How Honda's 'Ad Police' Crack Down On Dealerships

Whoa, there, Mr. Honda Dealer! You think you can just advertise the cars on your lot however you damn well please? No, sir. There are rules, and the Honda Police are here to make sure you follow them. Or else.

Automotive News has an unintentionally hilarious story on Honda's "advertising police," the informal name for their compliance department run by an outside agency based out of St. Louis.

This group cracks down on dealerships that break their rules, like advertising vehicles below invoice price, showing cars with the wrong trim levels, or using words like "blow out," "liquidation," "inventory reduction," "close out" or "we won't be undersold." Honda does this to protect the brand and resale values.

Of course, all automakers set guidelines for their dealers, but Honda is well known as being among the most restrictive, the story says. And the consequences are real: too many violations mean dealers could lose Honda's $400 per vehicle "marketing assistance."

There are various levels of violations involved here. The most serious include incorrect vehicle descriptions or advertising below retail price. Slightly lesser ones include typos and language in ads.

Understandably, some Honda dealers aren't fans, especially as the company's sales have been a bit soft this year:

"I'd like to see Honda take the handcuffs off of us and let us be aggressive," said Doug Waikem, owner of Waikem Honda in Massillon, Ohio. The Waikem family also owns Ford, Hyundai, Kia, Mitsubishi, Nissan and Subaru dealerships in Massillon.

This year, he got a letter from the Honda Compliance Headquarters after his store advertised a Civic on TrueCar.com for about $100 below the invoice price. "You have to price below invoice to get noticed on TrueCar," Waikem said, adding that his Hyundai and Kia stores pull in significant traffic by offering certain models below invoice.

The Honda Waikem dealer has two strikes against him this year; a third means he will lose his marketing assistance.

Even if you won't be undersold, keep it a secret, Honda dealers! You don't want the ad police coming after you.