FTC Publishes Final CARS Rule Targeting Unfair And Deceptive Auto Sales Practices

On December 12, the Federal Trade Commission (FTC) issued a final rule¹ imposing a broad set of new regulatory requirements and restrictions on the sale and financing of automobiles to consumers. In brief, the final rule — or the Combating Auto Retail Scams Trade Regulation Rule (the CARS Rule) — establishes new disclosure obligations for covered automobile dealers (or auto dealers) and specifically prohibits taking certain actions and making certain representations in the course of selling, leasing, or arranging financing for automobiles or offering and selling related products and services.

The CARS Rule will take effect on July 30, 2024. This article summarizes the new requirements and prohibitions imposed by the CARS Rule and provides key takeaways for industry participants as they prepare to comply with these new federal regulatory requirements.