Bait and Switch Advertising for Car Dealerships and Consumer Fraud


Bait and Switch Advertising is not allowed

New Jersey has specific regulations prohibiting bait and switch advertising as applied to car salesmen: advertising a car with no intention of selling it at the advertised price, which is shown by the refusal to show, sell or display the car as advertised; or taking a deposit on the advertised car while switching the customer to a higher-priced car.

This is a common dealer tactic. Many times they will start talking the car down even before you see it. Many times the car will never be shown to you as they are very clever to steer you away form this advertised priced car. This car either 1) does not exist; 2) has already been sold; or 3) provides little if any profit for the dealer so they put in another "deal." Do your research and be smart. If this is the car you want, insist to see the car and insist on purchasing the car. If the car has been sold insist on getting this in writing from the salesman. Document your conversations.

In short,when a car is advertised at a specific price you must sell the car at that price or have written permission switching the consumer to another car.

The point of these regulations is to address the volumes of advertisements you see in every newspaper, each advertisement being bigger and containing grander promises (e.g., $99 down and $99 per month).

If you look carefully at these newspaper advertisements you will see many times that they are for one specific car, and not on all cars. Maybe the special deal is only for customers who have 50% to put down on a car or have fantastic credit, all probably disclosed in small print on the bottom of the page with an asterisk or some other insignificant notation.

The dealer’s intention is to drive traffic to the dealership at any cost before you go to another dealership and buy a car from somebody else. They assume that once they get you down to the store they can get you into any car. This is part of the sales process.

Bait and switch advertising is specifically prohibited under New Jersey law. New Jersey law does not condone, encourage or otherwise permit this type of deceptive business practice and this type of deceptive advertising.

New Jersey law recognizes and accepts that advertising is a significant portion of the automotive industry with regard to the marketing of used and new vehicles. There are very specific limitations and prohibitions on advertising for new and used car dealers.

Legislative oversight is significant and codified in the Administrative Code. The Administrative Code places exhaustive and numerous limitations on the types of advertising that dealers can undertake to sell and market used and new vehicles. These regulations work on the assumption that the selling dealers are fully familiar with the nature and extent of their obligations under New Jersey law. New Jersey courts have recognized that the seller of used the new vehicles must be fully familiar with the nature and extent of that the administrative code and the rules with regard to advertising and marketing of vehicles. This is the reason that if a selling dealership who was selling either used or new vehicle violates the administrative code they are deemed strictly liable or responsible for any loss occurring as a result of that advertisement. The Administrative Code provides an authority for consumers upon which they can rely to demonstrate that the dealer’s conduct is inherently deceptive and inherently illegal. The consumer need only demonstrate an ascertainable loss associated with the deceptive or misleading advertising for which they purchased or attempted to purchase the vehicle. It is this ascertainable loss which is recognizable and recoverable under New Jersey law in addition to triple damages and attorney’s fees and costs. As previously stated the New Jersey Consumer Fraud Act provides extensive remedies including injunctive relief for dealers that engage in deceptive advertising practices. Pain switch advertising practice is deemed a deceptive practice under New Jersey law and specifically defined. However definition under New Jersey law and the administrative code is not the only method by which a selling dealer can advertise in a deceptive fashion.

Consumer Lawyer The Law Office of Jonathan Rudnick LLC