Top Ten Reasons To Use Mail To Advertise Used Cars

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Direct Mail still provides one of the highest ROIs in marketing when it comes to reaching customers. Check out this list of the top 10 reasons to use mail specifically for used cars.

1. Dealers have a historically low inventory of used vehicles.

2. The media is now reporting that there is a used vehicle shortage, making mail or advertising more credible when asking to buy their vehicle.

3. Dealers need to be super sharp digitally and in their communications with customers during this shortage. Finding out what their current car is worth (63%), and locating a dealer or getting dealer info (46%) are the top consumer shopping destinations (AutoTrader).

4. Even if every dealer in a market is advertising “we need your car,” your dealership should still advertise it. Customers will always shop more than one offer and you want your dealership to be included.

5. It takes 6 to 8 weeks to receive a new vehicle once ordered from the factory. Current dealership inventory is probably less desirable than inventory your dealership had 4 to 6 weeks ago. Traffic sells cold product.

6. Dealers need the inventory.

7. A “trade-in” is almost always better than a vehicle obtained at auctions. Trade-ins are unique and therefore represent a greater profit opportunity.

8. Used vehicle auction prices are on the increase. On a year-over-year basis, most major market segments saw seasonally adjusted price increases in the first 15 days of July. Luxury cars and pickup trucks outperformed the overall market, while most other major segments underperformed the overall market.

9. The easiest customer to convert is an existing customer. Dealers at a minimum should be mailing and emailing their owners.

10. The CARES ACT. If the CARES ACT is extended, you’ll have consumers possibly looking for a used vehicle based on enhanced unemployment income. If the CARES ACT is not extended, you may have consumers looking for cash or lowering existing payments.

The Legality of Direct Mail Marketing

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The FTC and many state-level regulators have made auto finance and dealership advertising practices their priority enforcement areas. The FTC says the rules are straightforward, but some are not very clear.

“In the past six years, the FTC filed about 40 enforcement actions related to auto dealerships,” said Nikhil Singhvi, a staff attorney in the FTC’s Division of Financial Practices, in an article with Automotive News. Singhvi said enforcement areas include deceptive advertising, deceptive and unfair finance practices, title loan fraud, debt collection, privacy and data breaches, and credit reporting violations.

The FTC also increasingly seeks to hold individuals accountable and is including them in its enforcement actions when it can show that they knew of deceptive practices, Singhvi said.

The FTC receives dealership complaints through consumers, other law enforcement or state partners, consumer advocacy groups and even former employees, he said. The FTC in its 2018 report tallied more than 100,000 auto-related complaints.

Singhvi said the FTC’s rules are easy to follow for dealerships. “The baseline that we enforce at the FTC is don’t deceive consumers. That’s a pretty easy one,” he said. “That covers things like advertising for incentives that are not actually available or that have such onerous limitations that they’re effectively not available to anyone.”

The FTC also scrutinizes bait-and-switch advertising for vehicle offers that don’t exist but are used to draw people into the dealership.

“The specific rules for financing advertising have not changed dramatically in a long time, the specific financing terms that must be disclosed,” Singhvi said. “These aren’t very complicated matters, and they are things that compliant dealerships should be able to handle.” The FTC also monitors social media advertising, where it can be difficult in limited space for a dealership to make the required disclosures, Singhvi said. (Automotive News)

NADA has provided guidance for advertising. In 2015, the association created a guide for dealers, manufacturers, finance companies, and dealership ad agencies on ad compliance that covers 41 topics and provides examples of good vs. bad ads. Those guidelines can be found here.

Dealership ads need to disclose triggering terms required by the Truth in Lending Act and the Consumer Leasing Act, said Randy Henrick of Mosaic Compliance Services. Leasing also requires many additional disclosures such as the number of payments and security deposit, and some states require excess mileage or allowed mileage disclosures or the cost to buy at the end of the lease term.

“What gets dealers in trouble is advertising the payment amount, or advertising a low APR for a certain number of months and not saying anything else,” he said. “Or putting it in mass type in color that bleeds into the background that’s not clear and conspicuous.”

Other problem areas are teaser terms, undisclosed balloon payments, false $0 upfront leases, undisclosed lease terms, hidden rates, fake prize promotions and credit and leasing violations. (Automotive News)

In addition to the FTC, dealerships need to know their state regulations covering deceptive and unfair advertising. That’s where Prospect Vision comes in. Prospect Vision’s integrated software ensures accurate pricing and includes all disclaimers. Your mail pieces are then archived for future audits. The team at Prospect Vision is specialized in communication compliance.