Driving Transparency? How the FTC's CARS Regulation Will Transform Auto Retail

On December 12, 2023, the Federal Trade Commission (FTC) announced that it had finalized a groundbreaking new regulation called the Combating Auto Retail Scams (CARS) Rule to combat illegal tactics that consumers face when purchasing a car. Set to be enacted on July 30th, 2024, this rule is expected to save consumers nationwide more than $3.4 billion and an estimated 72 million hours each year spent shopping for vehicles.

The Goal: A Beacon of Consumer Protection

"When Americans set out to buy a car, they're routinely hit with unexpected and unnecessary fees that dealers extract just because they can. The CARS Rule will prohibit exploitative junk fees in the car-buying process, saving people time and money and protecting honest dealers." - Lina M. Khan, FTC Chair

The mission of the CARS Rule is to help consumers navigate the complex world of auto retail. There are several primary aspects of the new rule.

• Bait-and-Switch Tactics: The CARS Rule takes a firm stance against deceptive advertising and sales practices that have plagued part of the auto industry for years. It ensures that the price and features consumers see are what they will actually get, trying to put an end to the bait-and-switch game.
• Hidden Junk Fees: One of the most significant victories for consumers is the eradication of hidden and unjustifiable fees that often inflate the cost of purchasing a vehicle. Under the CARS Rule, dealers are mandated to be upfront about all fees, providing consumers with full transparency.
• Protecting Military Members: The CARS Rule extends its protective embrace to members of the military and their families. It recognizes that they are not only often targeted by bait-and-switch tactics and junk fees but also subjected to deceptive information about dealership affiliations with the military and other issues specific to service members.

NADA's Concerns: A Different Perspective

However, not everyone is on board with the CARS Rule. The National Automobile Dealers Association (NADA) has expressed concerns, as voiced by its president and CEO Mike Stanton, who stated, "This regulation is heavy-handed bureaucratic overreach and redundancy at its worst, that will needlessly lengthen the car sales process by forcing new layers of disclosures and complexity into the transaction."

AutoTrainer: A Key Player in Compliance

Amid these differing perspectives, AutoTrainer, the leading AI software for F&I Departments, is poised to play a pivotal role in helping dealerships navigate the changing landscape. AutoTrainer not only simplifies the process of obtaining consumer consent but goes a step further by recording the transaction, ensuring complete adherence to the CARS Rule. This innovative solution guarantees transparency and accountability throughout the sales process.

"Dealerships can confidently reach out to AutoTrainer for unmatched compliance solutions that ensure transparency, accountability, and customer trust in an evolving automotive landscape." - Carl Grane, Head of Business Development at AutoTrainer

A Bright Future for Auto Retail

As we approach the July 30th, 2024 enactment of the CARS Rule, the automotive retail industry is poised for a transformation characterized by focusing on consumer protection and experience.

AutoTrainer's commitment to compliance demonstrates its dedication to delivering solutions that benefit both dealerships and consumers, ushering in an era of honest, transparent, and consumer-friendly auto retail.

Contact us to discuss how the new rule may impact your dealership, and how AutoTrainer can help.