Properly marketing EV incentives is key to compliance
Incentives are a main driver of electric vehicle sales, prompting dealers and manufacturers to alert consumers to potential rebates and tax credits available to them while they search for an EV.
Dealers and lenders must ensure any language targeted to consumers regarding potential tax credits they could qualify for when purchasing an EV is accurate and includes the proper caveats, Robert Gage, partner at Hudson Cook, told Auto Finance News.
“There is nothing new in the law, but there are novel practices that dealers or finance companies are engaged in with respect to how they’re marketing [EVs],” he said, adding that the language should make clear that consumers may not qualify for the benefits mentioned.
“Any marketing claim that a dealer or finance company makes should always be subject to some kind of compliance review to make sure that the claim is not deceptive.” — Robert Gage, Hudson Cook
The language of incentives
As EVs gain traction in the industry, more dealer websites are likely to present incentive language. Toyota allows EV shoppers to calculate potential EV tax credit savings through a tool powered by Folsom, Calif.-based EV Life. The fintech also built a custom incentive finder solution for Nissan, presenting consumers with estimated savings across federal, state and municipality EV incentives based on parameters such as ZIP code, household income and tax filing details.
“Figuring out how your monthly payment is going to look for individuals is an important element to get to in the sales process,” David Gemperle, an attorney in the auto finance group at Nisen & Elliott, told AFN. “The credits are complex enough that it’s not as simple as saying: ‘Here’s your estimate of your monthly payment. We’ve gone ahead and taken off the EV credit in calculating this.’ It’s important to include, to the extent you can, the benefits of those credits.”
EV Life’s software tool includes disclosures alerting consumers that they may have to meet requirements to qualify for state and federal rebates and tax credits, and requires consumers to apply for the benefits on their own. Those disclosures are necessary when listing potential savings online or in marketing materials, Hudson Cook’s Gage said.
“Making blanket statements about the tax benefits that consumers will get if they buy an EV is unwise, because whether you’re going to get tax benefits or not, at least for some consumers, might depend on their own tax position,” he said. “While developing marketing materials around the tax benefits of EVs, it would be wise to run those by legal counsel that understands the tax benefits.”
Clarity and compliance
Lenders must ensure that language included on dealers’ websites is compliant, as they, too, could be subject to any consumer claims against dealers in the event consumers felt misled, John Redding, partner at law firm Alston & Bird, told AFN.
“It’s a marketing advertising issue; we’ve seen this out of the Federal Trade Commission for as long as I can remember where they look at dealer advertising,” Redding said. “They’re quite clear that advertisements have to be accurate. If they’re not accurate, that can be misleading or deceptive. We see these kinds of actions every year.”
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