Administrative Code

Virginia Administrative Code
Title 24. Transportation and Motor Vehicles
Agency 20. Department of Motor Vehicles
1/25/2020

Chapter 110. T&M Vehicle, Trailer, and Motorcycle Dealer Advertising Practices and Enforcement Regulations

Part I
General Provisions

24VAC20-110-10. Intent.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 1.1, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.

24VAC20-110-20. Definitions.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 1.2, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.

Part II
Regulated Advertising Practices

24VAC20-110-30. Practices.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 2.1, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.

Part III
Enforcement

24VAC20-110-40. Administrative and civil penalties.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 3.1, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.

24VAC20-110-50. Appeals.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 3.2, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.

24VAC20-110-60. Other enforcement.

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.

Statutory Authority

§§ 46.2-1991, 46.2-1992.85, and 46.2-1993.82 of the Code of Virginia.

Historical Notes

Derived from VR485-60-8901 § 3.3, eff. March 29, 1990; amended, Virginia Register Volume 13, Issue 8, eff. February 5, 1997.



Website addresses provided in the Virginia Administrative Code to documents incorporated by reference are for the reader's convenience only, may not necessarily be active or current, and should not be relied upon. To ensure the information incorporated by reference is accurate, the reader is encouraged to use the source document described in the regulation.

As a service to the public, the Virginia Administrative Code is provided online by the Virginia General Assembly. We are unable to answer legal questions or respond to requests for legal advice, including application of law to specific fact. To understand and protect your legal rights, you should consult an attorney.