You Auto Know!® - Lack of Communication

in Automotive/Transportation, Business, News

Scenario: You advertise your new and used vehicles on the internet. Mrs. Jones comes to the dealership to purchase a vehicle. She sees the price handwritten on the window of the car she is purchasing which is displayed in the showroom. She finishes the purchase and takes delivery. Shortly thereafter, you receive a lawsuit from a consumer attorney indicating that the dealership took advantage of Mrs. Jones because she purchased the vehicle in excess of the advertised price. The internet price was not the same price as written on the windshield of the vehicle. Further, neither the sales person, the F&I manager or the sales manager informed Mrs. Jones that the handwritten price on the windshield was not accurate. Does this dealership have an issue?

Nowadays almost every statement by a salesperson or manager can be construed as an advertisement. Websites are considered a medium for advertising and must comply with all advertising rules including but not limited to proper disclosures, proper advertising of periodic payments, proper lease payments, disclosing whether limited quantities are in stock, the advertised price and to whom the advertised price is available, just to name a few. Further, a dealership’s phone message played to consumers while they are on hold, a salesperson’s representation at the point of selling the vehicle and e-mails can be an ad. Don’t forget about text messages. Text messages can be construed as direct mail solicitations.  

Internet or on-line advertising must comply with every aspect of Ohio law whether the ads are on websites, in an e-mail format or any other electronic format that is utilized for advertising. Further, the clear and conspicuous rule regarding disclosures still applies to internet advertising. Obviously the disclosures need to be in close proximity to the item that is being disclosed or disclaimed. Further, the location of the disclosures should not be confused with any background “noise” that would distract the reader from the disclosure.   

The issue facing the sales staff is the pricing on the website. In just the past couple of months, this author has been engaged in defending several lawsuits where the dealership sold a vehicle above the price advertised on its website. In each instance, the sales person did not know what the advertised price was and relied on the price that was either written on the windshield or on some type of mirror hanger or displayed elsewhere.

Your dealership needs to have a policy and procedure in place to change the price that is physically on the vehicle to reflect the price on its website. At least the minimum practice is that a price is not provided to a consumer until the sales manager confirms the actual advertised price. I know I have heard all the excuses that the manufacturer programs change daily or weekly and it is hard to keep up. However, it is a clear violation if you fail to sell the vehicle at an advertised price. In the facts in the scenario, the dealership would be responsible for three times the difference in the advertised price and the sales price plus attorney’s fees and costs. Therefore, you must have a system in place so that the advertised price that is reflected on the website is communicated to the consumer. Also, make sure that the vehicle that is sold is immediately “scrubbed” from the website. The reason, a new advertised price may be priced lower, again, than the sales price. Although defensible, could lead to a lawsuit. 

Contact Information:

Robert A. Poklar, Esq.

Weston Hurd LLP

The Tower at Erieview

1301 East 9th Street, Suite 1900

Cleveland, Ohio 44114-1862

p: 216.687.3243; f: 216.621.8369

rpoklar@westonhurd.com

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