NIADA monitors developments on CARS Rule

Washington, D.C., USA – July 19, 2019: This is the exterior view of the street sign in front of the US Federal Trade Commission headquarters. The FTC is the governmental agency tasked with regulating commerce and business practices for the federal government

In December, the Federal Trade Commission announced the new trade regulation rule for motor vehicle dealers, the Combating Auto Retail Scams Trade Regulation Rule or CARS Rule.

These new rules were set to go into effect on July 30, 2024.

Since then, a lot has happened. On Jan. 4, the National Automobile Dealers Association (NADA) and Texas Automobile Dealers Association (TADA) filed a lawsuit in federal court to stop the implementation of the new rule. On Jan. 8, NADA and TADA also filed a Motion for Stay of Final Rule and for Expedited Consideration.

NIADA has been, and continues to be, in contact with NADA and TADA offering support and exploring options to best protect and represent our members. An option being explored is NIADA filing an amicus brief in the litigation.

On Jan. 18, the FTC issued an order postponing the effective date of the CARS Rule pending judicial review.

When the U.S. Court of Appeals for the Fifth Circuit will issue its final ruling in the litigation is anyone’s guess, but the FTC stated in its Order the stay of the effective date of the rule should not postpone its implementation by more than a few months, if at all.

NIADA will continue to provide valuable information to help dealers comply with the rule. This includes a NIADA CARS Rule webinar on Feb. 23. Registration will open Feb. 15 at niada.com.

NIADA will also continue to support legislation like S.3014 (Moran [KS]) the FTC REDO Act, as well as a provision in the House appropriations bill that our members lobbied for during the NIADA Policy Conference last September. If the provision remains, it would eliminate funding for implementation or enforcement of the CARS Rule.

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