“Jurisprudence” is the theory or philosophy of law. It is also a class we had to take in law school. Hold on to that word – we’ll come back to it.
California just passed the California CARS Act, which largely mimics the Federal Trade Commission CARS Rule that the Fifth Circuit Court of Appeals overturned this year. One element that even California wouldn’t include from the federal rule was the definition of “express, informed consent.” But one element California did include was the concept of “total price.” Quoting the act:
“Total price” means the total sale price of a vehicle, excluding the taxes, fees, and charges described in subdivision (e) of Section 11713.1 of the Vehicle Code.
“Total price” includes any dealer price adjustment and the cost of any item installed on the vehicle at the time of the advertisement or communication.
“Total price” does not include any deduction for a rebate.
What all this means for California dealers is that the featured, top-line price in an ad for a specific vehicle must be the (nearly) “all-in” price, including dealer/document fee, delivery charge, and any preloads or charges set forth in an addendum sticker.
Record Keeping
To prove compliance, dealers must retain records of their advertisements that mention total price or any finance terms for a period of two years. The definition of “advertisement” includes all “internet-based listings.” So if you’re a California dealer that doesn’t retain archived copies of every vehicle listing on your website, you’ll need to start. In addition:
The total price must be disclosed in the first written communication between a dealer and a consumer that references a specific vehicle.
The dealer must keep a copy of that written communication for at least two years.
The dealer must provide a copy of that communication to the consumer upon written request. If the communication does not contain the total price, presumably the consumer will forward it to his local plaintiff’s lawyer.
In short, separately listed document fees, preloads and delivery charges will be a thing of the past in California when its CARS Act takes effect on Oct. 1, 2026. But why was this so important? That, gentle readers, is where jurisprudence comes in.
Natural Law
The “natural law” school is the jurisprudential tradition that would hold misleading consumers is always wrong. Why? Natural-law theory insists that law and morality are inseparable. An act is unjust if it violates higher moral principles, even if no statute prohibits it. But is an advertised price that excludes certain charges necessarily misleading?
Consider a different purchase and a different ad. If my local appliance store advertises a particular refrigerator for, say, $1,000, I would reasonably believe that I could purchase that fridge for $1,000, plus tax.
But cars are different. Whereas an appliance purchase is rarely expected to be a negotiated transaction, car purchases generally are. Further, about half of all new car deals include a trade vehicle; many may include a rebate for which all, or just certain, consumers qualify. And then there are dealer/document fees, which are assessed in most new-car transactions. Unless you’ve never bought a car before, it’s hard to say you are surprised to see one in the deal.
I would submit that the average consumer would understand the advertised prices on a dealer’s website not to be the final out-the-door price but rather the point from which negotiations start. And most negotiations in today’s market aim not to reduce the cash price of the vehicle (though not in the case of a true cash buyer) but to reduce the monthly payment.
When most consumers are payment shoppers, the advertised price matters less. Having said that, it is still necessary to include in the advertisement itself all of the factors that affect the actual price of the vehicle. If you charge a delivery fee, that needs to be clearly and conspicuously disclosed. Same with preloads and doc fees.
Looked at in this light, “advertised price” is the price discernible from the ad as a whole, whereas “total price” is the “all-in out-the-door price,” less taxes, of course. Total price makes more sense for non-negotiated transactions, whereas advertised price fits the negotiated transaction model.
Two different approaches, same intent: Consumers get what they expect. Through the lens of jurisprudence, both can be understood and reconciled.
James Ganther is president of Mosaic Compliance Services.
