The Federal Trade Commission said yesterday it is cracking down on car dealers who advertise bargain-basement interest rates for automobile loans without telling consumers all of the conditions of the offers.

The FTC said it had begun an investigation into the practice and has already sent warning letters to more than 70 car dealers around the nation, asking them to correct their advertising. The commission said it would take legal action against the dealers if they did not make the corrections voluntarily.

The commission also said it was looking into instances in which auto dealers offer to pay a flat rate for all trade-ins without specifying that the car's mileage or condition could reduce the trade-in value.

With most legitimate auto-loan rates still in the low double-digits, the FTC said, some unscrupulous dealers are pushing auto loans at interest rates claimed to be 5 percent or below. These dealers often fail to disclose that the quoted rate is not the actual interest rate on the loan, or that an unusually large down payment is required, the FTC said.

"We feel there are a lot of car dealers locally as well as nationwide that are advertising very low interest rate loans that appear to be violating the truth-in-lending law," an FTC spokeswoman said. "You can't get a loan for 5 percent."

The FTC said it had opened the investigation following complaints from consumers, local consumer-protection agencies and local better business bureaus. The Better Business Bureau of Metropolitan Washington sent a letter to auto dealers in late January warning against the practice.

"One advertisement even offered low financing with question marks on top of it, indicating it may or may not be available," the letter said.

"This, incidentally, was a clear violation of truth-in-lending laws."

Frank E. McCarthy, executive vice president of the National Automobile Dealers Association (NADA), said in a statement that the FTC's action "is helpful in clearing confusion that had existed in the automotive marketplace."

The FTC said it had found cases in which dealers had advertised extremely low interest rates without specifying other conditions, such as large down payments and financing charges, that make the alleged rate no bargain.

Others, the commission said, display an interest rate that represents simple interest, rather than the actual annual percentage rate, which can be as much as 5 percentage points higher, a spokeswoman said.

Also attacked were advertisements that use one or more "triggering terms" such as the number of payments or repayment terms without including other required information such as amount of repayment, the size of the down payment, or the annual percentage rate.

In a fact sheet for consumers released yesterday, the FTC warns car buyers to be wary of loans requiring unusually large down payments, interest rates that apply only to certain cars in stock, or requirements that the manufacturer's rebate be returned to the dealer so a buyer can qualify for the financing.