Disclosures For Auto Loan Promotions

Answered by:

Question:

We are planning a new/used car loan special. The ads will list the interest rate for a new car. What disclosures need to be included in the ad?

Answer:

You can't advertise the "interest rate" for consumer loans without also mentioning the APR (with equal prominence.) If you're advertising closedend loans, then there are no strings attached to quoting the APR. (HELOCs and other openend credits are another story.) If your closedend credit ad goes on to mention a "trigger term", then you will have to provide additional disclosures. The most common "trigger term" is the number of payments or term of repayment. See Section 226.24 and related Commentary for details.

First published on BankersOnline.com 3/4/02