Last week, MADA issued important updates to its Advertising Standards and Three Strikes Policy following recent guidance from the FTC regarding dealer advertising practices.
On April 17, NADA hosted an FTC webinar in which senior FTC staff stated that, under Section 5 of the FTC Act, the “most prominent advertised price” must reflect the total price a consumer can pay to purchase a vehicle, excluding only government-required charges such as taxes, title, and registration. Because doc fees are dealer-imposed charges—not government charges—they must be included in the advertised price in all 50 states.
Summary of Key Changes to MADA Advertising Standards
Based on this guidance, the MADA Steering Committee has approved the following updates to the Ad Standards:
- Dealers must include the doc fee in the most prominent advertised price (the “all-in price”)
- Additionally, dealers must itemize or clearly disclose the amount of the doc fee in advertisements so the all-in price can be independently verified
- Dealers that do not charge a doc fee must clearly and conspicuously disclose that the doc fee is $0
- Dealer add-ons such as flashing brake lights, clear coat or ceramic coating, window tint, and paint protection film must be included in the most prominent advertised price if the customer is required to purchase them.
- A narrow exception applies for truly optional dealer add-ons that consumers can clearly decline without affecting the vehicle price
- Lease advertisements must include the doc fee and any other mandatory dealer fees in the total amount due at signing or, if $0 is advertised, in the advertised monthly payment
- Additionally, dealers must disclose the amount of the doc fee in lease advertisements in a manner that allows verification of how it is reflected in the amount due at signing or monthly payment
- Dealers who fail to comply with these requirements may be reported to the FTC
[Click to view redlined changes to the Ad Standards]
Why Itemization/Disclosure Is Required
Although the FTC does not require dealers to separately itemize or disclose the doc fee amount in advertising, the Steering Committee adopted this requirement to support consistent enforcement and compliance review by MADA’s outside counsel, Lathrop GPM.
Without disclosure of the doc fee amount, Lathrop GPM would have no practical way to determine whether a dealer properly included the doc fee in the advertised vehicle price. Requiring dealers to itemize or disclose the doc fee amount allows for efficient verification, reduces ambiguity, and strengthens overall compliance.
Dealer advertisements on third-party websites are expected to comply with the Ad Standards. However, when evaluating compliance, consideration will be given to the limitations of third-party platforms that may not yet have the capability to allow dealers to itemize or disclose the amount of the doc fee.
Enforcement Timeline
These standards are enforced by MADA’s outside counsel, David Archer with Lathrop GPM. Enforcement of these updated standards will begin on May 25.
As a reminder, MADA’s outside counsel does not proactively look for violations. Enforcement is complaint-based and occurs only when a dealer files a complaint.
To file a complaint against another dealer, click here: Complaint Form.
Doc Fee Disclosure Example
Below is an example illustrating how the doc fee should be properly disclosed and/or itemized in advertisements:
If you have questions about whether your advertising is compliant, please submit a pre-approval request to David Archer at david.archer@lathropgpm.com.
To learn more about the Ad Standards program, click here: MADA Advertising Standards.
Thank you for your attention to these important updates and for your continued commitment to compliant and transparent advertising practices.
