As an automotive dealer, you’ve certainly heard about this: an email from the Used Vehicle Recall Notification Center lands in a customer’s inbox but turns out to be a barely disguised sales event promotion. This sort of hornswoggle is not limited to rusty hoopdie used iron lots, as even some of the most august dealerships in the country have resorted to these low-life tactics. A GM dealer founded nearly a century ago with 14 locations that regularly ranked in the top 10 in the nation was sued by the Attorney General (AG) of the state of Georgia for $50 million for sending out fake vehicle recall notices. Unable to legitimately defend themselves against the charges of grievously misleading their customers, the entire dealership network shut their doors. You don’t have to resort to faking recalls to cross the line of honesty and legality in your automotive email marketing
if you engage in any of these top 5 transgressions:
Push the MSRP - Many states prohibit any reference to MSRP discounts in any form of promotion and that emphatically includes email marketing. Stating that a 2005 Caddy Escalade ESV is 65% off its original sticker of $70,175 means nothing. Was the SUV only driven to church every Sunday by a little old - albeit bling-addicted - lady, or was it run hard and put away wet every night by a speed-addled ne'er do well chewing through his trust account? States have enacted legislation to protect their citizens against these types of cozening statements as it is obvious that mileage and condition are the primary indicators of legitimate value.
- If you claim in your email newsletters
that you finance anyone, you might as well start preparing to collect your payments from the “no fixed addresses” of every risk-prone John Doe in the state. Unless you are specifying a specific minimum qualification such as a FICO score over 550, you can be hit by AGs for misleading advertising. You can also forget about the old ploy of requiring a cash down payment equivalent to what you have in the vehicle and letting the payments just cover your profit, as the AGs will slam you for that too.
Pre-Approve – “You are pre-approved to receive $6,000 off any new pickup in stock” will draw the undesired attention of AGs, as you may be asked to prove that you qualified that particular customer, rather than just indiscriminately firing off the same offer to the thousands of your email subscribers. Another sticky wicket is the discount itself. Is that $6,000 off the sticker or the price you customarily sell that Suzuki Equator for? Given that you’ve actually ever sold (or even seen) a Suzuki Equator…
Sell across State Lines – Advertising and selling a vehicle across a state line can be a perilous endeavor as many states have various restrictions and prohibitions in place that can land your dealership into a legal morass. Although most of these forms of state regulations on interstate motor vehicle sales are rarely enforced, you certainly don’t want to be picked by the AG in the next state over to be made an example of.
Sign Off on Your Own Content – No email content should ever be sent out to a single subscriber until your dealership attorney has carefully reviewed every word. It is good practice to send the entire email to your lawyer for their approval as there may be graphic or image elements over and above the actual text that can land you in court. Once the approval is received, file it securely along with a copy of the email.
Keep up to date with all of the advertising restrictions imposed by the Consumer Leasing Act, the Truth in Lending Act and Federal Reserve Board Regulations Z & M, as well as those of every state you sell to. Note that legislation changes quickly and what was perfectly legal last year could get you slapped with subpoenas this year. You might not have 14 locations but you can get shut down just as quickly for violating federal and state standards enforcing veracity in your email marketing.