Special Report: Understanding Car Dealer Advertising Laws

I have stated many times that one of the reasons I started The Car Pro Show 24 ½ years ago was to call attention to the good car dealers of our country, but also to keep people from shopping with the bad dealers. I see it all the time-people fall for a bait & switch price, or a price that includes rebates many people don’t qualify for. The newest deception involves an advertised price somewhere, including on the dealer’s website, that doesn’t include dealer “add-ons” that are already on the car. This is not revealed until deep in the process of buying and by then, people are worn down and they relent. They also just validated the dishonest behavior of that dealer, and guess what? The dealer keeps doing it because it works. Simply put, you are aiding and abetting an illegal act.

I took a look at the advertising laws in Texas and California, our two largest listening areas and will break them down for you. If you choose not to shop with one of my Car Pro Certified Dealers, and you run across a dealer that breaks the law, I tell you below where to turn them in and give I even give you the specific statutes to cite.

Perhaps together, we can make life harder on bad car dealers, and in turn, help the good men and women who do it right, with honor, integrity, and truthfulness.

Vehicle advertising is regulated in both Texas and California to prevent false, misleading, or deceptive practices. While both states share similar consumer-protection principles, California generally applies stricter “all-in pricing” standards. Below is a breakdown of the major rules, statutory authority, and how consumers can file complaints if they believe a violation has occurred.

Factory Rebates

TEXAS

Texas regulates motor vehicle advertising under:

• Texas Occupations Code § 2301.651(a)(2) (prohibits false, misleading, or deceptive advertising)
• 43 Tex. Admin. Code § 215.250 (advertising rules for franchised dealers)

If an advertised price includes factory rebates with eligibility requirements — such as loyalty, military, college graduate, or captive finance incentives — those qualifications must be clearly disclosed. Advertising a price that assumes universal eligibility may be considered misleading under § 2301.651.

CALIFORNIA

California regulates dealer advertising under:

• California Vehicle Code § 11713.1
• California Vehicle Code § 11713
• California Code of Regulations, Title 13, § 260.04

If a rebate is conditional, the qualifying criteria must be clearly disclosed. Advertising a headline price that includes rebates most consumers do not qualify for may violate § 11713.1(e).

Dealer-Installed Items

TEXAS

Under Texas Occupations Code § 2301.651 and 43 Tex. Admin. Code § 215.250:

If a dealer installs items on a vehicle prior to sale and not at the customer’s request, those items are not considered optional for advertising purposes. They must be included in the advertised price. Representing them as optional may constitute false or misleading advertising.

CALIFORNIA

Under California Vehicle Code § 11713.1(e):

The advertised price must include all mandatory dealer-installed items. Only government fees, taxes, finance charges, and emissions testing charges may be excluded. If a consumer cannot realistically decline a pre-installed add-on, it must be included in the advertised price.

“Advertised Price Excludes Optional Dealer Installed Items”

TEXAS

Stating that the advertised price excludes optional dealer-installed items — when those items are already installed — may violate Texas Occupations Code § 2301.651 and 43 Tex. Admin. Code § 215.250. The advertised price must reflect the vehicle as offered.

CALIFORNIA

California’s “single price” requirement under Vehicle Code § 11713.1(e) requires inclusion of all mandatory dealer-installed items in the advertised price. Failure to do so may constitute unlawful advertising.

How to File a Complaint

TEXAS

The Texas Department of Motor Vehicles (TxDMV) regulates licensed motor vehicle dealers.

If a consumer believes a dealership has violated advertising laws:

1. Gather documentation: screenshots of the advertisement, emails, purchase order, buyer’s order, and any written disclosures.
2. Attempt resolution with dealership management.
3. File a complaint with TxDMV.

Complaints may be submitted online through the Texas Department of Motor Vehicles Consumer Complaint page at TxDMV.gov under “Motorists” → “File a Complaint.”

Consumers may also contact:

Texas Department of Motor Vehicles
Enforcement Division
P.O. Box 26417
Austin, Texas 78755
Phone: (888) 368-4689

TxDMV has authority under Texas Occupations Code Chapter 2301 to investigate, assess administrative penalties, and suspend or revoke dealer licenses.

Consumers may also file complaints with the Texas Attorney General’s Office under the Texas Deceptive Trade Practices Act (DTPA), Texas Business & Commerce Code Chapter 17.

CALIFORNIA

In California, complaints regarding dealer advertising can be filed with:

California Department of Motor Vehicles
Investigations Division

Consumers may submit complaints online through the California DMV website under “File a Complaint Against a Dealer.” Forms may also be mailed to the local DMV Investigations office.

Required documentation includes:

• A copy of the advertisement
• The purchase agreement
• Any written communications
• Proof of payment

The California DMV has enforcement authority under Vehicle Code §§ 11713 and 11713.1, including administrative penalties and license action.

Consumers may also file complaints with:

California Attorney General’s Office
Public Inquiry Unit

Additionally, advertising violations may fall under California’s Unfair Competition Law (Business & Professions Code § 17200), which allows civil enforcement actions.

The Bottom Line

In both Texas and California:

• Conditional OEM rebates must disclose qualifications.
• Pre-installed dealer add-ons must be included in the advertised price if mandatory.
• Advertising cannot be structured to create a misleading “headline” price.

If a consumer believes the advertised price did not reflect the real price of the vehicle offered, both states provide formal complaint processes with regulatory agencies that have authority to investigate and impose penalties.

Advertising laws exist so buyers can know the real price before stepping into a showroom. If that doesn’t happen, there are regulators who take that seriously.