Proposed Text
CHAPTER 110
T&M VEHICLE, TRAILER, AND MOTORCYCLE DEALER ADVERTISING PRACTICES AND
ENFORCEMENT REGULATIONS (REPEALED)
Part I (Repealed)
General Provisions
24VAC20-110-10. Intent. (Repealed.)
In the 1989 Acts of the Virginia General Assembly it was
found that it is in the interest of the consuming public and legitimate motor vehicle
dealers to insure that the advertising of motor vehicles is honest, fair, and
clear and that deceptive or misleading advertising of the retail sales of motor
vehicles as described in Motor Vehicle Dealer Advertising, Article 9 (§
46.2-1580 et seq.) of Chapter 15 of Title 46.2 of the Code of Virginia should
be prohibited. In the 1995 Acts of the Virginia General Assembly it was found
that it is in the interest of the consuming public and legitimate T&M
vehicle, trailer, and motorcycle dealers to insure that the advertising of
motor vehicles is honest, fair, and clear and that deceptive and misleading
advertising of the retail sales of vehicles as described in T&M Vehicle
Dealer Advertising, Chapter 19 (§ 46.2-1900 et seq.) of Title 46.2 of the Code
of Virginia; Trailer Dealer Advertising, Chapter 19.1 (§ 46.2-1992 et seq.) of
Title 46.2 of the Code of Virginia; and Motorcycle Dealer Advertising, Chapter
19.2 (§ 46.2-1993 et seq.) of Title 46.2 of the Code of Virginia should be
prohibited. Therefore, the following regulations are promulgated to administer
the administrative and civil penalties necessary for enforcement of prohibited
advertising practices.
24VAC20-110-20. Definitions. (Repealed.)
The following words and terms when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:
"Act" means Chapters 19 (§ 46.2-1900 et seq.), 19.1 (§ 46.2-1992 et seq.), and 19.2 (§ 46.2-1993 et seq.) of Title 46.2 of the Code of Virginia.
"Administrative penalties" means the denial, suspension or revocation of a license as allowed in §§ 46.2-1986, 46.2-1992.80, and 46.2-1993.77 of the Act and based on one or more of the grounds specified in §§ 46.2-1985, 46.2-1992.79, and 46.2-1996.76 of the Act.
"Advertiser" means same as licensee.
"Civil penalty" means the monetary assessment imposed by the commissioner against a licensee not to exceed $1,000 for any single violation of §§ 46.2-1900, 46.2-1992.84, and 46.2-1993.81 of the Code of Virginia.
"Commissioner" means the Commissioner of the Department of Motor Vehicles of this Commonwealth.
"Department" means the Department of Motor Vehicles of this Commonwealth.
"Disclaimer" means those words or phrases used to provide a clear understanding or limitation to an advertised statement but not used to contradict or change the meaning of the statement.
"Disclosure" means a statement in clear terms of the dollar amounts, time frames, down payments and other terms which may be needed to provide a full understanding of credit terms, periodic payment, interest rates, time payment plans, etc.
"License" means the document issued to a Virginia motor vehicle dealer and which permits such dealer to engage in the business of buying and selling new and used motor vehicles or used motor vehicles only.
"Licensee" means any person, partnership, association, corporation or entity which is required to be licensed as a motor vehicle dealer in this Commonwealth.
"Line-make marketing group" means an association of motor vehicle dealers franchised to sell and advertise the same line-make of new motor vehicles.
"Motorcycle" means every motor vehicle designed to travel on not more than three wheels in contact with the ground, except any vehicle included within the term "farm vehicle" or "moped" as defined in § 46.2-100 of the Code of Virginia.
"Motor vehicle" means a T&M vehicle, trailer, and motorcycle.
"New motor vehicle" means a vehicle which meets all of the following criteria. The new motor vehicle has:
1. Had limited use necessary in moving or road testing the vehicle prior to delivery to a customer;
2. Been transferred by a manufacturer's or distributor's certificate of origin which is the document provided by the manufacturer of a new motor vehicle, or its distributor to its franchised motor vehicle dealer;
3. The manufacturer's or distributor's certification that it conforms to all applicable federal motor vehicle safety and emission standards;
4. Not been previously sold by a dealer except for the purpose of resale and when the exchange is between franchised dealers of the same line-make;
5. Not been used as a rental, driver education, or demonstration motor vehicle; and
6. Not been used for the personal and business transportation of the manufacturer, distributor or dealer or any of their employees.
"Repossessed vehicle" means a vehicle which meets all of the following criteria. It has:
1. Been sold, titled, registered, and taken back from a purchaser; and
2. Not yet been resold to an ultimate user.
"Sale" means there is a significant reduction from the advertiser's usual and customary price of a motor vehicle and the offer is for a limited period of time.
"T&M vehicle" means motor homes and travel trailers as defined in § 46.2-1900 of the Code of Virginia.
"Trailer" means every vehicle without motive power designed for carrying property or passengers wholly on its own structure and for being drawn by a motor vehicle, including semitrailers but not mobile homes, sales of which are regulated under Chapter 4.2 (§ 36-85.16 et seq.) of Title 36 of the Code of Virginia, and not (i) watercraft trailers as defined in this section or (ii) travel trailers as defined in § 46.2-1900 of the Code of Virginia.
"Used motor vehicle" means any vehicle other than a new motor vehicle as defined in this chapter.
Part II (Repealed)
Regulated Advertising Practices
24VAC20-110-30. Practices. (Repealed.)
For purposes of this chapter, a violation of the following
regulated advertising practices shall be an unfair, deceptive, or misleading
act or practice.
A. New motor vehicle. A motor vehicle shall not be
advertised as new, either by word or implication, unless it is one which
conforms to the definition of a "new motor vehicle" as defined in
24VAC20-110-20.
B. Used motor vehicle.
1. The fact that a motor vehicle is used should be clearly
and unequivocally expressed by the term "used" or by such other term
as is commonly understood to mean that the vehicle is used. For example,
"special purchase" by itself is not a satisfactory disclosure;
however, such terms as "demonstrator" or "former leased and/or
rental vehicles" used alone clearly express that they meet the definition
of a used vehicle for advertising purposes. When in doubt, the dealer should
provide more information or simply say "used."
2. Once a certificate of origin as defined in §§ 46.2-1900,
46.2-1992, or 46.2-1993 of the Code of Virginia has been assigned to a
purchaser, the motor vehicle becomes a used vehicle and must be advertised as
such.
C. Finance charges or interest rates advertisements.
1. Advertisements of finance charges or other interest rates
"below market" (or words to that effect) shall not be used unless it
is manufacturer or distributor sponsored or substantiated by a written
agreement with the finance source.
2. Advertisement of finance charges or other interest rates
shall not be used when there is a cost to buy-down said charge or rate which is
passed on, in whole or in part, to the purchaser.
D. Terms, conditions, and disclaimers.
1. When terms, conditions or disclaimers are used, they
shall always be stated clearly and conspicuously. An asterisk or other
reference symbol may be used to point to a disclaimer or other information;
but, the disclaimer shall not be used as a means of contradicting or changing
the meaning of an advertised statement. In addition, they must meet the Federal
Trade Commission Truth in Lending Act Requirements 15 USC §§ 1601 et seq., 12
CFR 226 (Regulation Z) or the Federal Trade Commission Truth in Leasing Act
Requirements, as applicable.
2. In all printed media, where terms, conditions or
disclaimers are used, they shall be clearly and conspicuously visible and
printed in not less than 6-point upper case type print. When billboards,
portable signs, posters, etc., are used, all terms, conditions or disclaimers
need to be displayed and phrased in a manner which is clear and conspicuous.
3. In radio ads, where terms, conditions or disclaimers are
used, they shall be clearly announced during the ad. They must be explained
clearly and at an understandable speed and volume level.
4. In television ads, where terms, conditions or disclaimers
are used, they shall be clearly and conspicuously displayed or announced, or
both, during the ad. They shall be at an understandable speed or understandable
volume level, or both.
E. Sale or sales. The expiration date of an advertised
"sale" shall be clearly and conspicuously disclosed. If the sale
exceeds 30 days, the advertiser should be prepared to substantiate that the
offering is indeed a valid reduction and has not become his regular price.
F. "List price," "sticker price,"
"suggested retail price." These terms and similar terms shall be used
only as follows:
1. In reference to the manufacturer's or distributor's
suggested retail price for new vehicles; or
2. The dealer's own usual and customary price for used
vehicles.
G. "Cost" and "invoice price" terms.
1. "At cost," "below cost," "$ off
cost" shall not be used in advertisements because of the difficulty in
determining a dealer's actual net cost at the time of sale.
2. "Invoice price," "$ over invoice,"
may be used, provided that the invoice referred to is the manufacturer's
factory invoice, distributor's invoice, or a bona fide bill of sale, as
applicable, and that it is available for customer inspection.
3. "Manufacturer's factory invoice" or
"distributor's invoice" means that document supplied by the
manufacturer or the distributor listing the manufacturer's or distributor's
charge to the dealer before any deduction for items such as holdback, group advertising,
factory incentives or rebates, or any governmental charges.
H. Price or credit terms of advertised vehicles. When the
price or credit terms of a vehicle are advertised in print, radio, or
television, the vehicle should be fully identified as to year, make, and model.
In addition, in all advertisements placed by individual dealers and not
marketing groups, the stated price or credit terms shall include all charges
which the buyer must pay to the seller including "freight" or
"destination charges." If there are deferred payments on credit sales
where accrued finance charges are ultimately charged to the consumer for any
part of the deferred period, then these charges must be clearly stated. State
and local fees and taxes need not be included in the stated price. If the buyer
will be required to pay to the seller charges which increase the advertised
price, the charges must be disclosed and priced in the advertisement.
I. Matching or bettering competitor's price ads.
Advertisements which set out a policy matching or bettering a competitor's
price shall not be used unless the terms of the offer are specific, verifiable,
and reasonable. All terms of the offer shall be included in the disclosure and
disclaimer area and may not say such things as "rules or terms available
in showroom" or "available before delivery." You must fully
disclose as a part of the ad any material or significant conditions which must
be met or the evidence the consumer must present to take advantage of the
offer.
J. Advertisements of dealer rebates shall not be used.
Offers to match down payments or guarantee minimum trade-in allowances are
forms of dealer rebates.
K. "Free," "at no extra cost" terms. In
a negotiated sale no "free," "at no cost" (or any words to
that effect) offer of equipment, accessory, other merchandise or service, shall
be made. No equipment, accessory, other merchandise or service shall be
described as "free" or "at no cost," if its cost, or any
part of its cost, is included in the price of the vehicle, or if the vehicle
can be purchased for a lesser price without accepting the free offer, or if a
purchase is required in order to receive the free offer.
L. "Bait advertising" shall not be used.
1. The purpose of this section is to ensure that customers
will be informed the vehicle is in limited quantity or availability. If a
specific vehicle is advertised, the seller shall be in possession of a
reasonable supply of said vehicles and they shall be available at the
advertised price. If the advertised vehicle is available only in limited
numbers or only by order, that shall be stated in the ad. The listing of
vehicles by stock numbers or vehicle identification numbers is permissible and
is one means of satisfactorily disclosing a limitation of availability, provided
a separate number is used for each vehicle. For new vehicles, if the offer is
limited, you will be able to say such things as "in stock" or
"will order" provided you can order the vehicle just as advertised
and delivery can be assured as soon as the manufacturer or distributor can
confirm the order and deliver it to your dealership. If you cannot get an order
confirmation within 30 days, you must refund all moneys collected from the
buyer at his request. If the vehicle is available only by order then it must be
clearly and conspicuously disclosed in the advertisement.
2. Advertising a vehicle at a certain price (including
"as low as" statements), but having available for sale only vehicles
equipped with dealer added cost "options" which increase the selling
price above the advertised price, may also be considered "bait
advertising."
3. If a lease payment is advertised, the fact that it is a
lease arrangement shall be disclosed.
M. The term "repossessed vehicle" shall not be
used unless the full criteria of the definition in 24VAC20-110-20 is met.
Advertisers offering such vehicles for sale shall provide proof of repossession
upon request.
N. "Finance" or "loan." Words such as
"finance" or "loan" shall not be used in a motor vehicle
dealer advertiser's firm name or trade name, unless that person is actually
engaged in the financing of motor vehicles.
O. "Special arrangement or relationship"
advertisements. Statements such as "big volume buying power,"
"manufacturer's outlet," "factory authorized outlet," and
"factory wholesale outlet," shall not be used. Any term that gives
the consumer the impression the dealer has a special arrangement with the
manufacturer or distributor as compared to similarly situated dealers, is
misleading and shall not be used.
P. Records retention. Advertisers shall maintain the
original or a clear facsimile copy of all ads in a manner that permits
systematic retrieval for a period of 60 days subsequent to the expiration date
of the advertisement.
Part III (Repealed)
Enforcement
24VAC20-110-40. Administrative and civil penalties. (Repealed.)
A. Violations of any regulated advertising practice may, in
the discretion of the commissioner, be addressed by a written warning to the licensee
as an initial step in the enforcement process.
B. Any single violation of a regulated advertising practice
may also, after an informal fact finding proceeding as provided in the
Administrative Process Act, § 9-6.14:1 et seq. of the Code of Virginia, result
in an assessment of a civil penalty up to $1,000.
C. Subsequent, same or similar violations may, after an
informal fact finding proceeding as provided in the Administrative Process Act,
§ 9-6.14:1 et seq. of the Code of Virginia, result in an assessment of a civil
penalty up to the $1,000 and may also be grounds for denying, suspending or
revoking a license subject to the hearing requirements pursuant to §§
46.2-1986, 46.2-1992.80, and 46.2-1993.77 of the Act, either or both.
24VAC20-110-50. Appeals. (Repealed.)
The action of the department in suspending, revoking or refusing any license or in imposing a monetary civil penalty against the licensee shall be subject to judicial review as provided in §§ 46.2-1987, 46.2-1992.81, and 46.2-1993.78 and §§ 46.2-1988, 46.2-1992.82, and 46.2-1993.79 of the Act.
24VAC20-110-60. Other enforcement. (Repealed.)
This chapter and the provisions of Article 9 (§ 46.2-1990 et seq.) of Chapter 19, Article 9 (§ 46.2-1992.84 et seq.) of Chapter 19.1, and Article 9 (§ 46.2-1993.81 et seq.) of Chapter 19.2 of Title 46.2 of the Code of Virginia shall be in addition to and not a substitute for the powers and authority granted pursuant to the provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.) or of any other provision of the Code of Virginia.