31st October, 2018 · Member News

Opportunistic Advertising Tactics used
by Industry Start Ups

2 minutes to read

Recently a member brought to our attention a radio advertisement by an online used car sales retailer which claimed that people were being “ripped off” by Dealers.

Unfortunately, it is not uncommon for those seeking to create a competitive advantage in the market that they do so by berating and denigrating franchised new car Dealers. Those doing so typically craft their message to avoid being unlawful or in breach of the advertising code, but that doesn’t mean that we as an industry should sit back and do nothing. It is important that Dealers are not thought of as soft targets and the notion that Dealers would rip off customers is completely nonsensical and ultimately reflects on the industry and all of those working in it.

AADA has written to the directors of the company concerned and informed them that franchised new car Dealers go to considerable expense and effort to demonstrate to their customers that the needs of the customer come first. More than ever, in an age of social media, Dealers are judged publicly on the service and value they provide.

Dealers recognise that their public image, often tarnished by industry fringe dwellers, needs to be improved. This is one of the reasons why most Dealers play an important role in their local community, running charitable programs and fundraising for community groups and sporting clubs. From an ethical and business perspective it is absurd to suggest these same Dealers who are working to make a name for themselves, would turn around and start ripping customers off.

On top of these efforts, Dealer operations are also tightly regulated and have licensing and Australian Consumer Law obligations that they must comply with. These obligations are legally enforceable and require Dealers to treat customers fairly and with full disclosure of the sales terms, warranties and available remedies, should customers need them.

We have also made it clear that AADA members have no issue with competition in the market, provided those they compete with operate fairly and within the law.

While we await a response to the letter, we would remind all members to be on the lookout for this type of cheap, opportunistic and misleading advertising and report it to us for further action.