Oregon Administrative Rules › Chapter 137 - DEPARTMENT OF JUSTICE › Division 20 - MISLEADING PRICE REPRESENTATIONS › Section 137-020-0020 - Motor Vehicle Price and Sales Disclosure

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Purpose: The purpose of this rule is to
			 declare as unfair or deceptive in trade or commerce certain motor vehicle
			 pricing and sales practices. Nothing in this rule, or the administrative rules
			 to which it applies, modifies or diminishes the applicability of exemptions or
			 limitations on enforcement of the Oregon Unlawful Trade Practices Act,
			 including, but not limited to, those specified in ORS 646.605 and 646.612.
(2) Definitions: For purposes of
			 this rule, the following definitions shall apply:
(a) "Advertisement," including the terms
			 "advertise" and "advertising," means any oral, written, pictorial or graphic
			 notice given in a manner designed to attract public attention and includes, but
			 is not limited to, public broadcasts, mailings, publications, internet sites,
			 other internet applications, email, facsimiles and published notices. It
			 includes, but is not limited to, any statement or representation made in a
			 newspaper, magazine, or other publication; made on radio, television or
			 internet; made by instant messaging or text messaging; appearing in any notice,
			 handbill, sign, billboard, banner, poster, display, circular, pamphlet, flyer,
			 catalog, letter, direct mail piece, or other printed material; or contained in
			 any window sticker, price tag, or other point-of-sale display. Advertisement
			 does not include oral or written communications relating to the negotiation of
			 a specific transaction initiated by a consumer;
(b) "Advertiser" means the person on whose
			 behalf any advertising material is published and includes the advertising agent
			 (if any) used by the advertiser;
(c) "Advertising agent" means any person who
			 produces, promotes or assists in the sale, production, or placement of any
			 advertisement or participates in a sales event directly or through its
			 employees or agents, on behalf of any person;
(d) An "average" person, viewer or listener
			 means a person other than one allied with or employed by the motor vehicle
			 industry;
(e) "Broker" means a
			 motor vehicle broker as defined by ORS 822.047;
(f) "Buy-down rate" means a financing rate
			 which, due to a dealer's payment of finance charges to a third party, is below
			 the prevailing market financing rate;
(g) "Buy-rate" means the lowest interest rate
			 quoted to a dealer or broker by a financial organization for which a consumer
			 qualifies, based upon the consumer's credit history;
(h) "Capitalized cost" means the amount the
			 offeror places on a vehicle as the vehicle's value for the purpose of offering
			 the vehicle for lease to the public, not including any capitalized cost
			 reductions or taxes, title, license fees, lease acquisition, Department of
			 Environmental Quality fees, document processing fee, insurance premiums,
			 warranty charges, and any other product, service, or amount amortized in the
			 lease. The capitalized cost for the purpose of this definition is the
			 equivalent of the "offering price" for the purchase of a motor vehicle in a
			 sales transaction;
(i) "Capitalized
			 cost reduction" means the total amount of any rebate, cash payment, net
			 trade-in allowance or non-cash credit that reduces the capitalized
			 cost;
(j) "Clear and conspicuous,"
			 including the terms "clearly" and "conspicuously," means that a message,
			 statement, information, representation or term is conveyed in a manner that is
			 readily noticeable, will be easily understood by the average person, and is in
			 a meaningful sequence. In order for a message to be considered "clear and
			 conspicuous," it shall, at a minimum:
(A) Not
			 contradict or substantially alter any terms it purports to clarify, to explain
			 or to which it otherwise relates;
(B) Be in direct proximity to the message,
			 statement, information, representation or term it clarifies, modifies or
			 explains, or to which it otherwise relates;
(C) Use abbreviations or terms only if they
			 are commonly understood by the average person or approved by federal or state
			 law;
(D) In the case of radio
			 advertising:
(i) Include the information
			 required to be disclosed by law and all disclaimers, conditions and limitations
			 shall be spoken with sufficient deliberateness, clarity, speed and volume so as
			 to be audible and understandable by the average radio listener;
(ii) Not be obscured by sounds which
			 interfere with or distract from the disclosure; and
(iii) Provide all necessary information
			 regarding leases. Any information required in radio advertising by the Federal
			 Consumer Leasing Act and Oregon law and administrative rules shall be deemed to
			 be clear and conspicuous if the advertisement complies with  15 USC sec. 1667c(c)  and also discloses the capitalized cost of the lease.
(E) In the case of television
			 advertising:
(i) Include the information
			 required to be disclosed by law and shall be completely disclosed audibly,
			 visually, or using a combination thereof;
(ii) If a visual message, be presented
			 unobscured by other images and in a size and time sufficient to allow an
			 average viewer to read with reasonable ease;
(iii) If an audible message, be presented
			 with sufficient deliberateness, clarity, and volume so as to be understood by
			 the average television listener unobscured by other sounds which interfere with
			 or distract from the disclosure;
(iv) Have as a minimum height for required
			 superimposed written copy ("super") in a television advertisement or
			 advertisements in any other audio-visual medium:
(I) For Standard Definition Television - no
			 less than 22 video scanlines for capital and lower case letters together, or no
			 less than 18 video scanlines for use of capital letters only;
(II) For High Definition Television - no less
			 than double the scanlines required for Standard Definition Television; and
(III) The supers must appear on
			 the screen for a duration sufficient to allow a viewer to have a reasonable
			 opportunity to read and understand the statement, representation or term.
(v) Be sufficient if the
			 super on-screen display time is no less than three seconds for the first line
			 of text and one second for each additional line. This is a rebuttable
			 presumption.
(F) In the
			 case of printed advertising:
(i) Include the
			 information required to be disclosed by law and shall be in direct proximity to
			 the terms it purports to clarify, to explain or to which it otherwise relates;
			 and
(ii) Be of sufficient
			 prominence in terms of print style, size and contrast as compared with the
			 remainder of the advertisement so as to be readily noticeable to an average
			 person in the audience to whom it is directed. Print size which is 8 point type
			 or larger in display advertisements which are less than 200 square inches in
			 size or print size which is 10 point type or larger in display advertisements
			 which are larger than 200 square inches in size shall be rebuttably presumed to
			 be of sufficient size to be readily noticeable.
(G) In the case of internet advertising:
(i) Include the information required to be
			 disclosed by law near, and when technologically possible, on the same screen as
			 the triggering claim;
(ii) Use text
			 or visual cues to direct consumers to scroll down a Web page when it is
			 necessary to view information;
(iii) When using hyperlinks to lead to
			 information required to be disclosed by law:
(I) Ensure that hyperlinks are obvious;
(II) Ensure that hyperlinks
			 appropriately convey the importance, nature and relevance of the information
			 they lead to;
(III) Include
			 consistent hyperlink styles and format;
(IV) Ensure that all hyperlinks are placed in
			 direct proximity to relevant information; and
(V) Ensure that hyperlinks take consumers
			 directly to the information on the click-through page.
(iv) Be displayed prominently prior to
			 purchase;
(v) Be prominently
			 displayed so the information is noticeable to consumers in relation to the
			 size, color and graphic treatment of other parts of the Web page;
(vi) Repeat information on lengthy Web sites
			 when there are multiple or repeated claims;
(vii) Include audio disclosures when audio
			 claims are made on the Web site and the audio disclosures must be presented in
			 a volume and speed so that consumers can hear and understand them;
(viii) Include visual disclosures that are
			 displayed for a duration sufficient for consumers to notice, read and
			 understand them; and
(ix) Use clear
			 language and syntax in such a manner that an ordinary consumer can understand
			 the information required to be disclosed by law.
OFFICIAL COMMENTARY:
Each advertisement shall be
				evaluated for its overall impression. The public should not have to weigh each
				word, hunt for the hidden meaning of each statement, or search for
				inconspicuous disclaimers. Advertisements which place material disclosures in
				small print, or inconspicuously bury material at the bottom of the
				advertisement are not clear and conspicuous. If on the other hand, the
				information does not materially change, limit or alter the offer being made, it
				can be placed at the bottom of an advertisement.
15 USC sec. 1667c(c)  allows certain required lease disclosures
				to be given to a consumer in a radio advertisement by referring the audience to
				either a toll free telephone number or a written advertisement that appears in
				a publication in general circulation in the community served by the radio
				station on which such advertisement is broadcast. All lease advertisements on
				the radio must include the following disclosures to comply with Oregon and
				Federal law: that the transaction advertised is a lease; the total amount of
				any initial payments required on or before consummation of the lease or
				delivery of the property, whichever is later; the number, amounts, due dates or
				periods of scheduled payments, and the total of such payments under the lease;
				and the capitalized cost.
(k) "Dealer" means a person who buys, sells,
			 trades or exchanges, leases, displays or offers to buy, sell, trade or exchange
			 motor vehicles either outright or by means of any conditional sale, bailment,
			 lease, security interest, consignment or otherwise or who is a broker. "Dealer"
			 does not include any person excluded by ORS 822.015;
(l) "Document processing fee" means any
			 monies or other thing of value, which a dealer charges to prepare, submit or
			 prepare and submit documents pursuant to ORS 822.043;
OFFICIAL COMMENTARY:
Oregon law and administrative
				rules permit dealers to elect to prepare, submit, or prepare and submit
				documents necessary to issue or transfer a certificate of title for a vehicle;
				register a vehicle or transfer registration of a vehicle; issue a registration
				plate; verify and clear a title; perfect, release or satisfy a lien or other
				security interest; comply with federal security requirements; or render any
				other services for the purpose of complying with state and federal laws related
				to the sale of a vehicle. For providing this service, dealers may charge a
				purchaser of a vehicle a fee for the preparation of those documents, not to
				exceed the amount established by ORS 822.043. This fee is always negotiable;
				otherwise it could be classified as a tax. A dealer can process the documents
				without charging a fee. In addition to the document processing fee, dealers may
				offer consumers the option of electronically filing their title and
				registration documents using an integrator. Dealers may charge consumers an
				additional fee for this service. Consumers must knowingly agree to pay the
				additional fee for this electronic filing service. If a consumer does not agree
				to pay the additional fee for the electronic filing service, a dealer may still
				electronically submit title and registration documents at no additional cost to
				the consumer.
(m)
			 "Extension sticker" means a label (other than a Monroney sticker or other label
			 bearing the manufacturer's suggested retail price), affixed to a new motor
			 vehicle, displaying the offering price of the motor vehicle;
(n) "False advertisement" means any
			 advertisement which is false, misleading or deceptive in a material respect. In
			 determining whether any advertisement is false, misleading or deceptive, not
			 only representations made or suggested by statement, word, design, device,
			 sound or any combination thereof will be taken into account, but also the
			 extent to which the advertisement fails to reveal facts material in light of
			 representations made;
(o)
			 "Financial Organization" means any person who finances a sale or lease of a
			 motor vehicle for a third party or purchases a retail installment contract from
			 a dealer;
(p) "Manufacturer" means
			 any entity which:
(i) Manufactures or
			 assembles new motor vehicles for sale or distribution;
(ii) Distributes new motor vehicles through
			 franchised dealerships;
(iii) Is
			 engaged in the business of importing new motor vehicles for sale or
			 distribution to dealers, through distributors, or to factory branches; or
(iv) Is a subsidiary of a
			 manufacturer including one that offers motor vehicle financing.
(q) "Manufacturer's Suggested
			 Retail Price" or "MSRP" means the Monroney price, or if there is no Monroney
			 sticker, then the total price of the vehicle after all factory installed
			 options and factory costs have been added together, less any option package
			 savings offered by the manufacturer;
(r) "Monroney sticker" means the label
			 required by the Automobile Information Disclosure Act,
			 15 USC
			 1232;
(s) "Motor Vehicle" means any self-propelled
			 vehicle normally obtained for personal, family, or household purposes,
			 including all terrain vehicles, snowmobiles, self-propelled motor homes,
			 personal watercraft, boats and, for the purposes of this definition, any motor
			 home, recreational vehicle or trailer pulled by a self-propelled vehicle. Motor
			 vehicle does not include aircraft;
(t) "Negative equity" means the amount by
			 which an existing lien on a trade-in vehicle exceeds the true market value of
			 the trade-in vehicle;
OFFICIAL COMMENTARY:
In layman's terms, if a
				consumer has negative equity on his/her vehicle, it means the consumer owes
				more on the vehicle than it is actually worth. While the "true market value" of
				a vehicle may vary, it can be determined by using a motor vehicle price guide
				trade publication and the average sale price of the vehicle at regional vehicle
				auctions. While these publications are relevant, they are not determinative.
				Depending upon the supply and demand for a given vehicle, it could be worth
				more or less than its "book" value.
(u) "Negative equity adjustment" means an
			 amount which is added to both the purchase or lease price of a vehicle and the
			 trade-in allowance for the trade-in vehicle in a transaction;
(v) "Offering price" means the full cash
			 price for which a dealer will sell or lease a motor vehicle to every consumer
			 or member of the general public without exception, excluding only taxes,
			 license and registration costs, Department of Environmental Quality (DEQ) fees
			 and a document processing fee;
OFFICIAL COMMENTARY:
Examples of correctly
				calculated offering prices are as follows:
(A) A car's MSRP is $10,000, license and
			 registration are $100, undercoat is $100, dealer-added options are $2,000 and
			 the document processing fee is $115. A financial organization offers a $1,000
			 rebate to qualified consumers. The offering price of the vehicle is $12,100.
			 The offering price cannot include the $115 document processing fee or the
			 $1,000 rebate that is not available to all consumers without exception.
(B) A motorcycle's MSRP is $5,000,
			 license and registration are $50, delivery, assembly and setup costs the dealer
			 $250, custom accessories are $500 and the document processing fee is $115. The
			 offering price of the vehicle is $5,750. The costs of delivery, assembly, setup
			 and all accessories must be included in the offering price in any advertisement
			 or quoted offering price given during the sales negotiation of the motorcycle
			 and cannot be added in as fees or extras after the selling price of the
			 motorcycle is agreed upon between the dealer and consumer. The advertised
			 offering price does not need to include the license and registration or
			 document processing fee. While the dealer may choose to prepare title and
			 registration documents and may charge a fee for this service, nothing in this
			 or any other rule requires a dealer to charge any document processing fee.
			 Whether the consumer will pay any fee for this service and, if so, its amount,
			 up to the maximum allowed by law, is always negotiable between the consumer and
			 the dealer.
(w) "Person"
			 means natural persons, corporations, trusts, partnerships, incorporated or
			 unincorporated associations, and any other legal entity except bodies or
			 officers acting under statutory authority of this state or the United States
			 and includes, but is not limited to, dealers, brokers, manufacturers,
			 publishers, advertisers or advertising agents;
(x) "Personal Watercraft" means a jet ski or
			 other aquatic device of similar design;
(y) "Publish" means to disseminate, mail, or
			 otherwise make available to the public at large, or any section of the public,
			 in whatever form and by whatever means any information;
(z) "Publisher" means any person who
			 publishes any advertisement;
(aa)
			 "Rebate" means:
(i) The payment of money to a
			 consumer or payment to a person on behalf of a consumer on the condition that
			 the consumer purchase or lease a motor vehicle; or
(ii) The return of any part of a payment made
			 by a consumer in conjunction with the sale or lease of real estate, goods or
			 services and includes, but is not limited to, an offer of a future cash refund,
			 a direct or indirect payment of money to a consumer or a voucher for future
			 payments.
(bb)
			 "Recreational vehicle" has the meaning given that term in ORS 650.300;
(cc) "Sale," "Sell" or "Buy" means
			 any transaction for the sale, purchase, trade, exchange or lease of a motor
			 vehicle;
(dd) "Spot Delivery" or
			 "Spot Delivered" means that a consumer has taken possession of a motor vehicle
			 from a dealer or broker and the consumer has committed to buy or lease the
			 vehicle, whether or not there is a finalized transaction or final approval of
			 financing;
OFFICIAL COMMENTARY:
Spot delivery occurs when a
				consumer signs a purchase order, lease agreement or retail installment contract
				for a motor vehicle and the consumer takes possession of the vehicle "on the
				spot," prior to a financial organization purchasing the retail installment
				contract or lease agreement from the dealer or a consumer presenting a dealer
				with payment for the full purchase price of the vehicle.
(ee) "Taxes, license and registration costs"
			 means those usual taxes, charges and fees payable to or collected on behalf of
			 governmental agencies and necessary for the transfer of any interest in a motor
			 vehicle or for the use of a motor vehicle;
(ff) "Used vehicle" means any vehicle which
			 has been previously:
(i) Delivered to any
			 person for his/her discretionary use for personal or business purposes and for
			 more than a test drive before a contemplated purchase or preparation for sale;
(ii) Titled or registered to any
			 person, whether or not it was used for the person's own discretionary personal
			 or business purposes; or
(iii) Spot
			 delivered.
OFFICIAL COMMENTARY:
See Weigel v. Ron Tonkin
				Chevrolet Co., 298 Or 127, 690 P2d 488 (1984). Vehicles that would be
				considered "used" include, but are not limited to: new vehicles that are spot
				delivered to a consumer, then subsequently returned to the dealer for any
				reason, including, but not limited to, the inability of the dealer to sell the
				retail installment contract; demonstrators and company cars that have never
				been sold to a retail customer, but have been driven for purposes other than
				test drives or moving, including use by the dealer, the dealer's employees, the
				dealer's corporate officers or anyone else; and all vehicles that have been
				driven more than the limited use necessary in moving or test driving a new
				vehicle prior to purchase or delivery to a consumer.
(gg) "Vehicle identification
			 number" or "VIN" means a number, a letter, a character, a datum, a derivative,
			 or a combination thereof, used by the manufacturer or a Department of Motor
			 Vehicles for the purpose of uniquely identifying a motor vehicle. For the
			 purpose of this definition, any time a motor vehicle advertisement requires the
			 publication of a "vehicle identification number," use of the last six numbers,
			 letters or other characters will constitute compliance with the rule;
(hh) "Wholesale" means the sale of
			 motor vehicles, goods or services for resale by a dealer, broker or other
			 person, as opposed to the sale of motor vehicles, goods or services to the
			 ultimate consumer;
(ii) "Yield
			 Spread Premium" means the difference between a higher interest rate quoted to a
			 consumer by a dealer or broker and the buy rate offered to the dealer or broker
			 by a financial organization.