What must be stated if an advertisement includes a rate of finance charge?

When an advertisement includes a rate of finance charge, it is required by law that the rate is expressed as an annual percentage rate (APR). The APR provides a clear and standardized measure of the cost of borrowing on a yearly basis, which helps consumers easily compare different financing options. This requirement ensures transparency and helps to protect consumers from misleading advertisements. By stating the finance charge as an annual percentage rate, the advertisement conveys the total cost of credit over a year, which is crucial for informed decision-making.

The other options do not meet this requirement. A flat fee does not convey the time value of money in the way that an APR does, and simply stating the total amount financed or the duration of the loan does not provide a comprehensive understanding of the costs involved. Therefore, expressing the finance charge as an annual percentage rate is essential for compliance with advertising regulations in the automotive finance sector.