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DrivenNADA MANAGEMENT SER IES L14

EPA ESTIMATE30 MPG HIGHWAY28 MPG CITY

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A DEALER GUIDE TO

Fuel Economy Advertising

2 | NADA Management Series: Driven A Dealer Guide to Stepping Up Foot Traffic

NADA has prepared this Driven guide to help its members comply with the FTC’s fuel economy advertising guidelines.This guide is offered for informational purposes. It does not contain, and is not intended as, legal advice. NADARegulatory Affairs is available to answer questions regarding the fuel economy advertising guidelines; however, dealers seeking legal advice should discuss these provisions (and other federal and state laws) with their legal advisors.

The presentation of this information is not intended to encourage concerted action among competitors or any other action on the part of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service.

L14

NADA Management Series: Driven A Dealer Guide to Fuel Economy Advertising

a dealer guide to


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TABLE OF CONTENTS

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Purpose and Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Qualifications and Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Key Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

General Fuel Economy Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

General Driving Range Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Matching EPA Estimates to Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Fuel Economy and Driving Range Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Disclosing EPA as the Information Source Unless Non-EPA Estimates are Provided . . . . . . . . . . 5

Driving Modes for Fuel Economy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Within Vehicle Class Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Comparing Different Model Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

‘‘Up To’’ Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Claims for Flexible-Fueled Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

a dealer guide to


1 | NADA Management Series: Driven A Dealer Guide to Fuel Economy Advertising

Executive SummaryTo assist dealers and manufacturers in avoiding deceptive advertising practices relating to fuel economy and driving range, the Federal Trade Commission (FTC) has updated its Guide Concerning Fuel Economy Advertising for New Automobiles. The FTC's updated Guide reflects revisions in Environmental Protection Agency (EPA) fuel economy labeling and incorporates alternative fuel advertising guidance. The revised Guide states that it is deceptive to misrepresent, directly or by implication, the fuel economy or driving range of an automobile and makes suggestions as to how to advertise fuel economy without being deceptive.

This Driven guide reviews the FTC’s recommended disclosures for ads making fuel economy and driving range claims, and presents examples of deceptive ads. Discussed are the necessity to stress that EPA estimates are not guarantees, to match EPA estimates given in ads to the relevant driving mode (city, highway or combined), and to disclose the source of fuel economy and range information, whether EPA (preferred) or otherwise. Advertisements should also make only “apples-to apples” comparisons, avoid “up to” claims, and clearly identify the fuel type used for claims involving flexible-fueled vehicles.

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31 MPG CITY PER EPA ESTIMATE


Purpose and BackgroundSince the mid-1980s, the FTC Guide Concerning Fuel Economy Advertising for New Automobiles (the Guide) (16 CFR Part 259) has provided administrative interpretations on how the “unfair and deceptive” restrictions in Section 5 of the FTC Act (15 USC 45) apply to the use of fuel economy information in new automobile advertising. The Guide applies to new automobiles and to all media, but it does not purport to cover every possible use of fuel economy in advertising. In September 2017, the FTC revised its Guide to comport with the EPA/NHTSA Motor Vehicle Fuel Economy Label mandates (as revised in 2011), and the FTC Labeling Requirements For Alternative Fuels And Alternative Fueled Vehicles (as revised in 2013). The revised Guide makes it clear that it is deceptive to misrepresent, directly or by implication, the fuel economy or driving range of an automobile.

In 2011, the fuel economy labels required for certain automobiles were revised to enhance the ability of consumers to make fuel economy and emissions

comparisons between vehicles with both similar and different fuels and powertrain technologies. Automakers almost always include this fuel economy and emissions information on the vehicle Monroney (pricing) labels attached to automobiles prior to shipment. The Monroney law requires that dealers see that those labels stay attached until automobiles are delivered to first purchasers. For more information on the EPA/NHTSA fuel economy labels, click here.

Qualifications and DisclosuresTo prevent deception, qualifications and disclosures made in fuel economy ads should be clear, prominent, and understandable. They should be in plain language and in sufficiently large type, and should be placed near and in the same format as the claims they pertain to. Avoid inconsistent statements and distracting elements that could undercut or contradict disclosures. For example, if in a television ad a fuel economy claim appears in the video, the disclosure should appear in the video, but if a claim is made in the audio, the disclosure should be in the audio.

Monroney labels

should not be

removed from

vehicles before

they are delivered

to first purchasers.


https://www.nada.org/workarea/DownloadAsset.aspx?id=21474849476


Key DefinitionsThe terms below are found in the FTC’s Guide.

AutomobileAny new passenger automobile,

medium-duty passenger vehicle,

or light truck for which a fuel

economy label is required, the

equitable or legal title

to which has never been

transferred by a manufacturer,

distributor, or dealer to an

ultimate purchaser or lessee.

‘‘Vehicle’’ and ‘‘car’’ have the same

meaning as ‘‘automobile.’’

EPA driving range estimateThe EPA estimate of the miles

a vehicle will travel between

refueling.

FuelGasoline and diesel fuel for

gasoline- or diesel-powered

automobiles; electricity

for electrically-powered

automobiles; alcohol for alcohol-

powered automobiles; natural

gas for natural gas-powered

automobiles; or any other fuel

type used in a vehicle required

to have a fuel economy label.

DealerA person located in the

United States or any territory

thereof engaged in the sale or

distribution of new automobiles

to ultimate purchasers.

EPA fuel economy estimateThe average number of miles

traveled by an automobile per

volume of fuel consumed (i.e.,

miles-per-gallon or mpg rating).

ManufacturerA person engaged in the

manufacturing or assembling of

new automobiles, including a

person importing

new automobiles for resale,

and a person who acts for, and

is under the control of, such

manufacturer, assembler, or

importer in connection with the

distribution of new automobiles.

EPA city fuel economy estimateThe city fuel economy

determined by EPA’s city

test procedure.

EPA highway fuel economy estimateThe highway fuel economy

determined in accordance with

EPA’s highway test procedures.

Model typeA unique combination of

car line, basic engine, and

transmission class.

EPA combined fuel economy estimate .The EPA fuel economy value

determined for a vehicle by

harmonically averaging the

city and highway fuel economy

values, weighted 0.55 and 0.45

respectively.

Flexible-fueled vehicleA motor vehicle or engine

engineered and designed to be

operated on any mixture of two

or more different fuels.

Ultimate purchaser or lesseeThe first person, other than a

dealer purchasing in its capacity

as a dealer, who in good faith

purchases a new automobile

for purposes other than resale

or leases such vehicle for

personal use.

General Fuel Economy ClaimsGeneral fuel economy claims that do not reference specific fuel economy estimates may convey a wide range of meanings about an automobile’s fuel economy relative to other automobiles. They can mislead consumers about the vehicle class involved, and the extent to which an advertised automobile’s fuel economy differs from other models. General fuel economy claims should disclose the automobile’s estimated fuel economy using EPA mpg ratings.

EXAMPLE 1

An ad states, ‘‘This vehicle gets great mileage.’’ This claim likely conveys that the vehicle has a better mpg rating than most or all other new vehicles. If its EPA fuel economy estimates are only slightly better than the average new vehicle, its ratings are not better than most or all new vehicles and the advertisement is deceptive. To avoid deception, the ad should disclose the vehicle’s EPA fuel economy estimate (e.g., ‘‘EPA-estimated 27 combined mpg’’).

EXAMPLE 2

An ad states, ‘‘This car gets great gas mileage compared to other compact cars.’’ The claim likely conveys that the car gets better gas mileage than most or all other compact cars, even if its EPA fuel economy estimates are only slightly better than average compared to other new models in its class. Since its ratings are not better than most or all other compact cars, the advertisement is deceptive. To avoid deception, the ad should disclose the car’s EPA fuel economy estimate.

General Driving Range ClaimsDriving range claims that do not reference a specific estimate are hard to interpret and can convey a wide range of meanings about a vehicle’s range relative to other vehicles. Such claims can mislead consumers about the vehicle class involved and the extent to which a vehicle’s driving range differs from other model types. To avoid deception, such ads should disclose the vehicle’s EPA driving range estimate.

EXAMPLE

An ad states, ‘‘This electric car has a great driving range.’’ This claim likely conveys a variety of meanings, including that the car has a better driving range than most or all other electric cars. If the EPA driving range estimate for the car is only slightly better than roughly half of all other new electric cars, the ad is deceptive. To avoid deception, the ad should disclose the car’s EPA driving range estimate (e.g., ‘‘EPA-estimated range of 70 miles per charge’’).

Matching EPA Estimates to Claims EPA fuel economy estimates should match the driving mode claimed to avoid any confusion between the stated fuel economy estimate and the type of driving. Thus, ads with city or highway fuel economy claims should disclose EPA city or highway fuel economy estimates, and ads with both city and highway fuel economy claims should disclose both EPA city and highway fuel economy ratings. Ads making general fuel economy claims that do not reference city or highway driving should either disclose EPA combined fuel economy estimates, or disclose both EPA city and highway fuel economy estimates.



EXAMPLE 1

An ad states that ‘‘Model XYZ gets great gas mileage in town.’’ It does not disclose the EPA city fuel economy estimate, but rather the higher EPA highway fuel economy estimate. This claim likely conveys that the highway estimate applies to city driving and thus is deceptive. To avoid deception, it should disclose the EPA city fuel economy estimate (e.g., ‘‘32 mpg in the city per the EPA estimate’’).

EXAMPLE 2

An ad states, “Model XZA gives you great gas mileage’’ but lists only the EPA highway fuel economy estimate. Since this is a general fuel economy claim that does not refer to a specific driving type, it is inconsistent with the disclosed EPA highway estimate, and the ad is deceptive. To avoid deception, it should disclose the EPA combined estimate (e.g., ‘‘37 mpg for combined driving per the EPA estimate’’), or both EPA city and highway fuel economy estimates.

EXAMPLE 3

An ad states, ‘‘Based on EPA estimates, new cars in this class are rated at between 20 and 32 mpg, while the EPA estimate for this car is an impressive 35 mpg highway.’’ Since the claim likely implies that the 20 to 32 mpg range and 35 mpg estimate are comparable, when in fact the ‘‘20 and 32 mpg’’ range reflects EPA city estimates, the ad is deceptive. Ads should make only apples-to-apples comparisons—using either the EPA highway range for the class, or the city estimate for the vehicle.

Fuel Economy and Driving Range Estimates Ads citing EPA fuel economy or driving range should stress that they are estimates. Otherwise, consumers may incorrectly assume that they will achieve the mileage or range stated in the ad. Of course, the actual mileage or range achieved will vary based on driving conditions, driving habits, vehicle maintenance, etc. To avoid deception, ads should state that the values are ‘‘EPA estimates,’’ or use similar language to indicate that drivers may not achieve the stated mpg rating or driving range in real-world conditions.

EXAMPLE

A website states simply that, ‘‘This car gets 40 mpg on the highway.’’ The claim likely conveys to many consumers that they will achieve 40 mpg when driving the car on the highway. The claim in the ad is based on EPA’s highway estimate, but fails to note that it is for comparison purposes, and does not necessarily reflect real-world driving results. Thus, the claim is deceptive. Also, use of the term ‘‘gets’’ may lead consumers to believe that they will consistently achieve the stated mileage. To avoid deception, such ads should note that EPA’s mpg estimates are for comparison purposes only.

Disclosing EPA as the Information Source Unless Non-EPA Estimates are ProvidedSince EPA’s fuel economy estimates have been around for decades, advertising non-EPA fuel economy and driving range estimates can lead to deception. Accordingly, it is best to advertise only EPA fuel economy or driving range estimates. By citing EPA as the source of fuel economy or driving range estimates, ads encourage consumers to make comparisons to the EPA estimates for the other models they are considering. Doing so also helps prevent deception by ensuring that consumers do not associate EPA estimates with those of other fuel economy information sources.

The FTC suggests that ads making claims based on non-EPA estimates state that they are based on non-EPA tests, should indicate the source of those tests, should give comparable EPA estimates, and should note all driving conditions and vehicle configurations that differ from those used in comparable EPA tests (e.g., road vs. dynamometer testing, average speed, speed range, hot or cold start, temperature, design or equipment). In television ads, EPA estimates should be twice as large and should remain on screen for at least as long as non-EPA estimates. Audio ads should give equal prominence to EPA estimates. For example, EPA-estimated city and/or highway mpg should be stated before or after each non-EPA estimate in a manner that is at least as audible. In print, Internet, and television ads, EPA estimates should be in clearly legible type that is at least twice as large as that for non-EPA estimates, and should appear against a solid, contrasting background. Do not place EPA estimates in a footnote unless all estimates are in the footnote.


EXAMPLE 1

A radio ad states that a car “is rated at an estimated 28 mpg in the city’’ but fails to cite EPA as the source. To avoid deception, the ad should state whether the mpg estimate is from EPA or a non-EPA source.

EXAMPLE 2

An Internet ad states that ‘‘Independent driving experts took the QXT car for a weekend spin and managed to get 55 miles-per-gallon under a variety of driving conditions.’’ It does not disclose EPA fuel economy estimates, but suggests that the 55 mpg figure is the same or comparable to an EPA estimate. It is deceptive because it fails to disclose whether the estimate is based on a non-EPA test, the test source, the QXT’s EPA fuel economy estimates, and all driving conditions or vehicle configurations simulated by the non-EPA test that differ from those used by EPA.

EXAMPLE 3

An ad states, ‘‘The XZY electric car has a driving range of 110 miles per charge in summer conditions per our expert’s test.’’ Since it provides no additional driving range information, it likely conveys that the 110-mile driving range figure is an EPA driving range estimate. It is deceptive since it fails to clearly state that the test is not EPA’s, to provide the EPA-estimated driving range, and to explain how conditions referred to in the ad differed from those in EPA tests. Thus, consumers are likely to confuse the claim with EPA range estimates.

Driving Modes for Fuel Economy EstimatesAds citing an EPA fuel economy estimate should identify the associated driving type (i.e., “city,” “highway” or “combined” mpg) so as not to potentially deceive consumers who may incorrectly assume that the claim applies to a different driving type.

EXAMPLE

An ad states that a vehicle is rated at ‘‘25 miles-per-gallon per the EPA estimate’’ but fails to note if it is a “highway,” “city” or “combined” estimate. Since the claim likely conveys that the 25 mpg estimate is for combined city and highway driving, not the highway rating it represents, it is deceptive.

Within Vehicle Class ComparisonsAn ad that compares the fuel economy of an automobile to a group or class and not to all automobiles should identify the group or class used in the comparison. Otherwise, consumers could assume that the new automobile is being compared to all new automobiles.

EXAMPLE

An ad claims that a sports car ‘‘outpaces other cars’ gas mileage.’’ The claim likely conveys that the sports car has a higher mpg rating than most or all new cars. If the car’s mpg rating compares favorably to other sports cars, but is only better than half of all new cars, the claim is deceptive.

Comparing Different Model TypesEPA assigns fuel economy estimates to specific model types (i.e., unique combinations of car line, basic engine, and transmission class). Thus, ads citing mpg ratings for certain model types should ensure that those ratings apply to the model type depicted. It is deceptive to state or imply that an estimate applies to a vehicle featured in an ad if the estimate does not apply to that model type.

EXAMPLE

An ad states that the ‘‘PDQ’’ gets ‘‘great gas mileage’’ but depicts the mpg numbers for the ‘‘Econo-PDQ.’’ The ad likely conveys that the claimed mpg rating applies to all PDQ model types, but since the Econo-PDQ has a better fuel economy rating than other PDQs, the ad is deceptive.

‘‘Up To’’ Claims Ads should avoid using ‘‘up to’’ without indicating that certain versions of an automobile (i.e., model types) are rated at a stated fuel economy estimate. “Up to” claims likely suggest that the stated mpg can be achieved if a vehicle is driven under certain conditions. To avoid deception, “up to” claims should be qualified by a clear and prominent disclosure that the mpg applies to a specific model type.

EXAMPLE

An ad states that a VXR will achieve ‘‘up to 40 mpg on the highway.’’ The claim is based on an efficient type of VXR with specific options. Other VXR model types have lower EPA mpg estimates. Since the ‘‘up to’’ claim likely can be interpreted as applying to all VXR model types, the ad is deceptive. To avoid deception, the ad should clearly and prominently disclose that the 40-mpg rating does not apply to all VXR model types, or use language other than ‘‘up to’’ to better state the claim.

Claims for Flexible-Fueled VehiclesAds for flexible-fueled vehicles (other than plug-in hybrid electrics) that note flexible-fuel capability and make a fuel economy claim should clearly and prominently identify the fuel type used. Otherwise, consumers could assume that the stated fuel economy estimate applies to both fuels.

EXAMPLE

An ad states, ‘‘This flex-fuel powerhouse has a 30-mpg highway rating per the EPA estimate.’’ The ad likely implies that the 30-mpg rating applies to the vehicle’s operation on both gasoline and ethanol, when in fact the EPA highway estimate when operating on ethanol is 25 mpg. Thus, the ad is deceptive. To avoid deception, the ad should clearly and prominently qualify the claim, or state the mpg ratings for both fuels.

Questions on the FTC’s Fuel Economy Advertising Guide may be directed to [email protected] or 703.821.7040.


mailto:regulatoryaffairs%40nada.org?subject=

AcknowledgmentsThis guide was prepared for NADA by:

Douglas Greenhaus NADA Chief Regulatory Counsel, Environment, Health and Safety

National Automobile Dealers Association8400 Westpark DriveTysons, VA 22102

nada.org

© NADA 2017. All rights reserved.

http://www.nada.org

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