Ad description
A national press ad for the Lexus RX450h, which appeared on 17 August 2011, stated "THINK OF IT AS A LUXURY SAVINGS PLAN. THE FULL HYBRID LEXUS RX450h COSTS UP TO £8,879 LESS TO RUN THAN ITS COMPETITORS. There's never been a better time to save money on servicing, road tax, fuel, B.I.K tax and insurance. Money you could be spending on something much more interesting, like the holiday of a lifetime, improving your house, or even a new boat ...". The headline claim linked to small print at the bottom of the ad which stated "The RX450h is up to £8,879 cheaper to run based on fuel and B.I.K. [Benefit in Kind] tax over 3 years for company cars owners, when compared to equivalent competitor models. For full details of how this saving has been calculated, please see the ‘See Your savings’ tab on www.lexus.co.uk/savings". Further text in the small print stated “RX450h ... fuel consumption figures: urban 43.5 mpg ... extra-urban 47.1 mpg ... combined 44.8 mpg ...”.
Issue
A reader challenged whether the savings claim of 'up to £8,879' was misleading and could be substantiated.
Response
Lexus believed the headline claim drew the reader’s attention to the qualifying footnotes at the bottom of the ad. They believed the footnote made clear that the headline savings claim was based on savings on fuel and Benefit In Kind (BIK) tax over three years. They noted that the same footnote directed readers to their website which set out the BIK and fuel costs for the Lexus RX450h compared with five other similar models. They said that the foot of that comparison table, which appeared on their website, clearly cited the source of information for those figures.
Lexus explained that they were required to include the official Fuel Consumption figures produced by the Department of Transport measured in accordance with EU Directive 80/1268/EC. They did not believe the ad suggested that they themselves had tested the fuel consumption figures or that they suggested those figures could actually be achieved in normal road conditions.
Lexus said that a number of factors could affect a car’s fuel consumption figures including whether a car was warmed up on starting, was driven at differing speeds, use of air conditioning, heavy loads, age and mileage of a car, and tyre pressures. They also said that repeated starts and stops could cause a richer fuel mix, which in turn could increase fuel consumption. They said that by law, they could not quote any other fuel consumption figure in their material.
Lexus provided evidence which they believe demonstrated how the RX450h was up to £8,879 cheaper to run than its competitors. They explained that the fuel costs were based on mileage, fuel price per litre/gallon, and fuel consumption figures, and that they had factored in an increase in fuel costs over years two and three. They calculated that the fuel costs over three years for a Lexus 450RXh would be £1,290 based on 3,000 miles per year over three years accounting for a 7.5% increase in fuel cost in year two and a 5% increase in fuel cost in year three and working on a fuel consumption figure of 44.8 mpg (the combined cycle fuel consumption figure).
Assessment
Upheld
The ASA noted that the headline savings claim "THINK OF IT AS A LUXURY SAVINGS PLAN. THE FULL HYBRID LEXUS RX450h COSTS UP TO £8,879 LESS TO RUN THAN ITS COMPETITORS” was linked to small print which stated that the savings claim was calculated on BIK tax and fuel costs over three years for company car owners when compared to competitor models. However, we considered that the inclusion of the reference to saving money on servicing, road tax and insurance, which related to retail customers, and which appeared immediately underneath the headline claim, may have caused confusion when these were not included in the calculations. Whilst the small print explained the basis of the savings claim, we considered that it was not sufficiently clear from the ad that the headline savings claim of “£8,879” related to company car drivers, rather than retail customers. We were satisfied that the 3,000 mile figure used in the calculations was a realistic private mileage figure for company car drivers and that the cars used in the comparison were comparable in terms of cost, engine size and specification.
We understood that all new cars were tested in a number of ways under many different EU Directives and that those tests could be carried out at independent testing facilities or by the manufacturer under the supervision of a third party. We understood that the purpose of those tests was to ensure comparability amongst the new models and provide consumers with a means of comparing new cars. However, we understood that there was no provision within those tests to provide fuel consumption figures likely to be experienced in ‘real life’ driving. We understood that many different factors were likely to affect fuel consumption in real life driving such as weather, driving styles and condition of the car – factors which would not be replicated in a laboratory environment. Consequently, we understood that the official fuel consumption figures may not be replicated in real life driving conditions and we therefore had concerns about savings claims in relation to fuel costs being based on those figures.
We noted that Lexus had used the Vehicle Certification Agency (VCA) official fuel consumption figures for the combined cycle in the calculation of fuel costs for all the cars in the comparison and consequently, we considered that the fuel-cost figures labelled “3,000 miles private fuel cost” quoted in the ‘See Your Savings’ tab on the Lexus website would not be representative of real life driving fuel costs. We understood that the actual fuel costs experienced by drivers for those cars could be more. We noted the difference between the fuel cost figures for the Lexus RX450h and the other cars ranged from £256 to £634 which only made up a small percentage of the overall savings claim. We noted that the main difference in savings came from the BIK tax and that the difference between the Lexus RX450h and the other cars ranged from £5,635 to £8,245.
We understood that Lexus had assumed a fuel price increase over three years in their calculation of the savings claim – a 7.5% increase in year two and a 5% increase in year three. Whilst we understood that assumption was based on the current economic climate, fuel data from the AA, inflation and the Retail Price Index calculator, we noted that Lexus no longer held supporting information for that assumption. However, we considered that it was possible that fuel prices may decrease over the three-year period which therefore, meant that fuel costs would be lower and the savings claim would not have been as high.
Therefore, because the savings claim was calculated using official fuel consumption figures and the fuel costs for all the cars compared would not be representative of real life driving fuel costs, and because they had assumed an increase in fuel prices over the three years when that may not be the case, and because the ad did not make sufficiently clear that the savings claim related to company car drivers, we considered the claim that a Lexus RX450h cost ‘UP TO £8,879” less to run than its competitors had not been substantiated and therefore, was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising) and 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation).
Action
The ad must not appear again in its current form. We told Lexus not to make such savings claims using official fuel consumption figures.
