FTC Delays CARs Rule Effective Date to September 2025: What Dealerships Need to Know
The Federal Trade Commission (FTC) has announced a delay in the effective date for the “Combating Auto Retail Scams” Rule, commonly known as the "CARs Rule," until September 2025. This rule, originally set to take effect sooner, includes significant compliance requirements for advertising, disclosure, and recordkeeping that will directly impact dealership operations. The extension provides dealerships additional time to understand and implement the necessary measures to meet the rule’s stringent requirements.
What the CARs Rule Covers
The CARs Rule regulations in car sales and financing practices, with provisions covering:
Advertising Standards: Clear guidelines to ensure that dealership advertisements accurately reflect prices and avoid misleading promotions.
Disclosure Requirements: Dealers must provide buyers with full disclosure on all costs and financing terms.
Recordkeeping and Compliance: Dealerships will be required to maintain comprehensive records on transactions and disclosures to ensure compliance with FTC regulations.
The rule is designed to protect consumers and promote fair practices across the industry. However, it imposes burdensome requirements on car dealerships. Implementing the necessary changes will require dealerships to review and potentially overhaul their existing sales, financing, and advertising processes. We strongly recommend having your legal counsel be part of your dealership’s compliance efforts.
Steps Dealerships Should Take Now
While the deadline extension provides dealerships with valuable time, preparation should begin now to ensure a smooth transition to full compliance by September 2025. Key steps include:
Assess Current Advertising and Sales Practices: Review current advertising to ensure it aligns with the CARs Rule’s requirements, and identify areas that may need adjustments.
Implement Clear Disclosure Processes: Start setting up processes for thorough disclosures on pricing, financing, and additional fees.
Establish Robust Recordkeeping Systems: Ensure your dealership has a system in place to keep records of all required disclosures and transactions.
How We Can Help
Our firm provides comprehensive CARs Rule compliance services tailored to the specific needs of dealerships. With our guidance, your dealership can proactively address each component of the rule, minimizing the risk of penalties and enhancing transparency with customers. We’ll help ensure that your advertising, sales, and recordkeeping practices are fully compliant well before the rule takes effect.
Reach Out for Assistance
If you’re looking to navigate these regulatory requirements confidently, our team is ready to support you every step of the way. Contact us today to start developing a CARs Rule compliance strategy tailored to your dealership’s needs.
