AMVIC is now offering module four: advertising from the mandatory Salesperson Fair Trading Act Course at no cost.

The advertising course covers the laws and regulations that apply to automotive advertisements and will help suppliers and advertisers improve compliance with advertising laws.

Want to complete the full course? Register for AMVIC’s Salesperson Fair Trading Act Course. Other topics include legislation and how it applies to everyday business practices, researching a vehicle and the laws that apply to consignment transactions.

Click play to view the advertising course. Once you have completed the module you can test your knowledge in the practice quiz below.

Want to learn more about the laws that apply to automotive advertisements? AMVIC has an advertising checklist, examples of compliant ads and more practice quizzes available at amvic.org/advertising

 

Practice quiz:

*Note: Click on the Answer section to reveal the correct answer to the question.*

1. Advertisers are defined in the Fair Trading Act as:

a) A person who publishes, print, distributes, broadcasts or telecasts an advertisement on behalf of someone else.
b) The business or salesperson that places the ad.

Answer

a) Advertisers are defined in the Fair Trading Act as a person who publishes, prints, distributes, broadcasts or telecasts an advertisement on behalf of someone else.

2. A supplier is:

a) A person who publishes, print, distributes, broadcasts or telecasts an advertisement on behalf of someone else.
b) The business or salesperson that places the ad.

Answer

b) The business or salesperson that places the ad. Suppliers are defined in the Fair Trading Act as a person who promotes the use or purchase of goods or services.

Answer

a) True.

Section 11(2)(a) of the Automotive Business Regulation states that: “A business operator must ensure that every advertisement for an automotive business that promotes the use or purchase of goods or services states whether the vehicle pictured in the advertisement is or is not the specific vehicle that is for sale.”

Answer

b) False.

Section 11(2)(k) of the Automotive Business Regulation states that: “A business operator must ensure that every advertisement for an automotive business that promotes the use or purchase of goods or servicesdoes not offer a guaranteed trade-in allowance for any vehicle regardless of make, year or condition.”

Answer

a) True.

An advertisement is a public announcement advertising goods or services and all automotive advertisements must comply with all legislation including the Fair Trading Act and regulations.

6. Juanita is preparing an advertisement for her dealership. She includes this line: “Buy any new car and get a set of four winter tires for free.”

The retail value of the tires is between $650 and $1,000 however Juanita is only adding $150 to the price of the car so she feels it is a really good deal. Plus, if someone does not want the tires she will give them a $150 discount.

Should Juanita add or remove anything from the ad to make it comply with the rules and regulations?

a) Yes, she should add the retail value of the tires: $650- $1,000.
b) No, she does not need to add or remove anything to make it comply.
c) Yes, she should add that a $150 discount is available if tires are declined.
d) Yes, she should remove “free” and replace it with “$150”.

Answer

d) Juanita should remove “free” and replace it with “$150”. The Automotive Business Regulation 11(2)(g) states that advertisements must “not use the words, or words similar to, “savings”, “discount”, “percentage off the purchase price”, “free”, “invoice price”, “below invoice”, “dealer’s cost”, “at cost” or a price that is a specified amount above or below invoice or cost unless the claims represented by the words can be substantiated.”

 

Explanation:

Juanita would be in violation of the Automotive Business Regulation by advertising the tires as “free” because the tires are not in fact free. The tires add either $150 to the overall purchase price, or will reduce the overall price by the same amount. Because the tires are not truly free, they cannot be advertised as such.

7. Giuseppe has a one-year-old car on the lot with low kilometres, no collision history and great curb appeal.

He lists it at $26,500. Before he posts it online, someone walks in and buys it for $26,500 plus tax. The transaction goes quickly because there are no outstanding liens and the buyer pays in full with a certified cheque.

Giuseppe is pretty sure he will get a similar car on the lot soon so he posts the ad even though the car just sold. In the meantime, he plans to show any interested buyers, similar cars.

Has Giuseppe contravened the regulations?

a) No, the advertised price is accurate so he didn’t do anything wrong.
b) Yes, he should not have placed the ad because it was not available for sale at the time the ad was placed.
c) No, but he should have priced the car higher because it sold so quickly at $26,500.
d) Both a and c

Answer

b) Yes, he should not have placed the ad because it was not available for sale at the time the ad was placed. The Automotive Business Regulation section 12(a) states a business must not make any representations, statements or claims that are not true or are likely to mislead a consumer. Section 11(2)(m) states an advertisement must include the stock number of the specific vehicle that is advertised as being available for sale at the time the ad is placed. If he is advertising a vehicle he does not have then he does not have a stock number for it.

 

Explanation:

Giuseppe placed the ad even though he was aware that the car was no longer available. In doing so, Giuseppe mislead consumers.

8. Sam is preparing a newspaper ad for a 24 month lease, zero down, $299/month on a silver 2015 Simple Sedan that has been sitting on his lot for months.

$1,000 is due at the end of the lease. 19,000 km/year allowance. He also includes a photo of the Simple Sedan.

What other information, besides what is above, does he need to include in the ad?

a) The APR (interest rate), charges for exceeding kilometre allowance and stock number.
b) Name of the business and AMVIC logo or text to indicate business is AMVIC licensed, the APR (interest rate), stock number and charges for exceeding kilometre allowance.
c) The APR (interest rate), charges for exceeding kilometre allowance, indicate whether the vehicle pictured is or is not the specific vehicle that is being offered, total cost of the vehicle, name of the business, stock number and AMVIC logo or text to indicate business is AMVIC licensed.
d) Name of the business, indicate whether the vehicle pictured is or is not the specific vehicle that is being offered, the APR (interest rate), charges for exceeding kilometre allowance, stock number and AMVIC logo or text to indicate business is AMVIC licensed.

Answer

c) Cost of Credit Disclosure Regulation, Section 18(1)(c), (d), (f), (g) apply. As well as the Automotive Business Regulation section 11 (1)(a)(b) and 11(2)(a)(l)(m).

 

Explanation:

If advertising a lease, refer to section 18 of the Cost of Credit Disclosure Regulation to be sure all information that is required to be disclosed is included in the ad and do not forget the Advertising Code of Conduct requirements for all ads under section 11 of the Automotive Business Regulation.

9. What if Sam is preparing the ad for radio instead of newspaper?

He is advertising a 24 month lease, zero down, $299/month on a silver 2015 Simple Sedan that has been sitting on his lot for months. $1,000 is due at the end of the lease. 19,000 km/year allowance.

Assuming the information above is included in the ad, which of the following is an inclusive list of the other information that must be included in the ad.

a) The APR (interest rate) or toll-free number or reference to a publication to get that information, name of the business, AMVIC logo or text to indicate business is AMVIC licensed, stock number and the all-in or total cost of the vehicle.
b) The APR (interest rate) or toll-free number or reference to a publication to get that information, name of the business, stock number and the all-in or total cost of the vehicle.
c) The APR (interest rate) or toll-free number or reference to a publication to get that information, name of the business, AMVIC logo or text to indicate business is AMVIC licensed, charges for exceeding kilometre allowance, stock number and the all-in or total cost of the vehicle.
d) The APR (interest rate) or toll-free number or reference to a publication to get that information, name of the business, charges for exceeding kilometre allowance, stock number and the all-in  or total cost of the vehicle.

Answer

b) The Automotive Business Regulation section 11(1)(a) and 11(2)(l)(m) apply. Additionally, the Cost of Credit Disclosure Regulation section 18(2) applies.  The rules and regulations that apply to advertising a lease are different depending on the type of advertisement.

10. Janelle is creating an online ad using a template provided by the online marketplace.

Where it asks for the price, she decides to enter the monthly payment amount instead of the total price of the vehicle.

She then types up a paragraph explaining financing is offered at an interest rate as low as 3 per cent. She also includes the business name, AMVIC logo, specifies the vehicle pictured is the one for sale and lists the vehicle stock number.

Why does Janelle’s ad not comply with the advertising rules and regulations?

a) The ad offers credit so she must also include the term, the total cost of the vehicle and the total cost of credit if non-finance charges apply.
b) The ad offers credit so she must also include the term.
c) The ad is misleading because the monthly payment amount is misrepresenting the price of the vehicle.
d) Both a and c.

Answer

d) Both a and c.

In the Automotive Business Regulation Section 12(l) and the Cost of Credit Disclosure Regulation, Section 6 apply.

The price must reflect the all-in total cost of the vehicle, not the monthly payment amount. Since the ad offers credit, fixed credit rules apply.