12.2.4.6

Objective:

1. A. The purpose of these regulations is to accomplish two principal objectives. The first is to deter unfair and deceptive practices that result in economic harm to consumers. The second is to provide clear legal standards for motor vehicle advertising to facilitate dealer compliance and fair competition and to make evaluation of particular practices easier.
2. B. The attorney general’s office has long been concerned about unfair and deceptive practices in connection with the advertising and sale of motor vehicles. The attorney general’s consumer protection division has received numerous written consumer complaints and telephone calls alleging such practices. Indeed, the division receives such complaints virtually every day. The consumer protection division has also received a substantial number of telephonic and written complaints from motor vehicle dealers concerning other dealers’ use of deceptive advertising as an unfair method of competition.
3. C. The complaints that have come to the attention of the attorney general’s office have involved a large number of specific unfair or deceptive practices. These practices can be grouped into a number of more general categories. These include, but are not limited to: advertising vehicles for sale at prices lower than the actual prices at which the dealers will sell the vehicles; advertising fictitious discounts or trade-in allowances; failing to make required disclosure concerning credit terms; misrepresenting or failing to disclose material information concerning the age, condition and/or prior usage of motor vehicles. It is precisely such concerns that these regulations address.
4. D. The experience of the attorney general’s office also indicates that the advertising and sale of motor vehicles is a particularly appropriate area for the promulgation of regulations. The sheer number of complaints, the number of dealers about whom consumers have complained and the fact that a significant number of complaints have been received from dealers concerning the use of unfair methods of competition in the industry all lead to the conclusion that regulations are necessary to ensure that advertising and sales practices are not unfair or deceptive, that such practices conform to legitimate consumer expectations and that all dealers are placed on an equal competitive footing. The attorney general has therefore concluded that regulation of the advertising and sale of motor vehicles is in the best interest of the health, safety and general welfare of the citizens of New Mexico.
5. E. These regulations provide a basis for evaluating motor vehicle advertising. They reflect provisions of New Mexico law, but do not necessarily cover every possible deceptive advertising practice. Therefore, it is not intended that literal compliance with these regulations be an absolute protection against liability for deceptive advertising. Dealers must review their advertising in light of the purpose of the regulations.

6. F. Before promulgating these regulations, notice of the proposed action was published pursuant to AG 92-3-1.3(A) [now 12.2.1.9 NMAC], and a public hearing was held on July 9, 1992 in Santa Fe. All comments received during the hearings were considered in the revision of the regulations finally promulgated. Consumers had already effectively spoken to this office and expressed their concerns through their written complaints and telephone calls. Representatives of the motor vehicle industry and the advertising industry testified at the hearings. This office also solicited written comments on the regulations. The comments received reflect the views of the New Mexico automotive dealers association representing the interests of new vehicle dealers and the independent automobile dealers association representing the interests of used vehicle dealers. All comments received were considered.

   [5-1-98; Recompiled 10/15/01]