Attorney General Andrew M. Cuomo today announced that his office has issued cease-and-desist letters to nearly 40 auto dealers across New York state whose advertisements for the new federal Car Allowance Rebate System (“CARS” or “Cash for Clunkers”) were misleading and deceptive.

The Attorney General’s Office took the action after reviewing a number of advertisements from various car dealerships that omitted significant requirements that had to be met in order for a consumer to be eligible to get the rebate. These ads mislead consumers into believing that their trade-in vehicle qualifies for the program when it does not or that they are eligible for a several-thousand-dollar rebate, when they are not. The letters order all dealerships to immediately modify promotions and advertisements to clearly explain how the program works.

The “Cash for Clunkers” program provides funds with which auto dealerships may credit consumers $3,500 or $4,500 for trade-ins that may be worth considerably less. It seeks to boost the economy and promote a cleaner environment by encouraging consumers to trade in their current vehicle for a newer, more fuel efficient one. 

“This new federal program not only allows consumers to buy new vehicles that they otherwise might not be able to afford, but creates an enormous incentive for people to choose environmentally-sound, fuel-efficient cars,” said Attorney General Cuomo.  “This program could be a boon for both our economy and our environment, as well as provide much-needed financial assistance to consumers.  Businesses that fail to advertise honestly and try to take advantage of this federal program will face legal action by my office.”

Advertisements by several auto dealerships aggressively promoted the program without fully disclosing its limitations, while other dealers advertised similarly named “cash for clunker” promotions that have nothing to do with the CARS program without making the distinction. Attorney General Cuomo urges consumers to become familiar with the general requirements of the federal CARS program:

 
Dealerships that received cease/desist letters, include, by region:

 
Consumers may determine if a dealer is registered and get more information by going to www.cars.gov or calling 866-CAR-7891. Consumers may also ascertain mpg ratings of vehicles at www.fueleconomy.gov/feg. 

Attorney General Cuomo urges any consumer who believes they are a victim of fraudulent or deceptive business practices to contact his office at 800-771-7755.

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