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In the drive toward Combating Auto Retail Scams, the FTC’s just-announced CARS Rule is a big win for consumers, who lose billions of dollars in wasted time and money each year to illegal practices like bait-and-switch tactics and junk fees. It’s also a big win for honest car dealers who strive to apply established truth-in-car-buying principles at their dealerships and shouldn’t have to compete against dealers who don’t. Why is the CARS Rule such a game changer and what compliance guidance does the FTC have for industry members? Read on for more information.

The CARS Rule is the culmination of a years-long effort to ensure truth and transparency in the process of buying and leasing cars and trucks. The FTC published a proposed rule last year and received thousands of comments from dealers, consumers groups, and others. Based on what commenters had to say and the FTC’s law enforcement efforts to combat auto retail scams, the CARS Rule restates established consumer protection principles in straightforward language specific to the auto industry and includes new remedies if a car dealer engages in certain deceptive or unfair practices.

By stating clear rules of the road that apply across the board, the CARS Rule means consumers can face the car shopping process confident that established standards that apply to any other business also apply to car dealers. What’s more, honest car dealers will be less likely to lose a sale to unscrupulous competitors who resort to underhanded tactics to seal the deal. And the CARS Rule does that without requiring consumers or dealers to fill out any new paperwork. 

What does the CARS Rule require? You’ll want to consult the FTCs new CARS Rule Dealers Guide, but in brief, the CARS Rule:

  • Prohibits misrepresentations about certain material information;
  • Requires dealers to clearly disclose the offering price – the actual price anyone can pay to get the car, excluding only required government charges. Before they visit the dealership and throughout the transaction, consumers have the right to know the drive-off-the-lot price. If a dealer mentions optional add-ons, the dealer has to tell the consumers they can say no. And if discussing a monthly payment, the dealer has to tell the consumer total payment information;
  • Makes it illegal for dealers to charge consumers for add-ons that don’t provide a benefit;
  • Requires dealers to get consumers’ express, informed consent before charging them for anything.
FTC CARS Rule infographic



The upshot? In case it wasn’t already apparent, car dealers who make deceptive claims about key parts of the transaction; hide the actual price through the use of hidden fees, misleading add-ons, or unclear payments; charge consumers for add-ons that don’t provide a benefit; or charge consumers for anything without the person’s express, informed consent now could have to pay up.

For many dealers, the long-standing truth and transparency principles of the CARS Rule are already business-as-usual at their business. But for those who cut corners, bait and switch, tell tales, and conceal costs, the CARS Rule ushers in a new era in consumer protection.

Is your dealership in compliance with the Rule? A new Dealers Guide (the full name is FTC CARS Rule: Combating Auto Retail Scams – A Dealers Guide) offers to-the-point advice and answers questions dealers may have. Subscribe to the Business Blog for upcoming posts to help you make sure your practices measure up.


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The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

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Earl Stewart
December 13, 2023

I congratulate the FTC on this action and I condemn the auto dealers, their associations, and auto manufacturers’ associations for rallying phony comments from car dealers posing as car buyers. SHAME ON YOU!

Allan Avila
December 20, 2023

In reply to by Earl Stewart

I applaud this move from the FTC. I am sure this rule will benefit everybody even the big brand new dealerships.
But since this only takes effect on June/July of next year, what kind of protection can I expect from a deceptive maybe even fraudulent sale two weeks ago?

January 02, 2024

In reply to by Earl Stewart

Business as usual. We have been selling vehicles since 1990 and the only way to do it is the honest way. We do have a right to add items to vehicles and charge for them as long as there is complete transparency. Consumers come in and demand thousands of dollars in discounts so we feel it only fair to add products like tint that add value and charge for it. We have expenses to pay just like all other businesses. The truly funny thing is how people will throw a fit if a dealer has added an item to the vehicle and discloses it and yet, they will go in to the Apple store and spend $1000 or more on a phone and won't bat an eye. Truly amusing.

Alan Martin
January 08, 2024

In reply to by David

It's because dealers charge 3x to 10x more than it would cost the consumer to buy the exact same thing off the dealers lot. If your customer really wants these items added then add it during the purchase, not before. And the Apple Store never adds "market value" "doc fees" "nitrogen". You are part of the problem, not the solution.

January 24, 2024

In reply to by David

You find it only fair to add products and charge for it because consumers come in and ask for discounts ? That statement alone tells the tale of the unsavory business practices that go hand in hand with car sales . Let me guess , you're an owner and would never give us your name or dealership name , I certainly do not wonder why , thank you for being part of the problem .

February 21, 2024

In reply to by Earl Stewart

I also applaud the FTC for stepping in and doing something to help consumers.

Alan Martin
January 08, 2024

Thanks FTC for finally getting involved and attemping to put a stop to these horrible dealers. No other business allows such fraud to the consumer and the car dealers have organized to commit such crimes. To just go to another dealer to have them commit the same fraud too is beyond frustrating. Their claim that "to be honest" is going to add time to the purchase is the most ridiculous excuse I've ever heard. I've spent hours just to try to find an honest dealer to no avail. July 31st can't come fast enough....

February 21, 2024

I wish this rule was already implemented had to get a new car due to a wreck and the car dealership inflated my families income 5-6 fold to make a sale back in December 2023, I informed the financial institution and they said there was nothing they could and that all they were worried about was the car payment ( their exact words ). Placed my family in an un affordable car for my family. They took full advantage of us, I went online found a car online at the dealership that was almost identical to the one we had set a time to go look at it the next day the salesman came out and said he had been trying to find and locate it all morning.

These dealerships and even the financial institutions have got bad.