create a lower headline price that is unavailable to every consumer.
• The actual price must be the most prominent price everywhere consumers encounter it. This includes on inventory pages, vehicle detail pages, third-party sites, social media, signs, phone calls, and text messages.
• Dealers should act now. The FTC says price transparency is not a new requirement, offers no grace period, and continues to treat deceptive pricing as an enforcement priority.

Earlier this year, the Federal Trade Commission sent warning letters to 97 auto dealership groups over advertising and pricing practices it considers deceptive.

At the time, the message was serious but left dealers with plenty of practical questions. What exactly belongs in the advertised price? How should a dealer handle document fees? Can an ad feature a conditional rebate? What happens when a vehicle is in transit or appears on a third-party listing site?

The FTC has now answered many of those questions – officially.

The FTC’s new Automobile Industry Pricing Transparency FAQs provide the clearest explanation yet of how FTC staff expects dealers to advertise vehicle prices under Section 5 of the FTC Act. The central message is straightforward: the price consumers see should be the price they can actually pay.

The Advertised Price Must Reflect Reality

The FTC says an advertised price must be the actual price that any consumer can walk in and pay to purchase the vehicle.

Dealers may exclude only charges that a federal, state, or local government requires the consumer to pay directly to a government agency or department. Everything else the dealer requires the consumer to pay must be included in the advertised price.

That distinction matters.

A fee does not become a government charge merely because state law authorizes the dealer to collect it. Also, a charge the government imposes on the dealer does not become excludable simply because the dealer passes it along to the customer.

The practical question is not, “Are we allowed to charge this fee?” It is, “Can every consumer purchase this vehicle for the advertised price without paying this fee?” If the answer is no, the fee generally belongs in the advertised price.

Document Fees Must Be Included

The FAQs address document fees directly.

If the dealer requires any consumer to pay a document fee (or an equivalent fee), the full fee must be built into the advertised price. The FTC gives the example of a vehicle priced at $40,000 with a mandatory $85 document fee. The advertised price should be $40,085, excluding only government-required charges the consumer must pay.

The same principle applies when a dealer varies or discounts its document fee. If some consumers will be required to pay the higher fee, the dealer cannot build only the lower fee into the advertised price.

State disclosure rules do not replace this federal expectation. A state may cap document fees, require specific language, or permit a fee to be disclosed separately. Dealers still need to satisfy the FTC Act by making the actual price the clearest and most prominent amount in the advertisement, then add any disclosures state law requires.

This is another reminder that complying with state law does not necessarily satisfy every applicable federal requirement.

The Actual Price Must Be Most Prominent

Including the actual price somewhere in the advertisement is not enough. According to the FTC, it must be the most prominent amount consumers see, and prominence is about more than font size.

Placement, color, labels, surrounding language, and the overall presentation all affect what draws a consumer’s attention. A smaller MSRP displayed in a more noticeable location could still overshadow the actual price. Language placed near multiple figures can also create confusion about which price the consumer can actually obtain.

For dealer websites, this expectation applies to any page that states an amount a consumer may pay. That includes both inventory search results and individual vehicle detail pages.

The safest review is not simply to confirm that the actual price appears on the page. Dealers should step back and ask what price a reasonable consumer is most likely to notice, understand, and remember.

Conditional Rebates Cannot Create the Headline Price

Dealers may advertise rebates and discounts, but a discount available only to a subset of buyers cannot be used to establish the most prominent advertised price. The FTC offers two useful examples:

• A first-responder discount may be advertised if the price available to every consumer remains most prominent and the discount terms are clear.
• A discount for using dealer-arranged financing may be advertised if the price available with any financing remains most prominent.

Dealers can also negotiate and sell a vehicle below its advertised price. What they cannot do is advertise a price that only some consumers can obtain through negotiation, qualification, or a special condition. If a consumer walks in without qualifying for a limited rebate, without using dealer financing, and without negotiating, the prominently advertised price still needs to be available to that consumer.

Optional Products Must Remain Optional

The FAQs also address a recurring source of enforcement risk: add-ons.

Dealers may offer protection products, accessories, and other goods or services. But, they cannot imply that an optional product is required, claim an installed option cannot be removed when the consumer is not required to purchase it, misstate its price, or charge for a product the consumer did not agree to buy.

Calling an item “optional” in the paperwork will not solve the problem if the actual sales process makes it mandatory. This is where advertising compliance, sales practices, and F&I compliance intersect. A compliant advertisement can still create risk if the customer reaches the showroom and encounters a different price, a required package, or a product presented as non-negotiable.

Every Advertising Channel Counts

The FTC makes clear that price transparency is not limited to a dealer’s primary website.

The same obligation can apply to:

• Third-party listing sites.
• Social media.
• Print advertisements.
• Roadside signs.
• Phone calls.
• Text messages.
• Other communications in which dealership personnel present a price.

Everyone who controls the advertising has responsibility for making sure the actual price is accurate and most prominent. That can include dealers, third-party advertisers, and OEMs.

Dealers should provide accurate pricing to their vendors, give no contradictory instructions, and take every step within their control to ensure third-party platforms display the price properly. Outsourcing an advertisement does not outsource the dealership’s compliance risk.

Inventory Accuracy Is Part of Price Transparency

The FAQs also address vehicles that are in transit, stored offsite, or recently sold.

A dealer may advertise a vehicle that is not physically on the lot, but the advertisement must plainly disclose that fact. A vehicle listed as in transit must actually be on its way and available for purchase when it arrives, and not already allocated to another customer’s paid order.

Representative photos may be used when they truly represent the vehicle’s make, model, condition, and other material characteristics, and when consumers would understand that the image is illustrative. That may work for certain new vehicles. It is far riskier for used or antique vehicles, where condition and other characteristics are rarely identical.

Dealers also should not leave sold or otherwise unavailable vehicles online as a way to attract consumers and steer them toward higher-priced alternatives.

In short, inventory advertising must accurately communicate not only price, but availability and identity.

There Is No Grace Period

Perhaps the most important FAQ asks how long dealers have to comply.

The FTC’s answer is effectively: now. According to the agency, price transparency is not a new requirement. Section 5 of the FTC Act has prohibited unfair or deceptive practices for decades, and dealers that mislead consumers about price risk enforcement action today.

While the FAQs are staff guidance and are not binding on the Commission or the public, and the FAQs acknowledge that every advertisement depends on its specific facts and overall net impression, dealers should not mistake those qualifications for a reason to wait or fail to make changes.

The FTC’s announcement expressly identifies price transparency as an enforcement priority – not just in auto, but in other industries too. The agency has also invited consumers and dealers to report suspected violations, and to submit supporting advertisements and contracts through ReportFraud.ftc.gov.

If your competitors are not advertising prices accurately, the FTC wants to hear about it. That makes transparent pricing both a compliance obligation and a competitive issue.

What Dealerships Should Do Now

Dealers should use these FAQs as an immediate audit framework across advertising, sales, and F&I.

Start by asking:

• Does every advertised price include all dealer-required fees and products?
• Is the price available to every consumer, without a limited rebate, a required financing arrangement, or individual negotiation?
• Is the actual price the most prominent amount on inventory pages, vehicle detail pages, and third-party listings?
• Do sales and F&I teams honor the advertised price without adding mandatory products later?
• Are vehicles identified accurately as on-site, offsite, in transit, or unavailable?
• Are representative photos truly representative and clearly understood as illustrative?
• Do your vendors, OEM relationships, and internal teams follow the same pricing instructions?
• Can you document regular reviews, corrections, training, and accountability?

The goal is consistency. The price in the ad, the price communicated by the sales team, and the price reflected in the deal should tell the same story.

Turn the FAQs Into a Working Compliance Program

The FTC has removed much of the ambiguity surrounding its expectations. Now dealerships need systems that turn those expectations into repeatable practice.

That means more than revising a disclaimer or reviewing a handful of vehicle listings. It requires ongoing monitoring across advertising channels, testing how leads are handled, training employees, reviewing showroom and F&I practices, and examining completed deal jackets for gaps.

KPA’s Advertising, Sales, and F&I Compliance solution helps dealers manage those risks from the first advertisement through the final signature. Our solutions include automated advertising scans and archiving, AI-powered lead-response audits, expert website and deal jacket reviews, F&I inspections, compliance training, and dashboards that help leadership identify and address gaps.

The FTC’s message is clear. Consumers should not have to work to discover the real price of a vehicle, and dealers should not wait for a warning letter, complaint, or investigation to find out their process is not working.