Car Giveaways: Lets talk about the industry
Lets face it, if you’ve been on social media in the past 3+ years, you’ve more then likely seen many car giveaway competitions all over your sponsored ads.
What is a Car Giveaway?
There’s certain car giveaways that offer promotions to customers who sign up for an ongoing membership. This means that while a reoccurring member you’d be in each draw to win a car. In a nutshell, these car giveaways are a trade promotion which automatically enters members into competitions to win prizes.
What is a trade promotion?
A trade promotion competition involving chance is called a Trade Promotion Lottery. These are sometimes referred to as draws. A trade promotion is used for businesses to promote their goods or servers, these run as a giveaway competition. If you’re looking to run your own Trade Promotion in Australia, please keep in mind that each Australian state has different legal structure surrounding trade promotions. The business owner of the car giveaway promotion would need to be ontop of all the varies laws and gain legal advice.
What Permits are needed to run an Car Giveaway?
Please Note: this is subject to change.
If your business is looking to run a trade promotion style Car Giveaway, they may need to apply for a permit under the relevant state law. There’s many factors on what requires a permit, we suggest you get legal advice in this area however here are some of the factors:
- The prize value of your trade promotion;
- The type of trade promotion you are conducting
- The location where your trade promotion is conducted
- Game Of Chance Trade Promotion
What is a Game Of Chance?
Games of Chance are competitions where a degree of chance is involved in determining the winner(s). A game of chance provides all entrants with an equal chance of winning and picks a winner at random. The operator of the promotion is not able to factor in any skill when determining the winners. The game of chance is the same as a ‘game of luck’.
Terms and Conditions of your Car giveaway
Businesses have to ensure they have clear and thorough Terms and Conditions (T&Cs) before promoting or running their competition. When obtaining permits you would need to submit these to the relevant regulator.
T&Cs are an important part when running any car giveaway. These are crucial as it’ll outline your liability as a business and may help you avoid any large fines, legal disputes and penalties. Remember that the T&Cs will be a legally binding where each entrant will have to agree upon when entering your car giveaway competition. Things like liabilities and more will be set out in the T&Cs.
When creating T&Cs some questions to think about are:
- The rights that each entrant has
- Operating model for the competition
- Faulty Prize, who’s liable and what happens
- What happens when the prize selection system malfunctions
What Types of Car Giveaways are popular?
Most car giveaways buy interesting cars, something that stand out. This would includes classic car giveaways where vintage and collects cars are included as a classic car giveaway prize. You’ll also find many super car giveaways with a lot higher stakes for the winner of each supercar car giveaway prize.
Key Takeaways and Recap
Car Giveaways and trade promotions are good advertising tool. This will allow you to gain brand awareness and promote new products. When running any business you might need a motivational online course to help you stay accountable for your business.
You do not need a permit or authority for trade promotions that involve games of skill. Generally speaking, if the prize pool for your game of chance is:
- less then $3,000, you do not need a permit;
- between $3,000 and $5,000, you only need a permit in the ACT;
- $5,000 or over, you need a permit in the ACT, SA and NT; and
- $10,000 or over, you need a permit in the ACT, SA, NT and NSW.
Check the regulations in each state or territory before committing to your marketing campaign. Businesses should have clear competition rules set out in Terms and Conditions and Privacy Policies before running their business or promotion. Businesses should watch out for any potential misleading and deceptive conduct in relation to advertising and prizes of their competition to avoid hefty penalties under the Australian Consumer Law.
Please Note: The advise on our website is general, we aren’t lawyers and highly recommended speaking to a legal team prior to proceeding with your trade promotions or Car Giveaway. We can however build you a professional website for your Car Giveaway competition that will be easy to use and help you convert sales from your marketing advertising campaign.