Wisconsin has two main laws—one a statute and one an administrative rule—that specifically address advertising and representations in automobile sales. A statute is a law passed by the legislative branch. An administrative rule is a regulation—that has the force of law—issued by a state agency to implement or interpret specific legislation.
The Wisconsin statute governing advertising and representations in automobile sales, Wis. Stat. § 218.0116(1), is found in Wis. Stat. Chapter 218, which regulates motor vehicle dealers, salespersons, and sales finance companies, among other things.
Wis. Stat. § 218.0116(1) also governs other aspects of automobile sales in Wisconsin, such as the requirement that dealerships be closed on Sundays, the sale of finance contracts and the fitness of auto dealerships and salespersons to conduct business.
The Wisconsin administrative rule governing advertising and representations in automobile sales, Wis. Admin. Code § Trans. 139.03, is found in Wis. Admin. Code Chapter Trans. 139, which regulates a variety of motor vehicle trade practices, including the written disclosures an auto dealer must provide consumers related to an automobile’s use history and condition, automobile purchase contracts, financing and satisfaction of liens, among other things.
I. Wisconsin Statute Governing Advertising and Representations in Automobile Sales
Wis. Stat. § 218.0163(2) allows any retail buyer or lessee suffering damages based on an auto dealer or salesperson’s violation of certain subsections of Wis. Stat. § 218.0116(1) to bring a court action to recover his or her damages and costs, including reasonable attorney fees. Those subsections include, but are not limited to, the following:
- Willfully defrauding any retail buyer or lessee
- Willful failure to perform any written agreement with any retailer buyer or lessee
- Having made a fraudulent sale, consumer lease, prelease agreement, transaction or repossession
- Fraudulent misrepresentation, circumvention or concealment of any information that is required to be stated or furnished to the retail buyer or lessee
- Employment of fraudulent devices, methods or practices in connection with repossession, redemption and resale of automobiles
- Having engaged in any unconscionable practice related to the sale or lease of automobiles
- Having engaged in “bushing,” the practice of increasing the selling price of an automobile above that originally quoted to a purchaser as evidenced by a purchase order or contract which has been signed by the purchaser and auto dealer
- Willful failure to comply with any administrative rule promulgated by the Wisconsin Department of Transportation, including those under Wis. Admin. Code Chapter Trans. 139
- Having violated any provision of Wis. Stat. §§ 421-427, otherwise known as the Wisconsin Consumer Act
The acts and omissions identified in Wis. Stat. § 218.0116(1), above, are broad in scope and prohibit a wide array of fraudulent auto sales conduct, including making untrue representations. Several of the statutory prohibitions—such as “willfully defrauding,” “fraudulent misrepresentation” and “engaged in any unconscionable practice”—are expansive in nature and could arguably encompass almost any type of nefarious sales tactic or activity.
II. Wisconsin Administrative Rule Governing Advertising and Representations in Automobile Sales
Wis. Admin. Code § Trans. 139.03 is the Wisconsin administrative rule governing advertising and representations in automobile sales. This administrative rule applies to the sale or lease of any automobile by an auto dealer to a person within the state of Wisconsin if the automobile is delivered within the boundaries of the state, notwithstanding any contractual agreement between the dealer and person to the contrary.
Any retail buyer or lessee suffering damages based on a dealer’s or salesperson’s violation of this administrative rule is entitled to recover his or her damages and costs, including reasonable attorney fees, pursuant to Wis. Stat. § 218.0163(2). This is because, as noted above, it is a violation of Wis. Stat. § 218.0116(1) to willfully fail to comply with any Department of Transportation administrative rule, such as Wis. Admin. Code § Trans. 139.03.
Wis. Admin. Code § Trans. 139.03 addresses fifteen separate topics related to automobile advertising and sales representations. The topics include a wide range of activities from truthfulness in advertising to vehicle availability to advertisement of sales prices to the use of specific sales phrases. The topics are as follows:
- The use of false, deceptive or misleading advertising or representations by any dealer or salesperson to induce the purchase of an automobile is an unfair practice and is prohibited
- An auto dealer must maintain detailed evidence of any statement of fact made to the public in any advertisement or written statement concerning the automobiles the dealer offers for sale or the services the dealer provides
- An auto dealer’s use of terms such as “largest” when referring to dealership size must be based solely on vehicle sales volume
3. Disclosures Required When Advertising Price
- When the price of an automobile is advertised by an auto dealer, the advertised price must include all charges that shall be paid by the purchaser to acquire ownership of the automobile, with the exception of sales tax, title and registration fees
- The advertised price does not need to include the amount of the service fee if the advertisement clearly and conspicuously discloses that the advertised price does not include the optional service fee
- An auto dealer’s use of terms such as “invoice,” “cost,” or similar terms, when advertising the price of an automobile, is an unfair practice and prohibited, unless the advertisement discloses the dealer’s actual cost is less because there are, or may be, factory holdbacks, rebates, incentives or other discounts to the dealer, if that is the case
- When an auto dealer has a sales promotion on a used automobile, and a sales price is stated in an advertisement related to the automobile, the sales price stated in the advertisement must be disclosed on the vehicle during the sales promotion
4. Trade-in Allowance
- No specific price shall be stated in an advertisement as an offer for a trade-in, if the price is contingent upon the condition, model or age of the prospective purchaser’s vehicle to be traded
- Use of phrases such as “up to” or “as much as” in relation to trade-in allowances is an unfair practice and is prohibited
5. Used Vehicle Comparative Savings
- The use of manufacturer suggested retail prices, wholesale or retail dealer pricing guides or similar price guides to advertise comparative savings for used automobiles—other than demonstrators or executive automobiles—is an unfair practice and prohibited, except that an automobile pricing guide may be used if the use of the guide as the source of the pricing is stated in any required disclosure and the dealer makes the documentation used to set the price available in writing to the customer
6. Free Merchandise
- It is an unfair practice to use the word “free,” or any other word or words of similar import, in any advertising, if receipt of the free merchandise, equipment, accessories or service is condition on the purchase of a vehicle or related accessories
7. Establishing Price
- Use of phrases such as “write your own deal,” “name your own price,” and “appraise your own vehicle” is an unfair practice and is prohibited
- In reference to used automobiles, other than demonstrator and executive automobiles, the use of phrases such as “last of the remaining,” “close-out,” “final clearance,” “clearance,’ and similar phrases is an unfair practice and prohibited, unless the auto dealer is actually discontinuing business
- In reference to demonstrator, executive and new automobiles, the use of phrases such as “last of the remaining,” “close-out,” “final clearance,” “clearance,’ and similar phrases is an unfair practice and prohibited, unless the auto dealer is not replacing the automobiles with similar automobiles of the same model year, or is actually discontinuing business
9. Vehicle Availability
- It is an unfair practice for an auto dealer to advertise automobiles for sale unless the dealer has available, for delivery within a reasonable time, a quantity of the advertised automobiles sufficient to meet reasonably anticipated demands, unless the advertisement clearly and specifically discloses any limitations as to the quantity available or time of delivery
10. Name and Address
- Auto dealers and salespersons are prohibited from advertising automobile sales at an address or from listing a phone number or email address other than that of the licensed dealership premises or temporary sales location authorized by Wis. Admin. Code § Trans. 139.08
11. New Vehicles
- Only franchised dealers, distributors and manufacturers may advertise or sell new automobiles
12. Model Year and If Used
- When advertising any automobile for sale, an auto dealer or salesperson must state the automobile’s model year and identify whether the automobile is used
- An auto dealer’s reference to “low mileage,” “X-miles,” “one-owner,” “demonstrator,” “executive” or other similar words shall serve to designate the automobile as used
13. Expiration Terms of Sales or Promotions
- Whenever an auto dealer advertises a sale or promotion where gifts, merchandise, equipment, accessories, service, discounts, price reductions or cash is offered, the dealer must disclose the expiration terms or date of the sale or promotion
14. Two or More Damaged Vehicles
- Whenever an auto dealer advertises a sale or promotion involving two or more automobiles damaged as a result of the same incident, the dealer must disclose the cause of damage
15. Flood or Water Damaged Vehicles
- Whenever an auto dealer offers, promotes the sale of, or sells a flood or water damaged automobile, all advertising relating to that automobile shall disclose that the automobile has been flood or water damaged
Like Wis. Stat. § 218.0116(1), the acts and omissions identified in Wis. Admin. Code § Trans. 139.03 prohibit a wide array of fraudulent auto sales conduct, including making untrue representations. The biggest difference between the two laws is that many of the administrative rules regulate very specific activities, such as the use of particular phrases when selling automobiles, whereas the statute is much broader in nature.
In sum, Wis. Stat. § 218.0116(1) and Wis. Admin. Code § Trans. 139.03, afford consumers who purchase a vehicle in Wisconsin a broad array of protections related to the advertising and representations made in automobile sales. If a Wisconsin auto dealer or salesperson makes untrue, deceptive or misleading statements in order to induce a customer to purchase an automobile, the consumer has the ability under these laws to sue the dealership or salesperson and to recover damages and costs, including attorney fees.
Visit my article, “Auto Dealer Fraud and Wisconsin’s Fraudulent Representations Statute,” to learn about a more general law—Wis. Stat. § 100.18(1), a statute prohibiting untrue, deceptive, or misleading statements or representations in the sale of almost all goods and services—that may also be worth considering in the automobile sales context.