NIADA urges automobile dealers to take part in the Federal Trade Commission’s virtual open meeting on Thursday, Jan. 18, on the Combatting Auto Retail Scams Rule (CARS rule).
The meeting will start at 11 a.m. ET. A link to the meeting will be available Thursday at FTC.gov. The meeting will be recorded and the webcast will be available after the meeting.
During the meeting, FTC staff will provide an overview of the CARS rule. The agency finalized the automobile purchasing rule Dec. 13, which it claims will combat “junk fees” and “bait-and-switch” issues.
The CARS rule, which will take effect July 30, 2024, will require automobile dealers to provide consumers with an offering price, disclose all optional add-ons and give information about total payment when discussing the monthly payment. Dealers must also get consumers’ “expressed, informed” consent for any charges as part of the vehicle purchase. The FTC rule scrutinizes add-ons, which are part of the vehicle purchase.
NIADA expressed concern about the impact on dealers from the rule. NIADA members discussed the proposed vehicle shopping rule with lawmakers during the National Policy Conference in September.
“It’s frustrating to see the FTC rush this rule out given the extensive questions, concerns and comments the FTC received about the proposal,” said NIADA CEO Jeff Martin. “When we met with the FTC at our Policy Conference in September, it was clear there were more questions than answers from the agency. Our members are not opposed to well-thought-out, reasonable and responsible regulation. However taking a small sample size and punishing the entire industry for the actions of a few rogue actors does more harm than good for consumers and dealers. We will review the over 370-page rule, help our dealers navigate the new compliance regulations, and explore other options to address some of the overregulation in this rule.”
The proposed rule was presented in June 2022. The agency received thousands of comments.
According to the FTC’s press release, the final version of the rule:
• prohibits motor vehicle dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles
• requires accurate pricing disclosures in dealers’ advertising and sales communications
• requires dealers to obtain consumers’ express, informed consent for charges
• prohibits the sale of any add-on product or service that confers no benefit to the consumer
• requires dealers to keep records of certain advertisements and customer transactions
Legal challenges to the rule have been filed and are working through the courts.
