Press Release

Washington Atty General Announces Million Dollar Settlement with Carmakers

11/22/96

$1 Million Settlement Reached With Auto Manufacturers

SEATTLE, Nov. 21 -- Attorney General Christine Gregoire
today announced that Washington with 22 other states and the Federal
Trade Commission, have reached a $1 million settlement with four auto
manufacturers that promises to change the way auto leases are
advertised nationwide.

The settlement with General Motors, Honda, Isuzu and Mitsubishi
involves deceptive "0 down" and "nothing down" auto leasing
advertisements that offer consumers a new car with no down payment.

"The ads led consumers to believe they could lease a new car with no
money down," said Gregoire. "Our investigation revealed consumers
typically ended up paying nearly eight hundred dollars to take home
the car.

"The settlement requires auto leasing advertisements to disclose
'clearly and conspicuously' the total costs and fees the consumer must
incur to drive the car away," she said. Gregoire further explained
that disclosures of lease terms must be readable and understandable to
consumers.

Automobile leases have become more popular in recent years. In 1995,
25 percent of new cars delivered directly to consumers were leased,
compared to 10 percent in 1989. Gregoire noted that leasing a car can
be more complicated for consumers who are used to buying one.

"We've found that a big part of the problem is the advertising," she
said. "The fine print in these ads makes it difficult for consumers to
fully understand the terms of the lease."

The investigations and negotiations were conducted jointly with the
Federal Trade Commission in an unusual show of force by state and
federal law enforcement officials.

"When federal and state officials work together like this, it gives
advertisers a no nonsense signal that what they're doing has to
change," Gregoire said. "It also tells companies what they need to
know to avoid trouble."

Other states joined in the agreement are Arizona, California,
Connecticut, Florida, Hawaii, Idaho, Iowa, Illinois, Kansas, Maryland,
Massachusetts, Minnesota, Missouri, New Jersey, New Mexico, Nevada,
New York, Pennsylvania, Tennessee, North Carolina, Nebraska and
Indiana.

The states are members of a group that has been investigating auto
lease advertising practices across the country. Fifteen of those
states, including Washington, recently sued Mazda for advertising "0
down" deals.