Warning About Deceptive Auto Ads

by Barbara Nevins Taylor

How comfortable did you feel the last time you visited a car dealer and how long did you have to think about it?  If you worried about whether you got the straight story from a salesmen when you shopped for a vehicle in a dealership, you may have good reason.  And you also have a lot of company.

Car dealer complaints are on the Federal Trade Commission’s (FTC) top 10  list. After a sting operation that visited ten dealerships in six states, the FTC reached a settlement with dealerships that the agency alleges engaged in deceptive practices and  Truth in Lending Act and Consumer Leasing Act violations

All promised, without admitting guilt, to avoid these practices in the future. But a look at what investigators found offers a pretty chilling warning for us all.

The take-away: when you visit an auto dealer you want to be very careful that you really get the deal that’s advertised.

Here’s what the FTC found.

  • In California, a dealership allegedly falsely advertised a low price for vehicles when the price was actually $5,000 higher. Another allegedly advertised a zero upfront payment for leased vehicles, and failed to disclose the fees it charged.
  • In Georgia, a dealership allegedly advertised low teaser rates and failed to disclose that the low payments were temporary.
  • In Illinois, a dealer allegedly used the zero upfront payment ploy for leased vehicles and again failed to disclose the fees.
  • In North Carolina, a dealership  allegedly used the bait of low teaser payments and failed to point out that regular payments would be much higher.
  • In Michigan, a dealership allegedly sent fliers that falsely claimed people won sweepstakes prizes when there was no sweepstakes.
  • In Texas, a dealership allegedly told consumers they could purchase a vehicle for a low monthly payment but failed to disclose the big balloon payment at the end.


The FTC hopes that its action against this handful of dealers will send a warning about deceptive auto ads to other dealers.

But it’s also a great idea to make sure that you know as much as possible about what a dealer is offering you.


  1. Do I have to pay additional fees, a down payment or a big payment at the end of a lease or payment schedule?
  2. Does the advertised price apply only to certain models?
  3. Can I order a vehicle, or does the price only apply to one at the dealership?
  4. Do I need certain qualifications to get the discount, the price or the advertised credit or financing?
  5. Do I have to pay the loan off in a short period of time like 36 months?
  6. Do I need to take the loan for a specific time period?
  7. Do I have to buy extra things like a warranty, a service contract or rustproofing?
  8. Will I get same good price if I pay cash or get my own financing from a bank or credit union?
  9. Do the advertised payments remain the same for every month of loan, or do they increase after a few months?
  10. Is there a balloon payment at the end?
  11. If the ad says, “$0 Due at Lease Signing,” do I have to pay something before I drive the vehicle off of the lot. Do I have to pay fees, taxes, a security deposit or the first month’s lease payment.

Here are the 10 dealerships that settled with the FTC:



Published by

Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.