FTC Releases FAQs On Auto Pricing: What Dealers And Advertisers Need To Know

If you’re a dealer, an ad agency handling automotive accounts, or in-house counsel advising automotive clients, the Commission’s latest guidance on auto pricing transparency deserves a careful read. The guidance echoes familiar principles we’ve heard in other areas from federal and state regulators related to the expectation for all-in pricing, with important nuances unique to the auto industry.

The enforcement backdrop is significant. Already in 2026, the FTC has filed two enforcement actions against dealerships — a $4 million settlement against a Connecticut dealership and a settlement with consumer redress up to $75 million plus a $3.1 million civil penalty — over allegations of deceptive pricing and unauthorized add-ons. The Commission also sent warning letters to 97 auto dealer groups in March, putting the industry on notice of the FTC’s expectation that advertised prices must reflect what consumers actually pay inclusive of all mandatory fees.

Bureau of Consumer Protection Director Christopher Mufarrige reinforced the point in his prepared remarks at the NADA conference, calling price transparency “a cornerstone of well-functioning markets” and making clear that this is a top enforcement priority for the Bureau under his leadership.

Framed as a set of FAQs, the guidance does not have the force of law, but it clarifies what the FTC considers deceptive when it comes to advertised prices, add-on fees, and consumer-facing disclosures. At the outset, FTC Staff explain that the “FAQs address various common questions and are accurate statements of the law as a general matter, [b]ut the net impression of any given advertisement always turns on the specific circumstances of that advertisement.”

The Bottom Line: Advertised Prices Must Be All-In

The core message won’t surprise anyone following the FTC’s crackdown on fees and price transparency: the price you advertise should be the price a consumer can actually pay, including all mandatory fees, and that price must be the most prominent in all advertising. Adding mandatory fees — whether for dealer-installed accessories, documentation, or processing — on top of an initial price quote, where consumers cannot avoid paying them, will likely constitute a Section 5 violation. The only fees that may be excluded from the advertised all-in price are government-required charges paid directly to a federal, state, or local government agency.

Breaking Down the FAQs

The FAQs address several recurring dealer practices that generate consumer complaints and enforcement interest:

Advertised price must include all mandatory charges. If a fee or charge is required for any buyer, it must be included in the advertised price — even if dealers routinely waive certain fees for some buyers. The FAQs specifically identify document fees as an example of a mandatory charge that must be included in the all-in advertised price, irrespective of separate state disclosure requirements (as discussed below).

Total price must be the most prominent price. The all-in price must appear most prominently in any vehicle advertisement. Other prices, such as MSRP or a reduced price based on rebates, may also appear but must not be more prominent than the all-in price.

State disclosure requirements do not negate FTC compliance. While the FTC acknowledges that states require various disclosures around auto prices and fees, it emphasizes that dealers must comply with all applicable requirements and that specific disclosure requirements do not conflict with all-in pricing principles. For example, the guidance provides that “[s]tate-specific document fee rules do not change the fundamental FTC Act requirement that the advertised price must reflect every dealer-required charge and must be the most prominent amount consumers see.”

Ability to negotiate does not negate the all-in price requirement. Even if a dealer is likely to negotiate certain aspects of the price, the advertised price must still be the price that any consumer can pay for the vehicle, whether or not they choose to negotiate. In other words, while dealers may negotiate further from the advertised price with individual consumers, the advertised price must be available to all consumers regardless of whether they choose to negotiate.

Add-on products must be accurately described and require express, informed consent. Dealers can offer optional add-ons (extended warranties, paint protection, GAP insurance) but must make clear that these are optional. Notably, add-ons that cannot be removed from the vehicle are not “optional.” Dealers should not bury information about add-ons in paperwork but should instead ensure consumers understand what they are purchasing and provide express, informed consent.

Advertising vehicles not in inventory. Dealers may advertise vehicles not currently in their inventory (whether in transit from the manufacturer, stored offsite, or available through inventory sharing), but advertising must make clear that the vehicle is not physically on the lot if that is the case. Dealers must never advertise vehicles that are unavailable solely to draw consumers to the dealership and steer them to other options.

Representative photos. Dealers may use representative photos of vehicles if they are truly representative (same make, model, condition, and all other material characteristics) and consumers would understand the image is illustrative. Antique or used vehicles are rarely identical, so consumers reasonably expect the photo to show the exact vehicle offered for sale.

Dealers, third-party advertisers, and OEMs are all responsible for accurate pricing. Everyone with control over a vehicle’s advertising is responsible for ensuring that the actual price appears as the most prominent figure. The guidance emphasizes that all parties responsible for price advertising and sales should “take all steps within their control to ensure that the third party discloses it as the most prominent amount,” including exercising oversight of personnel to avoid contradictory instructions.

Practical Tips

• Review advertised prices across every channel. Online listings, print ads, billboards, TV spots, social media — all of it. If there is a mandatory fee that any buyer might pay, it belongs in the headline number, not in a footnote.
• Pressure-test the add-on sales process. Review the vehicle purchase process carefully. Is every optional product presented as genuinely optional? Is consent documented? If F&I managers are adding products and charges and waiting for customers to object, that approach warrants reconsideration.
• Train sales and F&I staff. A compliance program is only as strong as what happens in actual sales conversations. Staff must understand that undisclosed fees and misleading financing claims can trigger FTC enforcement and state UDAP liability – resulting in extensive monetary redress and civil penalties.
• Document everything. In an enforcement investigation, the FTC will want to see that actual practices matched advertising claims. Maintain records of advertised prices, consumer disclosures, and consent documentation.

The guidance acknowledges that the FAQs respond to common questions, but “the net impression of any given advertisement always turns on the specific circumstances of that advertisement.” We appreciate that Staff included a plug for the advertising law bar, encouraging advertisers to “consider seeking the guidance of legal counsel for situations not addressed by these FAQs” — hey, that’s us! We’ll continue tracking FTC auto dealer enforcement developments here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.