Misleading sales ads hurt F&I

Jim Henry is a special correspondent for Automotive News.

State and federal regulators have cracked down this year on misleading dealership advertising. In just about every case, their complaint was that the advertising failed to adequately disclose financial terms or hidden costs.

The regulators’ complaints weren’t aimed at the F&I office. But customers don’t necessarily distinguish between a dealership’s marketing and F&I departments. A deceptive advertising complaint reflects on the dealership as a whole and provides ammunition to critics of dealership-based financing.

On March 24, New York Attorney General Eric Schneiderman said that six dealerships in the state had agreed to settlements. The attorney general also planned to file suit against a seventh dealership.

All seven stores prominently advertised low monthly payments but didn’t adequately disclose that the monthly payment reflected discounts for which a lot of customers don’t qualify, such as a rebate for current or former military members, state prosecutors said.

Some ads also failed to “clearly and conspicuously” provide required disclosures for such basics as annual percentage rate or the required amount down.

So perhaps, during those meetings that effective dealerships are supposed to be having between departments, the F&I guys could ask the advertising and sales folks to tone it down? After all, the F&I guy is bound to be the one who has to break the news to the customer that he or she doesn’t qualify for that low, low monthly payment. And there’s something to be said for being the hero who keeps your store out of the Attorney General’s crosshairs.

You can reach Jim Henry at autonews@crain.com

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