Dealer Board Asks for Media Help

The Virginia Motor Vehicle Dealer Board, the state agency charged with licensing and regulating new and used motor vehicle dealers, is asking for media help with dealer compliance on advertising laws and regulations.

By state regulation, the MVDB has adopted the Federal Trade Commission's Truth in Lending Regulations. One common problem it sees are in advertisements for loans for "0% Down". If a dealer advertises "0% Down" they are not required to also disclose the APR and the formula showing (amount or % down), (# of months) payments at ($) per (month, week, etc.) at (%) APR, the agency says in a news release.

However if the advertisement says "0% Down for X months", APR and the formula above must be included in the advertisement. The terms of repayment ("X months") is considered a "trigger" term and thereby requires this additional information in the advertisement.

The MVDB says it sees many dealer advertisements for "0% Down" with the number of monthly payments included without the full disclosure. When the agency reminds the dealers of this requirement, they are puzzled at the fact that if they advertise "0% Down" and not mention the number of months, the advertisement complies with federal and state regulations and if they include the number of months, they are not in compliance.

The MVDB asks that media members working with motor vehicle dealer clients try to be sure that when they advertise "0% Down", they do so in a way that is compliant with state and federal regulations. (The FTC penalty for noncompliance is up to $11,000.)

To see and print the Virginia Advertising laws, regulations and information on Truth in Lending/Trigger Terms, go to our Web site at http://www.mvdb.virginia.gov and "click" on "Advertising" in the left hand column. If you have any questions or comments, call 804-367-1100: ext 3002.