Consumer Alert
The new CARS Rule: What you need to know
Whether you’re excited about buying the car of your dreams or just trying to make your budget stretch to get reliable transportation, the car buying process can be stressful. It can also be costlier than expected, because of misleading ads and hidden fees at the dealer. The FTC’s new Combating Auto Retail Scams (CARS) Rule aims to change that by stopping bait-and-switch tactics and hidden fees.
Here’s what the Rule means for car and truck buyers like you.
Pricing and payments
- A dealer must tell you the offering price, which is the full price of the vehicle. The offering price must include all costs and fees EXCEPT for required government fees, like taxes and license and registration costs.
- If a dealer is quoting monthly payments, they must tell you the total amount you’ll pay for the vehicle. And if they offer you a lower monthly payment, they must tell you if it will raise the total cost of the vehicle.
Add-on products or services
- You have the right to refuse any products or services that increase the price of the vehicle. Like what? Rustproofing, protective paint coatings, extended warranties, guaranteed asset protection (GAP) agreements, and wheel and tire warranties.
- A dealer can’t charge you for products or services that have no benefit like
- a duplicative warranty
- a service contract for oil changes on an electric vehicle
- nitrogen-filled tires that contain no more nitrogen than normally exists in the air
- a GAP agreement that doesn’t cover your vehicle or your neighborhood or other parts of your deal
Real consent for all charges
- A dealer can’t charge you for any item unless they’ve told you what it is and how much it costs, and you’ve agreed to the charge.
The CARS Rule will make it easier to shop around for a vehicle based on the actual price. And the FTC estimates that car buyers will save $3.4 billion per year.
Stay tuned in the weeks and months to come for more advice about buying a car or truck at a dealership.
[Note: This blog was updated on January 24, 2024 to remove the Rule’s effective date. The rule has been paused pending judicial review.]
Image
It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.
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.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.
The problem is the rule doesn't start now.
In reply to The problem is the rule… by David Castle
Seriously? I've never heard of any dealer charging for oil change contracts on an EV. If they did and someone isn't smart enough to know that then they probably shouldn't be driving. That aside, none of the mentioned items have ever been required and I've absolutely never had a problem with a dealer when I just told them that I'm not buying any extras. The dealers can't force anyone to buy a car with paint protection add ons or anything else. If they tried it, then just go buy the car somewhere else. Leaving a Google review is more productive than more government rules.
In reply to Seriously? I've never heard… by Mark
Good morning Mark,
I had fallen a victim of this extra charges from dealers, such as extended warranty and additional insurance, even though I had my own insurance already.
I did a trade in before I got my present car, the dealer never told me my trade in valued, the car I purchased was $17,000 and I signed the financing paper, but the dealer forged and my signature and also changed the car price to $22,000, now the total price that I have pay back is $35,000, I have been dealing with this issues for over 1 year, but I not got justice yet, this seller took advantage of me because I am female.
I have filed this case with BBB and consumer affairs ,
Dealer offers upgrade or fix mechanical issues on the car.
but I disagreed because it is a case of false price, forged signature and dealer open bank account on my name and without my consent.
I am still trying to find help on this issue.
Have a nice Day
In reply to Good morning Mark, I had… by Emerald
Americans must stick together and stop bickering- come together. There is an advocacy group out of California that has helped a neighbor in another State; but could not represent them in Court for Georgia. A Dealer Car Max allows lenders to do business in Georgia that are being Sued that overcharge/inflated loan amounts or even forged your signature on Paperwork from CarMax Dealership. The California Advocate Group was able to step by step guide them. Georgia does Not have anything like that Group. In fact, the loan company is in business under a different Name and is being being Sued in another State. Not sure of the trade name that the loan company operated now; but they do change the terms of the Loan from the dealer to over 23% as increasing the price. CarMax doesn’t help either as they allow this to go on. Pleading- We don’t have control what or which Lender does whatever they want. Just Sell those cars. Bad Car Lenders get away. Americans that need help pay the price. I hope the FTC and other Non-Profit Groups would work together to STOP these thieves that take Our hard earned money from us. Being Sued in One State go Open Up shop in another State under ANOTHER NAME. disclaimer: may not have proper names or made errors in recalling information it is not my intent.
In reply to Good morning Mark, I had… by Emerald
Emerald,
What you describe likely constitutes several crimes including forgery, filing a false instrument, bank fraud and possibly others. I would suggest that you bring all your documentation to your local District Attorney's office.
In reply to Emerald, What you describe… by Barry
Barry, I agree. Emerald, I sure hope you contact "someone", even if they refer you to someone else, you shld hold that dealership responsible.
I wish this wld've been in effect 6 yrs ago. The dealership where I purchased my car, took advantage when I took my car in for a heater core shortly after I purchased the vehicle, with the agreement to replace the heater core that went out before I purchased the vehicle. A yr later, I took the vehicle back in bcuz the heater core went out again (apparently, the dealership did not replace the heater core the first time). They had my vehicle for 23 days for a simple heater core that wld've taken 1 - 2 days at most. The awful thing was that my 90 yr old father who lived 2 hours away was in hospice dying. They wld not give me a vehicle to go say goodbye to my father. They wld give me excuses that the truck that delivered their parts had broken down, etc. After the funeral I went to pick up my vehicle. It had over $1,800 dollars damage. The windshield had been replaced, there was serious damage to the doors where they pushed my doors into a steel beam to keep the doors open while they took out the windshield, etc. I went to an atty & he said the judge wld only tell me, "you have insurance to cover that". :(
In reply to Good morning Mark, I had… by Emerald
Contact a attorney that deals with consumer affairs. Me & wife bought a used vehicle that was clearly advertised as AWD. 2 days later found out that it was not. Got a attorney involved & we got $6000 refund,attorney got $2000 of that $6000
In reply to Good morning Mark, I had… by Emerald
I literally just made a complaint of something similar and i am forced to get a higher loan on a better vehicle because im a female. No lawyers would help so now i figured if i have to pay what im paying atleast ill do my research and get something worth it. Im sorry you have experienced this also.
In reply to I literally just made a… by lexus
Report the Dealer to your local DMV Department of Motor Vehicles I think you will get very quick action. Dealers don't want DMV coming in and doing investigation on other possible fraudulent activities. They can shut a dealer down. Once the dealer knows DMV is involved your problem will be solved :)
In reply to Report the Dealer to your… by Laszlo
DMV only covers for dealerships and themselves. Brought a Range Rover in for a windshield 9 weeks I get a flood vehicle back and no windshield fixed brought it to DMV inspection couldn't verify the vin and fake title they said it's under investigation with a Dave Fruwirth in the fleet dept. 3 yrs no answer and why would it be under fleet.
In reply to Good morning Mark, I had… by Emerald
Hello Emerald,Have you tried sending all the information you have to your State Attorney General? If not I would start there.
In reply to Good morning Mark, I had… by Emerald
All of this comes from the fact that cars are the only retail item that aren't supposed to make money. Consumers want dealerships to discount everything to the point where the dealer is losing money, so the only way they can make a profit is by selling extended warranties and so on. Jewelry, furniture, and many other avenues mark their products up by a ridiculous margin. A normal car has barely any markup on it at all from what the dealer owns it for, to the MSRP. I understand hating that car-buying is scary, but these people are just trying to feed their families too. Most sales people are very friendly. and most managers and owners are family-men and women. If everyone wants the fear-factor to go away, everyone should just agree to let the dealer make a few thousand dollars on the transaction, and I guarantee they will happily serve you and take very good care of you. But instead, what most people do is go in and demand the lowest possible price, blow up social media about how awful the dealership was, and demand extra stuff for free. See the problems we as a society have created for the car business?
In reply to Good morning Mark, I had… by Emerald
Start buy purchasing at a reputable franchise dealer and not a rock lot privately owned bad credit buy here pay here auto broker. Too many government regulations to protect the .000001% of the idiots in the world get in the way of good business.
In reply to Good morning Mark, I had… by Emerald
I brought a vehicle at a dealership. They added a extra charges cause I used a credit card. Can they do that?
In reply to Seriously? I've never heard… by Mark
Have you ever bought a used car? I can't believe how much bait and switch still goes on. I have the internet on my phone and they still deny they said this or offered that. Anything the FTC that helps stop these scammers is appreciated.
In reply to Seriously? I've never heard… by Mark
True. I just traded our new truck for a newer SUV and the ridiculous hoops I had to jump through to keep from getting cheated were a nightmare. They now have a lower rating and lost sales. Their parent company immediately trained them again. They Probably trained them to smile more while they are selling worthless add ones that nobody needs and don't get back when you trade in within a year but lesson learned. Will be going to a different dealership and Company next time. More laws just mean more Government fees. That seems to only help the politicians, not the people
In reply to Seriously? I've never heard… by Mark
Sure they can. They simply add the bogus charges to the car price and if you refuse to pay, they don't sell you the car. It happened to me more than once.
In reply to Seriously? I've never heard… by Mark
Lots Lots of young people and 1st time buyers don't know that they don't have to buy extended warranty, etc. so these laws help those people. This law is not intended for someone that knows everything about shopping for, and doing research on cars. Sales dept knows how to decieve and misinform.
In reply to Seriously? I've never heard… by Mark
I agree with you Mark. I know some dealers try to do all the things people stated in the replies, but they can't force anyone to buy, or accept the terms. If a dealer attempts these things, you are at the wrong dealer. Leave and write a Google review.
In reply to Seriously? I've never heard… by Mark
Well said. Lol
In reply to Seriously? I've never heard… by Mark
This gentleman could pass as an advocate for a car dealership. As much that he portends to know, not all consumers are as savvy as he, or perhaps they’re more so. Sir, you don’t know what you don’t know.
In reply to Seriously? I've never heard… by Mark
We need government rules in cases like this a google review isn’t going to do anything for the people who don’t know about google or justice isn’t done with google regardless.
In reply to Seriously? I've never heard… by Mark
I agree you have to be pretty dumb to be paying for oil changes on an electric vehicle they have no business even buying a car by themselves in that case they could be sold anything and everything
In reply to Seriously? I've never heard… by Mark
I applaud the FTC for doing this.
I wish they would have done it sooner.
Not everyone has an electrical/ mechanical engineering degree.
My 78 year old mom doesn't.
If everyone knew the meaning of integrity we wouldn't need any laws.
Unfortunately that's not the case.
In reply to The problem is the rule… by David Castle
When does it start?
In reply to When does it start? by SUSAN
It says the Cars Rule takes affect June 20, 2024
In reply to When does it start? by SUSAN
I stated the wrong date.
The correct date according to the notice I just read, the CarsRule starts July 30, 2024.
In reply to The problem is the rule… by David Castle
That is the sad part, actually. And in that case, what kind of protection can I expect if the deceptive maybe even fraudulent sale happened just two weeks ago?
But I do appreciate and applaud this move.
GREAT JOB
THANK YOU
Thanks especially for the tip on the Nitrogen filled tires.
I want to thank the FTC for this new rule when it comes to purchasing cars. I have turned in a dealership with what their comptroller was doing to the FTC and to the state of Florida I have also come across car dealerships doing bait and switch because they didn't even have the car on the lot this company I did not turn in. If I did not have experience with a car dealership and how they operate I would not have known the difference but having 8 years experience working for a Ford dealership I did know the difference. People do not know how the as is works on vehicles and dealerships do not explain this to them. I work for a printing company when this one came out and I did ask the NADA what this stood for and they explained it to me. I do have a hard time buying a car because no one wants to work with me which tells me their integrity. Knowledge is power I do hope he will take advantage or learn what their options are.
Thank you again
Good to know. Thank you. Recently I used a car broker to transition from my lease to purchasing my car. It was great not to step foot in a dealership!
In reply to Good to know. Thank you… by Diane
can you advice me on what car broker should i use to do the same??
People have been getting ripped offed for too long. Thank you.
Thank you. It is about time these deceptive practices are ended.
The CARS rule is similar to the rules in Ontario. There, a dealer must list the total price of a vehicle, excluding the taxes which can vary from town to town.
It's about time! This would never have taken place under a GOP administration, I'm sure.
In reply to The CARS rule is similar to… by Roger Digel-Barrett
People have a hard time taking accountability, educating themselves and having a backbone. More regulation equals higher fees to the consumer because of all the hoops the dealer has to jump through to be compliant because a few bad actors. Find a reputable dealer, they are abundant! Do your homework, if you don't like the deal walk away. Dig on GOP? Give one example of modern DEMS making a city, state or the country better.
In reply to People have a hard time… by Andy
Don't bring politics into this dude. Chill out. It's going to save money not have higher fee's. Read what it says .
In reply to People have a hard time… by Andy
The new CARS Rule will only level the playing field for the reputable car dealers, and make no mistake, there are many reputable dealers. There is ABSOLUTELY no reason whatsoever, other than trying to pull off a fast one, for the hidden unscrupulous seller to not quote the full and actual price. I can understand the exclusion of tax and registration because if the sale happens to be to an out-of-state buyer, these particular costs must be determined on a case by case basis.
Read some of the thousands of reviews of people who set out to buy a vehicle from unscrupulous dealers who are not obviously so. As things stand currently, there is so much time, money and energy wasted in trying to get down to the real price. This waste is totally unnecessary unless you're the seller hoping to gain from the chaos.
It's about time!!!
Thanks for trying to help me and the people who
Just Grate. Information over 6 Months in advance of taking
Effect.
Pretty ridiculous. We don't need any more regulation. I've also never had a problem with dealers when I tell them I'm not buying any add ons. That's literally all the buyer has to say. No one has ever forced these things with a car sale. If they did, then you leave and go somewhere else.
In reply to Pretty ridiculous. We don't… by Mark
Most people are ignorant when it comes to buying a car and are intimidated at a dealership. the the freaking dealers know this and take advantage of ignorant people. This will help the Ignorant.
In reply to Pretty ridiculous. We don't… by Mark
Have you bought a car lately? I had to buy when the lots were bare and any new stock was spoken for within hours. When I got the call, I was told that these addons were “already installed at the factory” and couldn’t be removed. My choices were to waste almost two thousand on this nonsense, continue waiting, or buy something different that I didn’t really want.
We need regulations to prevent shady behavior like this. There is no free market in action here. You take it or leave it when demand is high and stock is low.
In reply to Pretty ridiculous. We don't… by Mark
On the contrary, when you tell them you don't want the add-ons, many dealerships will never list the optional add-ons or price in writing. They will try to deceive that certain add-ons are required when they are not. Then many will include the add-on that you said not to add in the contract anyway, trying to slip it past any non-hyper vigilant buyer. Figuring out some of the sales contracts and the figures therein also makes it more difficult for a consumer to know exactly what was charged and what was not. I daresay the average person cannot decipher the numbers on the sales contract, so, no matter what was said verbally, often it is not followed through with on the actual contract.
These totally deceptive and often illegal practices at dealerships have gotten completely out of hand. I applaud this new law.
Like this information but please provide which fees are optional with sample or example would help.
Great!
Can you look at doing something about "shop fees" . With labor rates in the $140 per hour range, shop fees are a real rip off.
The newest one I saw was on Shop fees. Posted at a repair shop in Chantilly Va. - This facility uses the flat rate schedule or clock time or a combination of both to come up with a job cost. How is that for not knowing what a repair could cost.
This legislation should also include forbidding additional charges for paying cash because they lose their incentive kickback from the financing company for initiating a new loan with the finance company.