What’s New

The new and used automotive market could soon experience market conditions not seen since the COVID pandemic. It has been widely reported that the recent imposition of tariffs on imported automobiles will likely produce upward market pressure on prices, whether because of direct OEM pricing actions, increased demand for non-affected vehicles, or a reduction of the supply of vehicles at pre-tariff MSRPs.

There can be potential legal and regulatory pitfalls when higher vehicle prices are advertised to consumers, particularly if an advertisement attributes the higher prices to specific causes, such as the government’s imposition of tariffs. This does not mean that dealers cannot adjust the prices of their vehicles in response to market conditions and advertise their new prices — but they should be cautious when advertising new prices and, if they chose, when attributing price increases to specific causes.

The Federal Trade Commission Chairman recently stated that the agency will be watching companies closely if there is any price fixing among competitors or unlawful behavior on pricing due to tariffs.

Why It Matters 

Dealers are free to set and advertise prices for new or used vehicles at whatever level they believe the market dictates, provided that such pricing complies with applicable law as well as any contractual obligations and restrictions. Dealers should consult an attorney familiar with federal, state and local law to ensure all advertisements are legally sufficient. And, of course, competing dealers should always set their prices independently and not through coordination with other dealers.

Tell Me More

The FTC considers the definition of “advertisement” to be very broad and includes commercial messages in any medium. This definition encompasses much more than print, website or online advertisements; indeed, social media, text messages, emails and other forms of communication could all be considered advertisements.

As a result, dealers should exercise caution in communicating a price for a vehicle in any format or circumstance that links that price to the imposition of tariffs. For example, a dealer should not state that a particular portion of a vehicle’s price is attributable to a tariff paid on that vehicle unless that fact is known by the dealer to be true.

A related issue that the FTC has focused on in recent enforcement actions is misrepresenting vehicle prices in advertisements by advertising a low vehicle price and later adding previously undisclosed fees as a customer goes through the buying process.

Dealers are also reminded to not coordinate with each other regarding any aspect of how they price the vehicles they offer for sale and should not agree either (1) to add a standard price increase to vehicles due to tariffs or (2) to include a standard gross profit on vehicle sales. These actions are anticompetitive practices prohibited by law.

What’s Next

NADA presented a webinar on Complying with Federal Advertising Laws at Your Dealership on April 22, 2025. To learn more about the webinar and about protecting your dealership and pricing vehicles fairly and accurately, visit nada.org.

Go Deeper

NADA offers a variety of compliance resources to dealers, including a Dealer Guide to Federal Advertising Requirements. Visit nada.org to learn more.