AUSTIN, Texas — After the Texas Department of Motor Vehicles Enforcement Division took a call from shopping site CarGurus on April 30, the department hit the brakes on its plan to fine dealers who have listings on the CarGurus website. As part of an agreement reached over the phone, CarGurus must submit suggested revisions to its advertising practices, which the department will consider no later than May 7.
The DMV’s Enforcement Division announced in a letter to CarGurus and the Texas Automotive Dealers Association April 23 that it would fine dealers with listings on the shopping site $10,000 in administrative penalties each day a violation occurs. The department claims that the way CarGurus lists the prices of used vehicles on its website — including projected savings below market value and price drops — is in violation of state law.
“… A savings claim or discount offer is prohibited except to advertise a new motor vehicle,” the department’s letter, obtained by F&I and Showroom, read, in part. “No person may advertise a savings claim or discount offer on used motor vehicles.”
Now, the department is actively working with CarGurus to ensure that its advertisements are in compliance with state law and has put possible enforcement actions on hold. It will issue a decision on the proposed changes by May 7.
“In the interim, the department will abate any enforcement action relating to used motor vehicle savings claim advertisements appearing on the CarGurus website,” the department’s Director of Enforcement William P. Harbeson told CarGurus in a letter following yesterday’s call. “Again, thank you for your cooperation in this matter and I am hoping we can quickly resolve this matter in an amicable manner.”
Originally posted on F&I and Showroom
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