Attorney General's News Release

November 21, 1996

Four major automakers to pay $1 million, change lease ads under agreement with FTC and 23 states, including Missouri

Jefferson City, Mo. — Four major auto makers will change the way they advertise vehicle leases under an agreement with the Federal Trade Commission and Attorneys General from 23 states, including Missouri.

The agreement with General Motors, Honda, Isuzu and Mitsubishi resolves concerns that their lease advertising falsely represented that consumers could lease vehicles for “zero down” or “nothing down.” The agreement, filed this morning in Cole County Circuit Court, requires the automakers to pay $1 million total to be divided among the states that initiated the investigation, with Missouri receiving $50,000.

“The thrust of several commercials was that consumers could lease a vehicle for nothing down,” said Missouri Attorney General Jay Nixon. “The important details showing the true up-front cost to be several hundred dollars flashed only briefly on the screen in tiny print. It is not acceptable for these crucial details to be so difficult to discern.”

Under the terms of today's agreement, future auto lease advertisements that feature an amount down must clearly disclose the total amount the consumer must pay at the beginning of the lease in a manner that is as conspicuous as statements made about the amount down. The companies also agreed to clearly and conspicuously disclose final “balloon payments,” which can be much higher than the initial payments prominently advertised.

Nixon said that with the growing popularity of auto leasing, consumers need to be informed and prepared when negotiating a lease, particularly if there is a trade-in involved. Missouri consumers can obtain a free worksheet, called The Reality Checklist, to determine the actual cost of a vehicle lease. The checklist is available by calling the Attorney General's Consumer Protection Hotline at 800-392-8222.

The other states participating in the agreement with the FTC and the four auto makers include Arizona, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Tennessee and Washington.

Last month, Missouri was one of 14 states to file lawsuits against Mazda Motor of America Inc. for running false and deceptive advertising about its leasing program. That lawsuit is still pending.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818