A Car Dealership's Guide to TCPA Compliance

“Thanks for your service appointment! While you're here, check out our new models at special rates!"

This seemingly harmless text could cost your dealership $1,500 per recipient if sent without proper consent. It's not the service reminder that creates risk, it's how easily promotional content can slip in and transform a compliant message into a potential TCPA violation.

Modern dealerships live and die by their communication strategies.

• Service reminders
• Follow-ups
• Promotional offers

These touch-points keep your business thriving. But in with consumer protection laws, one misstep can transform a helpful reminder into a costly legal nightmare.

The Telephone Consumer Protection Act (TCPA) protect consumers from unwanted telemarketing communications.

What is the TCPA?

The TCPA wasn't created yesterday, it dates back to 1991 when telemarketing was dominated by landline interruptions during dinner. Yet this decades-old legislation continues to change marketing digital communications in ways that directly impact your dealership.

The TCPA sets specific rules for how businesses can contact consumers through phone calls, text messages, and faxes. It primarily targets telemarketing activities, calls or texts intended to encourage purchasing, renting, or investing in goods or services. While the legal language gets technical, the fundamentals are straightforward.

Key TCPA Concepts Every Dealership Should Know

• Automatic Telephone Dialing System (ATDS): Any system that can automatically dial numbers without human intervention. This definition is broader than you might think. It can potentially include that smartphone in your sales manager's hand.
• Telemarketing: Any call or message intended to encourage the purchase of goods or services, like that "friendly reminder" about your current sales event.
• Established Business Relationship (EBR): A relationship created through a transaction (valid for 18 months) or inquiry (valid for 3 months). But beware, Indiana, New Jersey, and Wisconsin don't recognize transaction-based EBRs.
• Prior Express Written Consent (PEWC): The gold standard of protection. Written permission from consumers before sending marketing messages through automated systems.
• Unsolicited Advertisements: Any marketing message sent without express consent from the recipient.
• Artificial or Prerecorded Voice: Messages using recorded voices instead of live agents, these require explicit consumer consent.

Important TCPA Restrictions

• No-Go Zones: Never use an ATDS or prerecorded messages to contact emergency lines or hospital rooms.
• Residential Lines: Require prior express consent for prerecorded calls unless it's an emergency or FCC exempt.
• Fax Machines: Generally, unsolicited ads to fax machines are prohibited.

Practical TCPA Compliance for you dealership

The line between "keeping in touch" and "marketing" is razor-thin. That service reminder mentioning your oil change special? You've just crossed from informational to promotional territory, triggering stricter consent requirements.

Consider this scenario that many fixed ops department could face: A customer bought a car from you two years ago. You have their number. Sending a straight maintenance reminder? Generally fine. Adding "while you're here, check out our new models at special financing rates"? Now you're in PEWC territory.

Let's move beyond legal theory to everyday practices.

1. Create Clear Consent Mechanisms

If there's one word that should be plastered across your dealership's communication strategy, it's "consent." The type of consent you need depends on what you're sending:

• Prior Express Written Consent (PEWC): Required for marketing calls or texts using automated systems. Consent must be clearly disclosed, not mandatory for purchase, and signed.
• Express Oral Consent: Allowed but less secure, as proving consent is more challenging.
• Prior Express Consent (PEC): Applies to non-marketing communications and must be substantially related to the existing business relationship.

Your consent language should be crystal clear, not buried in fine print. When customers fill out forms on your website or in person, make the consent statement prominent and specific about what communications they'll receive.

2. Implement Robust Opt-Out Processes

Every text message should include a simple way to opt out (like "Reply STOP"). Every call should inform customers they can ask to be placed on your do-not-call list.

When someone opts out, that request should be processed immediately, not "within 30 days" as many dealerships still practice.

3. Audit Your Third-Party Lead Sources

The "lead generator loophole" may still be open, but that doesn't absolve you of responsibility. Regularly audit your lead providers to verify they're obtaining proper consent. Request documentation of their consent practices and review it thoroughly.

4. Train Your Team Continuously

Your compliance efforts are only as strong as your least-informed employee. Make sure your team understands TCPA rules and knows how to use communication tools compliantly.

Regular training sessions should cover not just basic TCPA requirements but also real-world scenarios your staff might encounter.

Additionally, training your staff to perform effective and transparent vehicle inspections can further build customer trust. Learn more about this by checking out our Video MPI article.

5. Document Everything

In TCPA litigation, the burden of proof falls on your dealership to demonstrate consent was obtained. Maintain comprehensive records of:

• When and how consent was obtained
• The exact language used in consent statements
• Any opt-out requests and your response
• Regular audits of your compliance processes

Important Considerations for All Communications

• Clearly identify your dealership.
• Always provide a clear opt-out option.
• Contact customers only during acceptable times (8 AM - 9 PM).
• Maintain truthfulness in all communications.

Examples of Compliant vs. Non-Compliant Communications

Let's put theory into practice with some real-world examples:

Scenario 1: The Service Reminder

Risky: "Hi John, reminder about your service appointment tomorrow. While you're here, check out our tire sale. 20% off this week only! Reply STOP to opt out."

Why it's risky: Adding marketing content transforms this into a message requiring PEWC.

Safe: "Hi John, this is Riverdale Motors reminding you of your scheduled service appointment tomorrow at 10:00 AM. Reply STOP to opt out."

Why it's safe: Purely informational, existing relationship, clear opt-out.

Scenario 2: The Web Inquiry Follow-Up

Risky: Automated message: "Hello! Thanks for your interest in our vehicles. We have amazing deals this month! Press 1 for sales."

Why it's risky: Prerecorded marketing message via automated system without PEWC.

Safe: A salesperson calls in response to an online inquiry: "Hello Sarah, I'm calling about your interest in the 2023 Highlander. Do you have any questions I can answer?"

Why it's safe: Direct human response to customer inquiry within an EBR timeframe.

Scenario 3: The Past Customer Reach-Out

Risky (without PEWC): Same message without having obtained proper consent.

Why it's risky: Marketing text via automated system requires PEWC.

Safe (with PEWC): "Hi Miguel, Riverdale Motors here with a special trade-in offer this month. We're offering above-market value for your 2019 Accord. Text STOP to opt out."

Why it's safe: Marketing content, but with prior express written consent.

Compliance Is also part of the Customer Experience

TCPA compliance isn't just about avoiding lawsuits, it's about respecting customer preferences and building trust.

When you implement clear consent practices and honor opt-out requests promptly, you're not just checking compliance boxes. You're demonstrating respect for customer boundaries and preferences, which builds long-term loyalty and distinguishes your dealership from competitors who treat compliance as merely a legal hurdle.

The most successful dealerships I've observed integrate compliance into their customer experience strategy. They don't view consent as an obstacle but as an opportunity to demonstrate transparency and respect.

Update on TCPA Changes of 2025

The “lead generator loophole” is a gap in TCPA regulations regarding how consumer consent is managed when their information is provided to multiple sellers through a single interaction, typically on comparison shopping or lead generation websites.

Initially, the FCC aimed to close this loophole in January 2025 by introducing a “one-to-one consent” rule, meaning each consumer would need to individually consent to receiving autodialed calls or texts from each specific seller separately.

However, the Eleventh Circuit Court recently vacated these rules, finding the FCC exceeded its authority. The practical effect? The "lead generator loophole" remains open, giving dealerships more flexibility in obtaining consumer consent through comparison shopping websites.

What this means for your dealership:

While the court decision provides some breathing room, relying on this loophole isn't a long-term strategy. Best practices still suggest obtaining clear, direct consent whenever possible.

Kimoby is the Solution for TCPA-Compliant Text Communications

Kimoby is a powerful Dealership Engagement System (DES) designed specifically for automotive dealerships. It simplifies managing customer interactions while ensuring your communications remain TCPA-compliant.

With Kimoby, you can:

• Easily manage and document customer consent.
• Automatically include clear opt-out instructions in every text message.
• Track and promptly respond to opt-out requests.
• Integrate seamlessly with your dealership’s management systems, ensuring consistent compliance practices.

Using Kimoby as your dealership texting software and customer engagement tool can help you stay on top of regulatory requirements effortlessly while enhancing the overall customer experience.

Conclusion

The TCPA is a critical legal framework that demands careful attention from car dealerships. Maintaining compliance not only avoids costly lawsuits but also builds trust and goodwill with your customers. However, this guide is not a substitute for professional legal advice. Consult a specialized attorney to ensure full compliance and to navigate the complexities of the TCPA and related FCC regulations effectively.

Sources

• Telephone Consumer Protection Act 47 U.S.C. § 227
• Internal DNC Policies Not Prerequisite to Using EBR Defense, Ohio Southern District Holds

Frequently Asked Questions

My dealership is located in Canada. What are the requirements?

Canadian dealerships must follow the National Do Not Call List (DNCL) regulations, ensuring proper registration and maintaining internal opt-out lists. Remember that you're responsible for the actions of employees, agents, and third-party lead generators.

Does a customer providing their phone number imply consent?

Generally yes, but that consent must be clearly connected to the specific type of communication you're sending. A number provided for "service updates" doesn't automatically grant permission for marketing messages.

Can consent be revoked?

Absolutely. Customers can revoke consent at any time through any reasonable method, such as texting "STOP" or verbally requesting to opt out.

What's the worst that could happen if I violate the TCPA?

Violations can result in penalties of $500 to $1,500 per violation, which adds up quickly when you're sending hundreds or thousands of messages. Factor in legal fees and potential class-action lawsuits, and you're looking at a significant financial hit.

Can I send service reminders without written consent?

Yes, as long as these messages are purely informational and don't include marketing content. The moment you add promotional material, you've crossed into PEWC territory.

Do I need separate consent for each message I send?

Not necessarily. Initial consent typically covers ongoing communication related to the same transaction or inquiry, provided the customer hasn't opted out.