FTC Scrutiny Puts New Pressure on Dealerships’ Social Media Marketing

The Federal Trade Commission’s attempt to introduce its CARS Rule may have failed in court after a procedural misstep, but that hasn’t stopped the agency from increasing its focus on dealership practices. While NADA successfully challenged the rule, the current FTC appears determined to pursue enforcement actions against businesses it believes are misleading consumers, even without new regulations in place.

For dealerships, that means compliance concerns are no longer limited to websites, showroom pricing, or finance offices. Increasingly, social media activity is coming under the spotlight as well.

Most dealers understand the need for transparent pricing and clear communication during the sales process. But some industry experts now argue that social media posts deserve the same level of attention as traditional advertisements. A discounted vehicle promoted online could become a liability if the post remains active after the vehicle has already been sold.

According to several automotive sales professionals, dealerships should treat Facebook posts, Instagram promotions, TikTok videos, and other social media content as advertising material subject to the same standards of accuracy as any other marketing channel.

If a dealer advertises a heavily discounted vehicle and that unit sells quickly, leaving the original post online without updating it could potentially create problems. Some consumers may view the offer as misleading and file complaints with the FTC or pursue legal action.

The team behind Car Dealership Guy (CDG) recently asked the FTC whether specific guidelines exist for dealership social media activity in today’s regulatory environment. The agency declined to provide a direct answer. Even so, the FTC has repeatedly emphasized that advertising must be truthful and not deceptive.

Because businesses use social media primarily as a marketing tool rather than for personal interaction, many experts believe the same standards that apply to dealership websites should also apply to social platforms.

Automotive sales strategist Peter Smith argues that dealers should follow identical compliance procedures across all advertising channels. If a dealership promotes a vehicle on Facebook and that vehicle sells, the post should be updated immediately to indicate that the unit is no longer available.

Some compliance professionals recommend going even further. Adam Crowell, Chief Legal Officer at KPA, believes dealerships should consider removing all content related to a sold vehicle, including social media posts, short-form videos, and YouTube content. Doing so could help eliminate any confusion and reduce the risk of complaints.

Brooke Conkle, a partner at Troutman Pepper Locke, shares a similar view. She believes that careless social media practices could attract unwanted regulatory attention and says dealers should prioritize transparency wherever they advertise.

Ultimately, the message for dealerships is fairly simple: avoid pricing inconsistencies and make sure every advertised offer remains accurate. As regulators continue to pay closer attention to automotive retailing, even a smal oversight on social media could create unnecessary problems. Dealers who stay proactive, keep information current, and remove outdated promotions will likely face fewer compliance risks in the future.