I just saw a mail out advertisement for a pretty unbelievable price on a new car. The advertisement is repeated online, link here. When you start to read the fine print, you realize that there are rebates that are summed up that required you to be a new college graduate AND active duty military AND own a vehicle of that brand, AND be leasing a vehicle of that brand AND own a competitive brand. I'd be doubtful that anybody on the planet would qualify for all the rebates. To top it off, the great price REQUIRES a significant vehicle trade in. Note: the fine print on the paper mail out is not even on the same page as the advertised price. And it's really small print in proportion to the ad.

I know that

The Federal Trade Commission (FTC) is the main federal agency that enforces advertising laws and regulations. Under the Federal Trade Commission Act:

  • Advertising must be truthful and non-deceptive

  • Advertisers must have evidence to back up their claims

  • Advertisements cannot be unfair

I see this as a clear bait and switch sales promotion. Certainly this is sleazy, and doesn't speak well at all for the integrity or character of the dealership. But.. what I really want to know.... is it illegal, particularly the clause REQUIRING a trade in to qualify for the advertised price? .

  • 1
    Contact the ftc and complain. It may be misleading but only they or the court can decide it it's actually over the line into false advertising. And the fact that you found the fine print suggests it probably isn't. Caveat emptor, especially around auto salesmen.
    – keshlam
    Feb 25, 2015 at 20:33
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    It isn't bait and switch. They told you exactly what the deal is. Bait and switch would be if the deal as advertised wasn't available, but they had a different less good deal as a substitute. Feb 25, 2015 at 21:02
  • I remember seeing ads like that in Florida- this fine car was yours for only $23,997, provided you already had a trade worth $8,000 or whatever. I don't think it was illegal there, but it sure made me want to 'steer clear'. Feb 25, 2015 at 21:55
  • While it's a long-running joke, running ads like "Free Car*" with tiny print at the bottom that says "*Car not actually free" are often thought to be legal, because hey "gotta read the fine print", right? The funny thing is that it's still entirely illegal to do that, yet common perception is this is ok because it is experienced so often. It's still illegal - it's just so darn common that people think it's just the way things are. There are so many dealerships, and so many ads, that I think people get blinded and mistake common indecency for a social norm.
    – BrianH
    Feb 25, 2015 at 22:30
  • @BrianDHall Can you please provide a legal citation for your claim that those ads are illegal? What if I'm not even a business but I take out a prank ad in the newspaper that just says "Free car* *car not actually free"? Is that also illegal?
    – dg99
    Feb 26, 2015 at 16:54

2 Answers 2


This is completely disgusting, utterly unethical, deeply objectionable, and yes, it is almost certainly illegal. The Federal Trade Commission has indeed filed suit, halted ads, etc in a number of cases - but these likely only represent a tiny percentage of all cases. This doesn't make what the car dealer's do ok, but don't expect the SWAT team to bust some heads any time soon - which is kind of sad, but let's deal with the details.

Let's see what the Federal Trade Commission has to say in their article, Are Car Ads Taking You for a Ride?

Deceptive Car Ads Here are some claims that may be deceptive — and why:

Vehicles are available at a specific low price or for a specific discount

What may be missing: The low price is after a downpayment, often thousands of dollars, plus other fees, like taxes, licensing and document fees, on approved credit. Other pitches: The discount is only for a pricey, fully-loaded model; or the reduced price or discount offered might depend on qualifications like the buyer being a recent college graduate or having an account at a particular bank.

“Only $99/Month”

What may be missing: The advertised payments are temporary “teaser” payments. Payments for the rest of the loan term are much higher. A variation on this pitch: You will owe a balloon payment — usually thousands of dollars — at the end of the term.

So both of these are what the FTC explicitly says are deceptive practices. Has the FTC taken action in cases similar to this? Yes, they have:

If auto dealers make advertising claims in headlines, they can’t take them away in fine print,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These actions show there is a financial cost for violating FTC orders.”

In the case referenced above, the owners of a 20+ dealership chain was hit with about $250,000 in fines. If you think that's a tiny portion of the unethical gains they made from those ads in the time they were running, I'd say you were absolutely correct and that's little more than a "cost of doing business" for unscrupulous companies. But that's the state of the US nation at this time, and so we are left with "caveat emptor" as a guiding principle.

What can you do about it? Competitors are technically allowed to file suit for deceptive business practices, so if you know any honest dealers in the area you can tip them off about it (try saying that out loud with a serious face).

But even better, you can contact the FTC and file a formal complaint online. I wouldn't expect the world to change for your complaint, but even if it just generates a letter it may be enough to let a company know someone is watching - and if they are a big business, they might actually get into a little bit of trouble.

  • Great response, I for one, wholly expected that as the norm.
    – Pete B.
    Feb 26, 2015 at 14:09

But.. what I really want to know.... is it illegal, particularly the clause REQUIRING a trade in to qualify for the advertised price?

The price is always net of all the parts of the deal. As an example they gave the price if you have $4000 trade in. If you have no trade in, or a trade in worth less than 4K, your final price for the new car will be more. Of course how do you know that the trade in value they are giving you is fair. It could be worth 6K but they are only giving you a credit of 4K.

If you are going to trade in a vehicle while buying another vehicle the trade in should be a separate transaction. I always get a price quote for selling the old car before visiting the new car dealer. I do that to have a price point that I can judge while the pressure is on at the dealership..

Buying a car is a complex deal. The price, interest rate, length of loan, and the value of the trade in are all moving parts. It is even more complex if a lease is involved. They want to adjust the parts to be the highest profit that you are willing to agree to, while you think that you are getting a good deal.

This is the fine print:

All advertised amounts include all Hyundai incentives/rebates, dealer discounts and $2500 additional down from your trade in value. +0% APR for 72 months on select models subject to credit approval through HMF. *No payments or 90 days subject to credit approval. Value will be added to end of loan balance. 15MY Sonata - Price excludes tax, title, license, doc, and dealer fees. MSRP $22085- $2036 Dealer Discount - $500 HMA Lease Cash - $500 HMA Value Owner Coupon - $1000 HMA Retail Bonus Cash - $500 HMA Military Rebate - $500 HMA Competitive Owner Coupon - $400 HMA College Grad Rebate - $500 HMA Boost Program - $4000 Trade Allowance = Net Price $12149. On approved credit. Certain qualifications apply to each rebate. See dealer for details. Payment is 36 month lease with $0 due at signing. No security deposit required. All payment and prices include HMA College Grad Rebate, HMA Military Rebate, HMA Competitive Owner Coupon and HMA Valued Owner Coupon. Must be active military or spouse of same to qualify for HMA Military Rebate. Must graduate college in the next 6 months or within the last 2 years to qualify for HMA College Grad rebate. Must own currently registered Hyundai to qualify for HMA Valued Owner Coupon. Must own qualifying competitive vehicle to qualify for HMA Competitive Owner Coupon.

  • er, no. We are talking about an advertised sales price. Think about fair competition in the market place. This dealership advertises a price that is $4000 cheaper than the dealership next door. That $4000 is a deposit required up front to get that price. This is unfair and misleading advertising. They are using this misdirection to steer customers away from other dealerships unfairly.
    – zipzit
    Feb 26, 2015 at 15:34

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