Sign & Drive Zero Down FTC Fines

Is your dealership in danger of FTC fines for advertising “Zero Down” or “Sign & Drive” sales?  Pay attention to this article, originally written by Chris Morran and posted on, to avoid FTC investigation and fines! Consider this share your Public Service Announcement from one car dealership professional to others!


Car Dealers Can’t Scream “Zero Down On All Leases” If Most Buyers Won’t Qualify For Deal

leasenonoCar dealers are known for hyperbolic slogans like “Everybody rides!” or “Nobody walks away from our lot!,” but that sort of puffery is a far cry from repeatedly claiming that the advertised lease price includes “Zip, Zero, Zilch — Nothing Down!” only to hide the ugly truth in fine print that most people won’t understand.

The Federal Trade Commission announced today that it had reached a settlement with some Ohio car dealers who were zealous in advertising their zero down payment promotions, but not as forthcoming in revealing how few people could actually qualify for the deal.

According to the administrative complaint [PDF] filed by the FTC against Progressive Chevrolet Company and Progressive Motors, both of Massillon, OH, the car dealers ran ads for cars, each featuring specific monthly pricing, and each accompanied with the “Zip, Zero, Zilch…” and “Sign & Drive!” touts.

And right across the top of those ads, it explicitly states that this applies to “ALL LEASES,” but following the tiny asterisk next to the prices leads one to the microprint at the bottom of the page.

That’s where the dealer reveals that the advertised payment amount does not include tax, title, and fees. Even if you assumed that the actual monthly payment would be higher, it’s the next fine-print disclosure that is the most problematic — that zero down offer is subject to an 800 BEACON score or higher.

What’s a BEACON score? Good question. It’s an industry-specific credit score offered by EquiFax, and not only is it unlikely that most people are familiar with the term, most consumers fall short of the 800 threshold required to qualify for the advertised leases.

According to the FTC, fewer than 20% of American consumers have a BEACON score of at least 800, meaning 4-in-5 car buyers would not be able to get the deal touted in the Progressive ads.

This failure to adequately disclose a material condition of obtaining a lease is a violation of the FTC Act, according to the complaint. The dealers were also accused of violating the Consumer Leasing Act by mentioning specific monthly lease payment amounts without fully disclosing additional terms as required by law, including the total amount due at consummation or delivery, the number of payments and their amounts and timing, and whether or not a security deposit is required.

Dani aka The Dealer Quarterback

Dani Zandel got her start in the auto dealership world on a rainy day in January, 1998. The rest is history, which includes jumping head first into running Internet Departments before CRMs became popular (using Yahoo! Mail)...before Internet Departments existed... before Internet leads arrived from any source other than the vehicle manufacture! Dang! This bio just aged Dani way too much! Since those early days, Dani has sold vehicles, trained in the F&I office, and excelled at Internet Lead Handling, while exploring other low-cost, high ROI opportunities to sell cars to the community. Some of Dani's accomplishments include Certificates of Completion for the F&I and Internet programs at College of Automotive Management, as well as the Human Resources program at Loyola Marymount University (extension). She has rank advanced as a representative of Send Out Cards, and believes every salesperson and every car dealership should consider the benefits of showing gratitude to car buying prospects and customers. Dani has had the joy and pleasure of working with great dealerships -- most recently implementing a BDC from non-existence to operational success for a Toyota dealership, and previously, a Chrysler, Dodge, Jeep Ram and Fiat dual rooftop dealership. Her combined experiences in HR Management, Telephone & Internet Communications, and understanding of the technical side of CRMs, in addition to her own car dealership experiences, give Dani a leg up in the organization processes involved to create and install BDC departments, and restructure Internet departments within car dealerships. Dani's future goals include travel to the crystal blue waters of Santorini, Greece, and acclaimed success as a consultant, trainer, and speaker on the circuit of Automotive Dealership Seminars, specializing in the topics related to Internet and BDC success.