Navigating the FTC CARS Rule: A Dealer's Guide to Compliance and Fair Practices

The Federal Trade Commission’s (FTC) CARS Rule is designed to inject truth and transparency into the car buying and leasing experience, directly addressing deceptive and unfair practices that can harm both consumers and honest Cars Dealers. This rule, standing for Combating Auto Retail Scams, tackles issues like bait-and-switch tactics, hidden charges, and other misconduct that has cost consumers billions annually and unfairly disadvantaged ethical dealerships. For cars dealers committed to integrity and customer satisfaction, the CARS Rule isn’t just a set of regulations; it’s a reinforcement of best practices and a level playing field against unscrupulous competitors.

This guide serves as an essential introduction for cars dealers, outlining what the CARS Rule means for their operations. It emphasizes that the core principles of the rule – truthfulness and transparency – are already standard practice for reputable cars dealers. By understanding and adhering to these guidelines, dealerships can not only ensure compliance but also build stronger customer relationships based on trust and clear communication. The CARS Rule is ultimately a win-win, fostering a fairer marketplace for consumers and rewarding honest cars dealers for their ethical conduct.

[ Image

](https://www.ftc.gov/system/files/ftc_gov/pdf/FTCCARSRuleInfographic_web.pdf)

Understanding the Four Core Principles of the CARS Rule for Car Dealers

The CARS Rule is built upon four fundamental principles, all aimed at fostering a transparent and fair environment for car sales and leasing. For cars dealers, these principles serve as a clear framework for ethical operations and consumer protection.

1. Prohibition of Misrepresentations: Ensuring Honesty in Dealership Practices

A cornerstone of the CARS Rule is the explicit prohibition of misrepresentations concerning “material information.” In the context of car sales, “material” refers to any information that is likely to influence a consumer’s decision when buying or leasing a vehicle. This definition, long-standing within the FTC, underscores the importance of truthful and accurate communication from cars dealers at every stage of the transaction. The rule prohibits both explicitly false statements and misleading implications.

To provide clarity for cars dealers, the CARS Rule specifically lists categories of information where misrepresentations are illegal. These categories cover critical aspects of the car buying process:

Costs and Terms: Misrepresenting the price, financing conditions, or lease terms of a vehicle is strictly prohibited. This includes hidden fees, inflated interest rates, or misleading statements about monthly payments. Cars dealers must ensure that all cost-related information is accurate and transparent.
Add-on Products and Services: Deceptive claims about the benefits, limitations, or costs of add-on products or services are unlawful. For instance, exaggerating the value of a paint protection package or failing to disclose limitations on a service contract would be considered a misrepresentation. Cars dealers must accurately represent the features and value of any add-ons.
Financing vs. Lease: Dealers must clearly and truthfully represent whether a transaction is a purchase with financing or a lease. Mischaracterizing a lease as a purchase or vice versa is a violation. Cars dealers need to ensure consumers fully understand the nature of their agreement.
Rebates and Discounts: Advertising prices that include rebates or discounts not available to all consumers is prohibited. If a price is contingent on specific qualifications (e.g., military service, student status), this must be clearly disclosed. Cars dealers should advertise prices that are genuinely accessible to the average consumer.
Vehicle Availability: Misrepresenting the availability of vehicles at advertised prices is illegal. Bait-and-switch tactics, where dealers advertise a low price for a vehicle that is not actually available to lure customers in, are explicitly targeted by this rule. Cars dealers must honor advertised prices on vehicles that are in stock or readily obtainable.
Pre-approval and Guarantees: Dealers cannot falsely claim that a consumer has been pre-approved or guaranteed for financing or specific terms if this is not the case. Making unsubstantiated guarantees to attract customers is a deceptive practice. Cars dealers should only make realistic and verifiable statements about financing approvals.
Financing Applications: Misrepresenting any information related to a consumer’s financing application is prohibited. This includes altering application details or providing false information to lenders. Cars dealers must handle financing applications with integrity and accuracy.
Transaction Finality: Dealers must be truthful about when a transaction becomes final and binding for all parties. Creating false urgency or misleading consumers about their ability to back out of a deal is unlawful. Cars dealers should clearly communicate the terms of contract finalization.
Handling of Down Payments and Trade-ins: It is illegal for cars dealers to misrepresent policies regarding cash down payments or trade-in vehicles if a transaction is not finalized or if the consumer decides not to proceed. Dealers must be transparent about refund policies and the return of trade-ins.
Trade-in Payoffs: Deceptive statements about when or whether a dealer will pay off the financing or lease on a consumer’s trade-in vehicle are prohibited. Cars dealers must provide accurate timelines and commitments regarding trade-in payoffs.
Reviews and Ratings: Misrepresenting consumer reviews or ratings as unbiased or ordinary when they are not (e.g., fake reviews, incentivized reviews) is illegal. Cars dealers should only use genuine and representative customer feedback.
Government Affiliations: Falsely claiming affiliation, endorsement, or approval by the U.S. government or any government agency, including the military, is strictly prohibited. Cars dealers must not exploit government associations for marketing purposes without legitimate authorization.
Prizes and Sweepstakes: Deceptive claims about prizes or sweepstakes to entice customers are unlawful. If a dealership uses promotions, the terms and conditions must be clearly and truthfully disclosed. Cars dealers should ensure promotions are legitimate and transparent.
Vehicle Relocation: Misrepresenting the circumstances under which a vehicle can be moved, including across state lines or internationally, is prohibited. Cars dealers must be clear about any restrictions on vehicle relocation, especially for leased vehicles.
Repossession: Deceptive statements about when or under what circumstances a vehicle may be repossessed are illegal. Cars dealers should provide accurate information about repossession policies and procedures.
Rule Disclosures: Misrepresenting any of the disclosures required by the CARS Rule itself is also a violation. Cars dealers must be transparent and accurate in all disclosures mandated by the rule.

By adhering to these prohibitions, cars dealers can build a reputation for honesty and integrity, fostering trust with consumers and ensuring compliance with the CARS Rule.

2. Mandatory Offering Price Disclosure: Transparency in Vehicle Pricing for Car Dealers

Consumer complaints and FTC investigations have highlighted the prevalence of bait-and-switch tactics and hidden charges in car sales. To address these issues, the CARS Rule mandates clear and conspicuous disclosure of the “offering price.” This is defined as the actual price any consumer can expect to pay for a vehicle, excluding only legally required government charges like taxes and registration fees. This provision aims to provide cars dealers with a clear standard for price advertising and communication, promoting transparency and preventing deceptive pricing practices.

The CARS Rule specifies when and how cars dealers must disclose the offering price:

Vehicle-Specific Ads: In any advertisement that mentions a specific vehicle, the offering price must be clearly and conspicuously disclosed. This applies to all forms of advertising, including online listings, print ads, and broadcast commercials. Cars dealers must ensure that the advertised price is the true selling price, excluding only mandatory government charges.
Monetary or Financing Term Ads: Any advertisement that includes monetary amounts or financing terms for a vehicle must also clearly and conspicuously state the offering price. This ensures that consumers are not misled by attractive monthly payment figures without understanding the actual vehicle price. Cars dealers need to present the offering price alongside any financing details.
Consumer Communications: In any communication with a consumer that refers to a specific vehicle or monetary/financing terms, the cars dealer must disclose the offering price in their initial response. If the communication is in writing (e.g., email, text), the offering price must also be provided in writing. This ensures that from the very first interaction, consumers are provided with the fundamental price information.

Furthermore, the CARS Rule requires additional disclosures related to pricing and payment terms:

Non-Required Add-ons: When discussing add-on products or services, cars dealers must clearly disclose that these add-ons are not mandatory and that the consumer can purchase or lease the vehicle without them. This disclosure must be in writing if the representation about the add-on is in writing. This empowers consumers to make informed decisions about optional extras.
Total Payment Disclosure: If a cars dealer advertises a monthly payment amount, they must also clearly disclose the total amount the consumer will pay over the financing or lease term. This prevents consumers from being solely focused on the monthly payment without considering the overall cost. If the total payment calculation assumes a down payment or trade-in, the amount of this consideration must also be disclosed. Again, written representations require written disclosures.
Payment Comparisons: When comparing payment options and highlighting a lower monthly payment, cars dealers must clearly disclose if the lower monthly payment will result in a higher total payment. This ensures that consumers understand the trade-offs between lower monthly payments and increased long-term costs. Written comparisons necessitate written disclosures.

By adhering to these disclosure requirements, cars dealers can build consumer confidence and avoid accusations of deceptive pricing. Transparency in pricing is not only a legal obligation under the CARS Rule but also a cornerstone of ethical business practice.

3. Ban on Unbeneficial Add-ons: Providing Value to Car Buyers

Concerns about deceptive inclusion of add-on products and services, often without clear consumer benefit, were central to the development of the CARS Rule. An “add-on,” as defined by the rule, is any product or service not provided or installed by the vehicle manufacturer that the cars dealer charges the consumer for in connection with a vehicle sale, lease, or financing transaction. The CARS Rule specifically targets the harmful practice of charging consumers for add-ons that provide no actual benefit.

Under the CARS Rule, cars dealers are prohibited from charging for an add-on product or service if the consumer would not benefit from it. Examples of such unbeneficial add-ons include:

Nitrogen-Filled Tires with Minimal Nitrogen: Charging for “nitrogen-filled tires” when the tires are filled with air that already naturally contains a significant percentage of nitrogen is considered an unbeneficial add-on. Unless the tires are filled with nearly pure nitrogen, the benefit is negligible. Cars dealers should ensure that any “nitrogen tire” service provides a genuine and demonstrable benefit to the consumer.
Duplicative or Useless Coverage: Add-ons that do not provide actual coverage for the vehicle, the consumer, or the transaction, or that duplicate existing warranty coverage, are also considered unbeneficial. For example, selling a service contract that largely overlaps with the manufacturer’s warranty or offering GAP coverage to a consumer who would not benefit from it due to loan-to-value ratios or vehicle/location exclusions would be prohibited.

Specifically, the CARS Rule mentions GAP Agreements (Guaranteed Asset Protection) as an add-on that can be unbeneficial in certain circumstances. A GAP Agreement is designed to cover the difference between the vehicle’s value and the loan balance if the car is totaled or stolen. However, if a consumer’s vehicle or location is excluded from GAP coverage, or if their loan-to-value ratio is such that they would not financially benefit from GAP coverage, then charging them for this add-on would be illegal. Cars dealers must assess whether a GAP Agreement and other add-ons truly offer a potential benefit to the specific consumer before charging for them.

This provision of the CARS Rule encourages cars dealers to focus on providing value to their customers. Add-ons should be genuinely beneficial and relevant to the consumer’s needs, not simply a source of inflated profits. By offering only valuable add-ons, dealerships can enhance customer satisfaction and build long-term loyalty.

4. Express, Informed Consent: Empowering Consumer Choice at Car Dealerships

The CARS Rule’s fourth core principle mandates that cars dealers must obtain express, informed consent from consumers before charging them for anything. This is a fundamental consumer protection measure designed to prevent unauthorized charges and ensure that consumers are fully aware of and agree to all costs associated with their vehicle transaction.

“Express, informed consent” under the CARS Rule requires several key elements:

Affirmative Act: Consent must be communicated through an affirmative act from the consumer, clearly indicating their unambiguous agreement to be charged. Silence, inaction, or assumptions do not constitute consent. Cars dealers need explicit confirmation from the consumer.
Clear and Conspicuous Disclosure: Before obtaining consent, cars dealers must provide clear and conspicuous disclosures of:
1. What the charge is for: The consumer must be clearly informed about the specific product or service they are being charged for. Vague descriptions are insufficient.
2. Amount of the charge: The total cost of the charge must be disclosed, including all fees and costs over the repayment period, both with and without the product or service, if applicable. This ensures complete price transparency.
Proximity: The consumer’s consent must be given in close proximity to when and where the dealer provides these clear disclosures. The consent should directly follow the explanation of the charge and its amount.
Written and Oral Communication: For in-person transactions, the required information must be conveyed both in writing and orally. For online or remote transactions, written disclosure suffices. Cars dealers must ensure both written and verbal clarity for in-person sales.

The CARS Rule explicitly states what does not constitute express, informed consent. These include:

Signed or Initialed Documents Alone: Simply having a consumer sign or initial a document, by itself, is not sufficient to demonstrate informed consent. The consumer must understand what they are signing and actively agree to the charge. Cars dealers cannot rely on signatures alone as proof of consent.
Pre-checked Boxes: Pre-checked boxes on forms do not constitute informed consent. Consumers must actively check a box or take a similar affirmative action to indicate their agreement. Cars dealers should avoid using pre-checked boxes for add-on selections or charges.
Subversive Practices: Agreements obtained through any practice designed to impair consumers’ autonomy, decision-making, or choice are not considered valid consent. This broadly prohibits manipulative or coercive sales tactics that pressure consumers into agreeing to charges without genuine understanding or volition. Cars dealers must ensure a fair and pressure-free sales environment.

By adhering to the express, informed consent requirement, cars dealers can build trust with their customers and ensure that all charges are fully authorized and understood. This principle reinforces ethical sales practices and empowers consumers to make informed purchasing decisions.

CARS Rule FAQs for Car Dealers: Addressing Common Questions

What is the FTC’s legal authority for enacting the CARS Rule?

The Dodd-Frank Act grants the FTC the authority to create rules addressing unfair or deceptive practices by cars dealers. In 2022, the FTC initiated a Notice of Proposed Rulemaking to tackle these issues in the motor vehicle sales and leasing sector. The FTC received extensive public input from cars dealers, industry associations, consumer advocacy groups, government agencies, and other stakeholders, all of which informed the final CARS Rule. The Statement of Basis and Purpose accompanying the rule provides a detailed discussion of the public comments received and considered.

Who’s covered by the CARS Rule?

The CARS Rule applies to “Covered Motor Vehicle Dealers,” defined as any person or business within the United States or its territories that meets the following criteria:

Licensed by a state, the District of Columbia, or a U.S. territory to sell Covered Motor Vehicles.
Takes title to, holds an ownership interest in, or takes physical custody of Covered Motor Vehicles.
Is primarily engaged in the sale and servicing of Covered Motor Vehicles, their leasing and servicing, or both.

This definition broadly encompasses franchised and independent cars dealers involved in the sale and leasing of automobiles to consumers.

What kind of vehicles are covered by the CARS Rule?

The Rule applies to any “Covered Motor Vehicle,” defined as any self-propelled vehicle designed to transport people or property on public roads. This includes cars, trucks, and SUVs. However, the definition specifically excludes:

Recreational boats and marine equipment
Motorcycles, scooters, and electric bicycles
Motor homes, recreational vehicle trailers, and slide-in campers
Golf carts

Therefore, the CARS Rule primarily focuses on the sale and leasing practices of cars dealers offering standard passenger vehicles and light trucks.

What kinds of communications does the CARS Rule apply to?

The CARS Rule’s provisions are comprehensive, applying to all forms of communication cars dealers use to reach prospective buyers and lessees. This includes, but is not limited to:

Television and radio advertisements
Print advertisements (newspapers, magazines, etc.)
Direct mail marketing
Dealership websites
Social media platforms
Online streaming advertisements
Oral statements made to consumers in person or over the phone

Essentially, any channel a cars dealer uses to advertise or communicate with consumers about vehicle sales, leasing, pricing, or financing is subject to the CARS Rule’s requirements.

What does the CARS Rule mean by “clearly and conspicuously”?

The CARS Rule adopts the FTC’s established definition of “clearly and conspicuously,” which emphasizes that disclosures must be easily understood and difficult to miss for ordinary consumers. Rather than prescribing specific fonts or sizes, the rule focuses on achieving effective communication. It provides cars dealers flexibility in how they make disclosures, while establishing some essential standards:

Single Modality Ads: For ads that are only visual or only audible (e.g., a print ad or a radio spot), the disclosure must be presented through the same modality. Visual ads require visual disclosures, and audible ads require audible disclosures.
Dual Modality Ads: In ads that are both visual and audible, like TV commercials, disclosures must be presented simultaneously in both the visual and audible components, even if the claim triggering the disclosure is only in one modality.
Visual Disclosure Standards: Visual disclosures must stand out from surrounding text and visual elements. Fine print, dense text blocks, or disclosures hidden where consumers are unlikely to look do not meet the standard. Factors considered include size, contrast, location, and duration of display. Cars dealers should use design elements that make disclosures prominent and easily readable.
Audible Disclosure Standards: Audible disclosures, such as in radio ads or phone conversations, must be delivered at a volume, speed, and cadence that allows ordinary consumers to easily hear and understand them. Fast-talking or mumbled disclosures are not compliant. Cars dealers should ensure audio disclosures are clear and articulate.
Interactive Electronic Media: For ads on the internet or software, disclosures must be unavoidable. Pop-up disclosures or those requiring a deliberate action to view are more likely to be considered “clear and conspicuous” in this context.
Wording of Disclosures: Disclosures must use plain language and grammar understandable to ordinary consumers. Legalese, jargon, or overly complex phrasing is not acceptable. Disclosures must also appear in every language used in the representation that triggers the disclosure. Cars dealers should use simple, direct language in all disclosures and provide them in all languages used in their advertising and sales materials.

How do I know if I’m making disclosures clearly and conspicuously?

The CARS Rule definition and this guide offer a starting point. A helpful guideline for cars dealers is to apply the same principles they would use when they genuinely want consumers to notice and understand key marketing messages. Use prominent fonts, clear language, contrasting backgrounds, and place disclosures where they are sure to be seen and heard. Ask yourself: “If I really wanted to ensure customers understand this, how would I present it?” This customer-centric approach to disclosures is more likely to build trust and avoid regulatory issues.

Does the CARS Rule apply to advertising and transactions in languages other than English?

Yes. The CARS Rule’s truth and transparency standards apply regardless of the language used in advertising, sales interactions, or transaction negotiations. Disclosures must be “easily understandable” to meet the “clear and conspicuous” standard. If a disclosure is in a language the consumer doesn’t understand, it is not compliant. Similarly, for “express, informed consent,” consumers must “unambiguously assent,” which is impossible if they don’t understand the terms. Crucially, disclosures must appear in every language in which the representation that necessitates the disclosure is made. If a cars dealer advertises an add-on in Spanish, the disclosure that the add-on is optional must also be in Spanish. Cars dealers should be aware of the FTC’s long-standing policy on foreign language advertising disclosures, and ensure their practices are consistent with it to avoid potential enforcement actions.

What if a car buyer agrees to waive their protections under the CARS Rule?

The CARS Rule explicitly prohibits waivers of consumer protections. It is a violation of the rule to obtain, or even attempt to obtain, a waiver from a consumer for any right or protection granted by the CARS Rule. Consumer rights under this rule are non-waivable. Cars dealers must ensure they do not include any waiver clauses in their contracts or attempt to circumvent the rule’s protections through waivers.

Does the CARS Rule include provisions about retaining records?

Yes. The CARS Rule includes recordkeeping requirements, many of which align with standard business practices for cars dealers. These requirements not only ensure compliance but also provide documentation to protect dealerships in case of future inquiries or disputes. Cars dealers must create and retain the following records for at least 24 months from the date of creation:

Advertising Materials: Copies of all materially different advertisements, sales scripts, training materials, and marketing materials related to vehicle price, financing, or leasing disseminated during the relevant period. For credit or lease ads with variations in vehicles or amounts but consistent terms, retaining one example is sufficient if other aspects are not materially different.
Transaction Documents: Copies of all purchase orders, financing agreements, and leasing contracts signed by consumers, regardless of final financing approval. This also includes written communications about sales, financing, or leasing with consumers who sign these documents.
Add-on Documentation: Records demonstrating compliance with the CARS Rule for add-ons included in consumer contracts. This includes copies of service contracts, GAP Agreements, and loan-to-value ratio calculations for contracts including GAP Agreements.
Consumer Complaints: Records of all written consumer complaints regarding sales, financing, or leasing, inquiries about add-ons, and inquiries/responses related to CARS Rule disclosures.

Records can be maintained in any legible format and in the same manner and location as existing business records. Failure to maintain required records is a violation of the CARS Rule.

What’s the penalty for violating the CARS Rule?

Violations of any FTC Trade Regulation Rule, including the CARS Rule, can result in significant consequences. Penalties may include:

Orders to Change Business Practices: Requiring companies to modify their operational procedures to comply with the rule.
Consumer Redress: Mandating financial restitution to harmed consumers.
Civil Penalties: Fines of up to $50,120 per violation.

These penalties underscore the importance of CARS Rule compliance for cars dealers.

How does the FTC’s CARS Rule interact with state laws?

The CARS Rule does not preempt or supersede state laws or regulations unless a state standard is directly inconsistent with the FTC rule. In cases of inconsistency, the CARS Rule will take precedence. However, if a state law offers consumers greater protection than the CARS Rule, the FTC does not consider that inconsistent, and consumers in that state will benefit from the stronger state protections. Cars dealers must comply with both federal and state laws, prioritizing the law that provides greater consumer protection.

When does the CARS Rule take effect?

The effective date of the CARS Rule is currently paused pending judicial review. Cars dealers should stay informed about updates regarding the rule’s implementation and effective date.

Where can dealers go to get more information about complying with federal consumer protection laws?

The FTC’s Automobiles page is a valuable resource for cars dealers, offering additional guidance on complying with consumer protection laws. Staying informed about FTC enforcement actions relevant to the auto industry is also crucial. The FTC Business Blog provides summaries of FTC cases and initiatives, including those impacting cars dealers. Subscribing to FTC Business Alerts can provide timely updates directly to your inbox.

Glossary

Here are definitions of key terms as used in the CARS Rule:

Add-on or Add-on Product(s) or Service(s): Any product(s) or service(s) not provided to the consumer or installed on the Vehicle by the Vehicle manufacturer and for which the Dealer, directly or indirectly, charges a consumer in connection with a Vehicle sale, lease, or financing transaction.

Clear(ly) and Conspicuously: In a manner that is difficult to miss (i.e., easily noticeable) and easily understandable, including in all of the following ways:

In any communication that is solely visual or solely audible, the disclosure must be made through the same means through which the communication is presented. In any communication made through both visual and audible means, such as a television advertisement, the disclosure must be presented simultaneously in both the visual and audible portions of the communication even if the representation requiring the disclosure is made in only one means.
A visual disclosure, by its size, contrast, location, the length of time it appears, and other characteristics, must stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood.
An audible disclosure, including by telephone or streaming video, must be delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand it.
In any communication using an interactive electronic medium, such as the Internet or software, the disclosure must be unavoidable.
The disclosure must use diction and syntax understandable to ordinary consumers and must appear in each language in which the representation that requires the disclosure appears.
The disclosure must comply with these requirements in each medium through which it is received.
The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication.

Covered Motor Vehicle or Vehicle: Any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road. For purposes of this part, the term Covered Motor Vehicle does not include the following: (1) Recreational boats and marine equipment; (2) Motorcycles, scooters, and electric bicycles; (3) Motor homes, recreational vehicle trailers, and slide-in campers; or (4) Golf carts.

Covered Motor Vehicle Dealer or Dealer: Any person, including any individual or entity, or resident in the United States, or any territory of the United States, that: (1) Is licensed by a State, a territory of the United States, or the District of Columbia to engage in the sale of Covered Motor Vehicles; (2) Takes title to, holds an ownership interest in, or takes physical custody of Covered Motor Vehicles; and (3) Is predominantly engaged in the sale and servicing of Covered Motor Vehicles, the leasing and servicing of Covered Motor Vehicles, or both.

Express, Informed Consent: An affirmative act communicating unambiguous assent to be charged, made after receiving and in close proximity to a Clear and Conspicuous disclosure, in writing, and also orally for in-person transactions, of the following: (1) What the charge is for; and (2) The amount of the charge, including, if the charge is for a product or service, all fees and costs to be charged to the consumer over the period of repayment with and without the product or service. The following are examples of what does not constitute Express, Informed Consent: (i) A signed or initialed document, by itself; (ii) Prechecked boxes; or (iii) An agreement obtained through any practice designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision-making, or choice.

GAP Agreement: An agreement to indemnify a Vehicle purchaser or lessee for any of the difference between the actual cash value of the Vehicle in the event of an unrecovered theft or total loss and the amount owed on the Vehicle pursuant to the terms of a loan, lease agreement, or installment sales contract used to purchase or lease the Vehicle, or to waive the unpaid difference between money received from the purchaser’s or lessee’s Vehicle insurer and some or all of the amount owed on the Vehicle at the time of the unrecovered theft or total loss, including products or services otherwise titled “Guaranteed Automobile Protection Agreement,” “Guaranteed Asset Protection Agreement,” “GAP insurance,” or “GAP Waiver.”

Government Charges: All fees or charges imposed by a Federal, State, or local government agency, unit, or department, including taxes, license and registration costs, inspection or certification costs, and any other such fees or charges.

Material or Materially: Likely to affect a person’s choice of, or conduct regarding, goods or services.

Offering Price: The full cash price for which a Dealer will sell or finance the Vehicle to any consumer, provided that the Dealer may exclude only required Government Charges.

[Note: Updated on January 24, 2024, to remove the Rule’s effective date, pending judicial review.]

Navigating the FTC CARS Rule: A Dealer’s Guide to Compliance and Fair Practices