On July 30, 2024, the FTC's Combating Auto Retail Scams Rule — the CARS Rule — goes into effect. If you've ever sat in a dealership finance office and ended up paying for things you didn't ask for, this rule was written for you.
The FTC estimates it will save consumers $3.4 billion annually. That's not a projection — it's based on documented patterns of dealership overcharging that federal regulators spent years building a case around.
What the CARS Rule Bans
The rule targets practices the auto retail industry has normalized over decades:
Bait-and-switch pricing. Advertising a vehicle at one price and then claiming it's unavailable when you show up — or tacking on mandatory dealer add-ons that push the price above what was advertised — is now prohibited. Dealers must honor the price in their advertising.
Undisclosed add-ons. Dealers cannot add charges for products or services without disclosing them upfront and getting your explicit consent for each one. Finance and insurance products — extended warranties, paint protection packages, gap insurance, tire protection plans — must be listed separately and approved individually.
Misrepresenting costs. Burying charges in monthly payment discussions instead of disclosing the full price of the vehicle is addressed directly by the rule. The "offering price" — what you actually pay — must be clearly stated.
What Dealers Are Now Required to Do
Under the CARS Rule, a dealership must:
- Disclose the offering price clearly at the start of the transaction
- List every add-on product or service separately with its individual cost
- Obtain your informed, affirmative consent for each charge
- Provide accurate information about financing terms
- Not misrepresent any terms of the deal or your eligibility for offers
Military Protections
The rule includes specific protections for active duty military members and their families, who have historically been targeted by predatory dealership financing practices. Dealers cannot misrepresent the costs or terms of any product or service to military consumers.
"The finance office is where the money is made. The CARS Rule puts the customer back in control of what they actually agree to pay for."
What This Means Practically
If a dealer tries to add a $400 paint sealant, a $600 nitrogen tire fill package, or a $1,200 "market adjustment fee" to your deal without asking — that's now an FTC violation. You can refuse each item individually. The dealer cannot make the sale conditional on your accepting add-ons (with limited exceptions for optional packages disclosed upfront).
Keep copies of every document you sign. If you believe a dealer violated the CARS Rule, complaints can be filed at reportfraud.ftc.gov.
EthicalMechanic.org covers the repair side of automotive integrity, but the purchase experience is where many consumers first encounter the industry's worst habits. The CARS Rule is a meaningful step toward changing that.
July 30, 2024 is the effective date. Know your rights before you walk in.