Does company have to sell car at low price listed in ad?

June 27, 2013 18:27 by Consumer Ed

Dear Consumer Ed:

While looking online to find a low priced car, I found a car listed at a price of $22.  Does the company have to sell it to me at that price?

Consumer Ed says: 

Generally, advertised vehicles must be sold at or below the advertised price.  While advertisements are not generally considered offers, it might be sufficient to create a contractual offer if someone is advertising a specific car at a specific price.  If it is an offer, then a consumer should be able to give the seller the advertised price and create a contract.  But, if an offer has a mistake in it, the seller may be able to withdraw the offer.  If the advertised price was unreasonable and obviously a mistake, as it would seem a price of $22 for a car would be, then the mistake would most likely mean that the seller does not have to sell the car to you at that price. 

However, if you inform the company about the advertisement, and it doesn’t correct the price within a reasonable time frame, then the company gives the appearance that it is attempting to deceive the consuming public.  It’s possible that the company is employing a technique known as “bait and switch,”  an advertising scheme in which products are offered without an intention to sell them in order to establish contact with consumers and get them to switch to a different (usually higher-priced) product.  This is unlikely given the unreasonably low price of the car; but if you think something is amiss, then you can submit a complaint to the Governor’s Office of Consumer Protection by visiting www.consumer.ga.gov, or calling 404-651-8600.  You can also contact the FTC by visiting www.ftc.gov, or calling 1-877-FTC-HELP (1-877-382-4357).

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Is it legal for a car dealer to charge a fee for dealer services?

May 21, 2013 22:42 by Consumer Ed

Dear Consumer Ed:

My daughter purchased a car and the dealer charged her $599 for dealer services.  I heard this is not legal, but the dealer says it is.  She paid it because the car was such a good deal.  Do we have any recourse?

Consumer Ed says:

Subject to a very significant qualification, car dealers are generally allowed to charge “dealer services” fees.  Different dealers use different names for these types of fees—“administrative fees,” “document fees,” “processing fees,” “dealer fees,” “customer service fees,” etc. There is no statutory cap on the amount of such fees that dealers are allowed to charge. 

However, there’s a very important condition:  Even though dealers are allowed to charge these extra fees, if the vehicle is advertised, then they must be included in the advertised price of the vehicle.

For example, let’s say a dealer runs an online or newspaper advertisement showing a particular car on its lot for sale at a price of $10,000.  If you go to the lot to purchase the car, the dealer cannot then charge you an additional $500 for document fees or other such fees, which would cause the price to become $10,500.  What the dealer can legally do is charge $9,500 for the car and $500 for the document fees (which would then equal the total advertised price $10,000).  Other types of fees/charges that MUST be included in the advertised price of vehicles include freight charges, transportation charges, destination charges, dealer preparation charges, overhead charges, and any other terms of similar import.

The only fees that are not required to be included in the advertised price are government fees, which include tax, tag, title, Georgia Lemon Law, and Warranty Rights Act (“WRA”) fees. 

If you believe a car dealer has charged you unfairly based upon the advertised price, you can file a complaint with the Governor’s Office of Consumer Protection by calling (404) 651-8600 or going to our website at www.consumer.ga.gov.

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Mechanic warranties on car repairs

May 7, 2013 17:53 by Consumer Ed

Dear Consumer Ed: 

I took my car to a mechanic for repairs. I chose the business based on an advertisement in a local magazine, which stated that there was a 6-month warranty on all engine jobs.  The car cost over $2200 to repair.  After I had the car for 3 weeks, it broke down. Now the shop states that they will fix it, but I will be charged for labor. Do I have any recourse in this situation?

Consumer Ed says: 

It depends on what the advertisement in the magazine actually stated about the warranty, and what terms were in your service agreement with the mechanic.  If the warranty only covered parts, then you would still have to pay for labor.  If the warranty covered parts and labor or just labor, then you shouldn’t have to pay for labor, and might have a breach of contract claim against the mechanic.  Even if you don’t have a clear breach of contract claim (for example, you didn’t have a written service agreement, or the warranty terms in the agreement were ambiguous as to what was covered), you could still have a valid legal claim if the mechanic promised a warranty on labor in the advertisement.

If the advertisement about the warranty didn’t clearly say what it would cover, the mechanic may have engaged in an unfair and deceptive business practice, which is prohibited by Georgia’s Fair Business Practice Act (“FBPA”). In keeping with the FBPA, all advertisements should be in plain language, truthful and accurate, and free of express or implied claims that misrepresent or are otherwise deceptive.  Additionally, any necessary qualifying information must be clearly and conspicuously disclosed in the ad.  If you believe that the ad for the warranty was deceptive, you can submit a complaint to the Governor’s Office of Consumer Protection by calling 404-651-8600, or visiting our interactive website at www.consumer.ga.gov.

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