Definition
The Combating Auto Retail Scams Rule (CARS Rule) was a Federal Trade Commission rule, finalized in December 2023, that targeted bait-and-switch pricing, junk fees and add-ons at car dealerships. A federal appeals court vacated it in January 2025 before it took effect, and the FTC formally withdrew it in February 2026.
Pasch Group Dealer Glossary · checked against primary sources October 2026
What it means for a dealership
The rule would have required dealers to disclose an offering price for a vehicle and to get a customer’s express, informed consent before charging for add-ons or anything else. Its goal was to stop bait-and-switch pricing and junk fees.
It never took effect. On January 27, 2025, the Fifth Circuit vacated the rule because the FTC skipped a required step, an advance notice of proposed rulemaking. The FTC then formally withdrew the rule in a notice published in the Federal Register on February 12, 2026.
The pricing problems the rule targeted can still lead to enforcement. The FTC acts against deceptive pricing under Section 5 of the FTC Act, and on March 13, 2026 it sent warning letters to 97 dealership groups saying advertised prices must include all mandatory fees. In September 2026 it published price transparency FAQs for auto dealers. Some states have their own rules, so check with your counsel.
Questions
Is the CARS Rule in effect?
No. A federal appeals court vacated it in January 2025, and the FTC withdrew it in February 2026. The FTC still brings cases over deceptive pricing under Section 5 of the FTC Act, and some states have their own rules.
Sources
- Federal Register, February 12, 2026: Withdrawal of the CARS Rule, doc. 2026-02866 (GovInfo)
- Revision of the Negative Option Rule, Withdrawal of the CARS Rule (FTC)
- FTC Warns 97 Auto Dealership Groups About Deceptive Pricing (FTC, March 13, 2026)
- FTC Publishes Price Transparency FAQs for Auto Dealers (FTC, September 15, 2026)
This explains the rule in plain English. It isn’t legal advice: check how it applies to your dealership with your counsel.
Updated October 11, 2026