Pub. 15 2016-2017 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 13 new jersey auto retailer W W W . N J C A R . O R G “special Internet pricing” remains where it has been, with the OCP clinging to the idea that once any price is advertised anywhere, on any medium, every po- tential customer is entitled to that price. The only viable “workaround” has been to design website interfaces in which an “advertised price” appears on an initial screen, and some input or interaction is required from the consumer before a special Internet “quote” is transmitted to the customer. Thus far, the OCP appears to be amenable to the interpretation that because of the requirement for customer interaction before it is transmitted, this “quote” is an initial negotiation offer, and not an “advert ised price.” At any rate, it remains important to remember that Internet “advertisements,” and this means every inventory list that you make available on the Internet, are governed by the same advertising rules that govern traditional print and broadcast ads. Doc Fees continue to be a constant target for consumer protection advocates, with at least one proposal always being dis- cussed by Legislators to establish a limit or maximum amount, as is the case in both New York and Pennsylvania. Given that both of our neighbor states have adopted maximum doc fee laws (and both set quite low) , just maintaining the status quo here in New Jersey is a victory. 2017 only promises more of the same, but no major change is likely through the current gubernatorial term. While there has been little traction for a frontal attack on doc fees, State regula- tors (and the plaintiffs’ bar) have found an indirect means of attack— through the advertising regulations. It has been the general practice of the industry not to in- clude “doc fees” in the “advertised price” of vehicles. However, the advertising regulations set forth the exact wording of a mandatory disclosure which must be included in all advertisements. This disclosure states “Price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees, and taxes.” The term “doc fees” is not present in the disclaimer which, strictly speaking, must be set forth verbatim. Since they are not included in the exclusion, the argument goes, they must be included in the price. At this point, NJ CAR advises that doc fees should be disclosed, either in a vehicle’s advertised price or in a sepa- rate disclosure. An additional benefit to adopting this practice is that it assists in resisting proposals for a mandatory cap on doc fees. Full disclosure allows market forces to come to bear, ensuring doc fees remain reasonable. Recall Issues The Takata airbag and Volkswagen/Audi diesel debacles are not over yet, and will continue to be an issue in 2017. Current law forbids the sale of NEW vehicles that are subject to an “open” NHTSA safet y recal l and have not yet been repaired. However, several measures have been proposed in the New Jersey Legislature involving recalls, includ- ing one that would ban all sales, new and used, of vehicles affected by an open recall. Another would require dealerships to give priority to certain customers in performing recall work. Thus far, NJ CAR has successf ul ly worked to educate lawmakers as to the enormous impact these measures would have on automotive commerce and the retail industry, and so far we have pre- vailed. It should be noted that this does not mean dealers are free to sell unsafe motor vehicles. Under New Jersey law, there is clearly an obligation to disclose any recall affecting a vehicle to the buyer. The Consumer Fraud Act’s requirement to disclose any defect or condition that would be considered “material” to a pur- chase decision clearly applies to an open recall affecting the vehicle. The issue of “special internet pricing” remains where it has been, with the OCP clinging to the idea that once any price is advertised anywhere, on any medium, every potential customer is entitled to that price. COMPLIANCE REPORT  continued on page 15