On September 15, 2026, the Federal Trade Commission (FTC) released its Automobile Industry Pricing Transparency FAQs, providing new guidance for automobile dealers regarding advertised prices, mandatory fees, rebates, discounts, optional products, and other advertising practices. The guidance follows the FTC’s issuance of Warning Letters earlier this year to 97 automobile dealership groups regarding potentially deceptive pricing practices and provides additional insight into how FTC staff views automobile advertising under the Federal Trade Commission Act (FTC Act).
For California dealers, the guidance is particularly significant because the FTC specifically addresses mandatory document fees and takes a position that may affect advertising practices permitted under California law. In California, certain charges, including a dealer document processing charge, are permitted to be excluded from an advertised vehicle price when accompanied by statutorily prescribed disclosures. The FTC has now directly addressed state document fee laws and reiterated its position that the advertised price must include dealer-required charges, regardless of state law.
The FTC also notes that the FAQs represent the view of FTC staff and are not binding on the public or the Commission. Nevertheless, the guidance provides dealers with important insight into how FTC staff currently interprets and intends to apply federal prohibitions against deceptive automobile pricing.
Advertised Prices Must Reflect Dealer-Required Charges
The FTC’s central position is that an advertised vehicle price should represent the price that any consumer can pay to purchase the vehicle. If a dealer requires a consumer to pay a particular fee as a condition of purchasing the vehicle, the FTC states that the fee should be incorporated into the advertised price.
Government-required charges paid by the consumer, such as applicable taxes, may generally be excluded. However, according to the FTC, a charge does not become government-required simply because state law permits a dealer to impose it or pass it along to a consumer.
The FTC states that these principles apply across advertising channels, including dealership and third-party websites, social media, print advertisements, signs, telephone calls, and text messages.
As an example, if a vehicle is being offered at $44,999, the advertised price (with the Doc Fee, Emissions Testing Charge, and electronic filing charge included) would be framed as follows:
Price: $44,999
Doc Fee: $85
Emissions Testing Charge: $50
Electronic Filing Fee: $37
Total Price: $45,621
The disclaimer language would then include the statutorily approved language from Cal. Veh. Code § 11713.1(c)(2), but modified to state: “Plus government fees and taxes and any finance charges.” The Section 11713.1 language can be further modified should additional fees be included in the price and removed from the categories stated in this language. The example includes the Doc Fee, Emissions Testing Charge, and Electronic Filing Fee as those are fees authorized by statute for a dealership to collect from a consumer, but not necessarily required fees to be paid by a consumer.
California Document Fees Present an Important Compliance Issue
The FTC expressly addresses mandatory document fees and states that they should be incorporated into the advertised vehicle price. The agency even provides an example involving an $85 document fee—the amount commonly applicable to California dealerships under Cal. Veh. Code § 4456.5.
This is significant because Cal. Veh. Code § 11713.1(c)(2) permits California dealers advertising a vehicle price to use prescribed language stating that the advertised price excludes certain charges, including a dealer document processing charge.
The FTC takes the position that state document-fee laws do not alter the federal requirement that an advertised price include dealer-required charges. California dealers should therefore carefully review how document processing charges are incorporated into advertised prices and how California-required or permitted disclosures interact with the FTC’s state interpretation of federal law. Specifically, the FTC expects that the document charge be included in the advertised price.
The Actual Price Should Be the Most Prominent Price
The FTC also emphasized how prices are presented. When an advertisement displays multiple amounts, the price available to any consumer should be the most prominent.
Dealers may still display MSRP, rebates, financing incentives, and other discounts. However, conditional prices should not overshadow the price available to consumers who do not qualify for those incentives.
For example, a dealer may advertise a first-responder or dealer-financing discount, but the FTC states that the generally available vehicle price should remain the most prominent amount. Prominent depends not only on font size, but also on placement, surrounding language, and the advertisement’s overall presentation.
Dealers should therefore review both vehicle detail pages and inventory search results to determine how consumers are likely to perceive the prices displayed.
Optional Products, Vehicle Availability, and Third-Party Advertising
The FAQs also address several related dealership practices.
Optional products and services may be offered, but dealers should not represent optional products as mandatory, misstate their cost, or charge consumers for products they did not agree to purchase. These issues are particularly relevant in California as the state’s Combating Auto Retail Scams (CARS) Act becomes operative on October 1, 2026.
The FTC also cautions dealers regarding vehicle availability. Vehicles that are in transit or located offsite may be advertised, but their location should be accurately disclosed. Dealers should likewise avoid using unavailable vehicles to attract consumers and then steering them toward higher-priced alternatives.
Finally, dealerships should review advertisements published by website providers, inventory-management companies, OEM programs, and other third parties. The FTC states that parties exercising control over automobile advertising may bear responsibility for ensuring that pricing information is accurate and prominently displayed. Dealers should therefore consider not only the information transmitted to vendors, but also how that information ultimately appears to consumers.
California Dealers Should Review Advertising Practices Now
The FTC characterizes these pricing principles as existing obligations under Section 5 of the FTC Act rather than new requirements. The September FAQs nevertheless provide substantially greater detail regarding how FTC staff believe those principles apply to automobile advertising.
For California dealers, the timing is notable. Dealerships are simultaneously preparing for the California CARS Act to become operative on October 1, 2026, Dealers should consider reviewing their advertising and sales practices for mandatory fees, document processing charges, conditional discounts, optional products, vehicle availability, and third-party advertising.
Madison Law advises automobile dealers and other automotive businesses regarding advertising, regulatory compliance, consumer claims, and related legal matters. Please feel free to contact us to discuss the FTC’s automobile pricing guidance or California CARS Act.
James S. Sifers, Esq.
jsifers@madisonlawapc.com