Most Washington-area auto dealers have approved a voluntary code of ethics designed to eliminate misleading car-sales advertisements, a metropolitan dealers association group announced yesterday.
The 11-point code was drafted by the Automotive Trade Association of the National Capital Area and the Metropolitan Washington Better Business Bureau.
ATANCA represents 160 of the estimated 175 auto dealers in the Maryland and Virginia suburbs, where most area car dealers are situated, and in the District of Columbia.
Since 1984, some local dealers and consumer advocates have been trying to establish guidelines to govern auto-dealer behavior in advertising.
Their efforts were prompted by numerous complaints from consumers, and also from dealers who said that they were losing money because of false or misleading advertising by competitors.
Chief among the consumer complaints was the practice of advertising cars or trucks that were not available, or that were not available at the advertised price.
Disgruntled dealers often complained privately that they could not, and would not, match the grandiose and frequently untrue advertising claims of some of their peers.
The Montgomery County Office of Consumer Affairs started a fair-advertising program in May 1984. But that program, which attracted 32 of the county's 43 dealers, ended a year later, mostly because of "jurisdictional problems," said George Rose, director of the county's auto complaint section.
Rose said that his office could not expand the program beyond Montgomery County's borders, which meant that many county residents still were being lured into showrooms by dealers operating in neighboring jurisdictions.
Through their organizational reach, ATANCA officials said yesterday that they hope to avoid that problem.
"Every large dealer in the metropolitan area was represented" in the drafting of the ATANCA-BBB code, said Morton J. Zetlin, a general partner of the Arlington-based American Service Center and chairman of the ATANCA board of directors.
"I can't conceive of any one of those dealers violating the terms of this agreement," Zetlin said.
He said that, inasmuch as ATANCA "is not a law enforcement agency," his group would rely on "peer pressure" to keep wayward dealers in line.
"In the past, dealer members of ATANCA, of their own volition, have come together to see what the organized dealer group could do to remedy automotive advertising when it got off track," Zetlin said.
"The dealer group's problem advertising stems from the business realities that the bad ads alienate car shoppers and make it difficult for dealers to compete for business," Zetlin said.
Under the code approved yesterday, local dealers will be asked to "fully and fairly disclose all material terms" of sales incentive programs, such as the below-8-percent finance campaigns that ended last month.
Dealers also will be asked to give buyers proof that "discount prices" are true discounts, based upon previous prices for the affected models.
Car advertisements that make underselling claims -- the "our-prices-are-lower-than-anybody-else's" variety -- also should be substantiated, according to the new dealer code.
Dealers should make clear that the words "list" or "sticker" refer only to the federally mandated manufacturer's label, according to the code.
In past and current advertising practices, some local dealers use "list" and "sticker" to describe their own, usually higher, price tags, often identified by terms such as "Add-A-Tag" or "Adjusted Market Value."
Dealers accused of violating the code will be contacted by ATANCA and asked to respond to the complaint, said Donald S. Beyer Jr., chairman of the ATANCA dealer advertising committee and president of Don Beyer Volvo in Falls Church.
"If the dealer agrees that his ad is a problem and changes his copy, that is the end of the matter," Beyer said.
The ATANCA advertising committee will preside over any dealer challenges to complaints and will render "an opinion as to whether . . . the dealer's ad is outside of the 11 guidelines," Beyer said.
The opinion will be sent to the dealer and the plaintiff, "both of whom will be free to pursue whatever further action they deem appropriate," Beyer said.