FTC Announces New Rule Targeting Auto Purchase Scams, Including Bait-and-Switch Tactics and Hidden Junk Fees

The FTC has finalized the Combating Auto Retail Scams (CARS) Rule, which aims to protect consumers during the car purchase process by preventing common scams, including bait-and-switch tactics and hidden junk fees. According to FTC estimates, the rule is expected to save customers more than 72 million hours and $3.4 billion annually. It also includes language protecting members of the military, who are frequent targets of predatory practices. The CARS Rule passed with a 3-0 vote and will take effect on July 30, 2024. NADA President and CEO Mike Stanton came out against the rule, arguing that it will “lengthen the car sales process by forcing new layers of disclosures and complexity into the transaction.” FTC Chairwoman Lina Khan claims that it will aid in “saving people time and money and protecting honest dealers.”