Buying a car is one of the largest financial transactions most consumers will ever make. Yet car pricing can be a confusing area of retail commerce — layered with sticker prices, dealer discounts, manufacturer incentives, trade-in credits, financing terms, add-on products and taxes that can leave buyers uncertain about what they are paying.

Regulators at the federal and state levels have taken notice. The Federal Trade Commission (FTC), state attorneys general and motor vehicle licensing agencies have all increased scrutiny of how dealerships present and disclose vehicle prices. Non-compliance can result in regulatory investigations, consent orders and civil penalties, as emphasized by the FTC’s March 13, 2026, warning letters sent to 97 motor vehicle dealers across the United States.

While we have been waiting on the FTC to provide additional guidance, as of the preparation of this article, they have not yet provided any. Consequently, we are limited to the March letters and a one-hour webinar (albeit informative) for guidance. Nevertheless, aside from a few practical changes, the legal basis for the changes lies in the FTC’s concepts of “deceptive” and “misleading,” which have been defined for many years.

What Is the “Total Price”?

When a consumer hears a price quoted in an advertisement, on a website or in the showroom, they typically believe they are being told what the purchase will cost them. If additional charges occur at signing that were not disclosed or included in the quoted price, the consumer may be confused or feel misled if the price increases. This is what the FTC is attempting to prevent.

The FTC emphasized that the “total price,” which must be the most prominent price displayed or mentioned in an advertisement, must include the price of the new or used vehicle, all non-government fees, and any mandatory add-on products or charges. The FTC made it very clear that the West Virginia documentary fee qualifies as a “non-government fee” and therefore must be included in the total price. (This is a significant change to past practice in West Virginia, which was previously not questioned or considered improper or illegal.)

Mandatory add-on items, for example, might include dealer-added running boards, bed liners and covers, paint and fabric protection and any other add-ons that are not optional and that the consumer must pay to buy the motor vehicle. Again, if it is mandatory for a customer to purchase them, those items must be included in the “total price.”

Optional voluntary protection products offered by the dealer do not qualify as mandatory add-ons. Examples of genuinely optional items include extended service contracts, paint protection products, GAP insurance and similar aftermarket add-ons, provided the customer is free to decline them. For example, if you are selling a voluntary protection product and have a 90% penetration rate, the FTC could use that rate as evidence that the product or service is not “optional.” Similarly, dealer-added items (nitrogen in tires, window tint, paint sealant, etc.) that appear on a vehicle’s addendum sticker must be disclosed, and their cost must be included in the total price for that motor vehicle.

The Problem With Stacking Incentives in Advertised Prices

Manufacturer incentives are a major part of vehicle pricing in the modern market. Handled properly, they are a powerful and legitimate sales tool. Handled poorly, they become a source of regulatory and legal exposure and risk to a dealer’s reputation. Manufacturers frequently offer multiple incentive programs simultaneously; a loyalty bonus, military discount, college graduate rebate and regional sales incentive might all be available at the same time. If a consumer must qualify for all four incentives to pay your advertised price for a vehicle, that price must be accompanied by clear disclosures and displayed less prominently than the all-in “total price.”

The general rule is that an incentive can only be included in an advertised sales price if it is available to 100% of customers. Other incentives can be used in the advertisement, but they must be clearly stated as “optional” or “potentially available.” While you may advertise a lower price, that price must be less prominent than the actual “total price” that every consumer can expect to pay.

Another area that can cause advertising compliance issues is subvented financing and special APR offers. In lieu of cash rebates, manufacturers may offer below-market interest rates through their captive finance arm, and the customer typically must choose one or the other. In this case, a dealer should avoid including the cash rebate in the “total price,” even if available to 100% of consumers. If a consumer chooses the lower APR, that consumer’s purchase price would differ from the price that includes the rebate. If you do want to advertise the cash rebate as an option for customer savings, you could do so after advertising the more prominent “total price.”

Establish a Compliant Disclosure Process

Never forget that a dealership is considered legally responsible for its advertisements. It does not matter whether an ad comes from the manufacturer or a third-party agency; truly, the buck stops with the dealership.

Good disclosure is not just about avoiding regulatory or legal trouble; it is a sales and reputation asset. Customers who feel they understand exactly what they are paying and why are more likely to complete the transaction, return for service, provide referrals and post positive reviews.

To ensure compliance with the FTC’s “total price” guidelines, consider establishing a written policy on advertising. NADA has a Fair Pricing Compliance Guide, and many third-party vendors offer products and services to assist motor vehicle dealers with compliance. Of course, dealers should also retain knowledgeable legal counsel to review proposed advertisements. A 15-minute attorney review can be a wise investment.

Train your sales team in what must be disclosed and how. Every salesperson and finance manager should be able to explain every line on the price disclosure document in plain English. Establish “bright line” rules for how price, incentives and voluntary protection products must be disclosed. We all appreciate the legal exposure created by a poorly run F&I department, regardless of our intent to operate a trustworthy operation for the public.

Although not legally required, consider presenting the customer with a clear one-page summary before any financing discussion begins, showing: vehicle selling price, voluntary protection products purchased, all fees, all applicable taxes, all incentives applied and their conditions, and the resulting total out-of-pocket price. Have the customer sign or initial it.

Audit your advertising regularly. Review all advertisements, including digital, broadcast, print and social media, to ensure that: (a) advertised prices reflect vehicles in your inventory, (b) all conditions on advertised prices and incentives are clearly stated, and (c) fine print does not contradict or undermine the total price.

Update your processes when incentives change. Manufacturer incentive programs change monthly. Assign someone the responsibility of ensuring that pricing, advertising and sales team training are up to date with active programs. Make sure your third-party vendors are responsive to your requested changes and properly include the West Virginia documentary fee and mandatory add-ons in the total price.

Review your add-on process. Make a list of every product or charge that appears in a typical transaction. For each, ask: Is this mandatory? If it is, it must be included in the total price. For optional charges, ensure they are clearly presented as such, with a clear opportunity to decline.

Transparency Is the Goal

The underlying principle behind all pricing disclosure requirements is simple: Tell customers what they are paying for and why before they commit. Customers who feel informed and respected are your dealership’s best long-term asset.

The dealerships facing regulatory action are, in almost every case, those that treated price transparency as an obstacle to closing deals rather than a foundation for building them. The ones with the strongest reputations — and the cleanest regulatory records — are those that have treated transparency as a competitive advantage, not a burden.

Straight talk on price is not just the right approach from a compliance standpoint; it is the right approach for earning customer trust that will support your business for years to come.

Remember, every dealer must follow these new advertising guidelines. I do appreciate that they represent a significant change in practice for our West Virginia dealers, but I am always impressed by the dealer body’s ability to adapt and implement new procedures effectively and appropriately.

As always, your West Virginia Automobile Dealer Association and its team are ready and willing to assist you with this effort.