Four of ten advertising “mistakes” commonly made by dealers involve F&I activities in a list compiled from complaints to the North Carolina Attorney General’s office. The office warns dealers that, while they are liable for illegal ads primarily, a media outlet running the ad or the advertising agency preparing the ad may also be liable.

The come-on terms that are F&I-related include the following: “Bad Credit – No Problem,” “Pre-Approved Credit,” or “You Are Approved for $XXX,” or “Lease a Vehicle for $XXX Per Month,” and “$49 Down Acquisition Fee.”

Federal laws, says the Attorney General’s office Raleigh, N.C., require that the real cost of financing a purchase must be disclosed. Dealers are barred from advertising “pre-approved credit” without actual approval of the consumer by a lending institution – meaning every consumer reading the ad.

Stating a monthly lease payment is a violation of the Federal Truth-in-Leasing Act, because it fails to disclose other expenses due at signing, if there are any.

Similarly, the “$49 down” acquisition fee promise constitutes a “trigger” term that fails to disclose the full cost of the deal at signing, a specific abuse of Regulation Z.

Other ad headlines which authorities describe as potentially misleading and unlawful include “under invoice,” “under dealers’ cost,” “public liquidation sale,” “program cars,” “off list price,” “repo sale,” “bank repossession sale,” and “guaranteed trade-in $XXX.”