There has been a lot of confusion around the FTC CARS Rule and what it means for your dealership. We have been following this closely for years, and we want to cut through the noise: as your dealer add-on compliance partner, your front-end gross is protected, and we are here to make sure it stays that way. Here is everything you need to know.
The CARS Rule Has Been Vacated
On January 27, 2025, the U.S. Court of Appeals for the Fifth Circuit vacated the FTC CARS Rule. The court found that the FTC failed to follow proper procedural notice requirements before adopting it. The FTC chose not to appeal, and the rule is not currently in effect.
That means there is no new federal regulation changing how you sell vehicles or present add-on products. The compliance standards that apply to your store today are the same ones that have been in place, and the same ones your program is already built around.
What the CARS Rule Would Have Required
Even though the rule is not in effect, understanding what it proposed helps clarify why your program is already in the clear. Here is what the FTC outlined, directly from their own language:
- No Misrepresentations: The rule prohibits misrepresentations about key information like price and cost. In plain terms: do not say one thing and charge another.
- Offering Price, Total Payment, and Add-Ons Optional: Dealers must provide the offering price -- the actual price any consumer can pay for the vehicle. Optional add-ons like extended warranties must be identified as optional. When discussing monthly payments, the total payment must be disclosed.
- No Bogus Add-Ons: Dealers cannot charge for add-on products that provide no benefit to the consumer. The FTC gave specific examples: warranty programs that duplicate manufacturer coverage, service contracts for oil changes on an electric vehicle, GAP agreements that do not actually cover the vehicle or its use case, and software or audio subscriptions on a vehicle that cannot support them.
- Get Consumers’ Consent: Dealers must get the customer's express, informed consent for any charges they pay as part of the purchase.
Source: https://www.ftc.gov/
Why Your Add-On Products Are Fully Compliant
Look at that list again. The FTC is targeting products that provide zero tangible benefit -- products the customer pays for but never actually receives value from. That is not what we do.
Window tint and paint protection film are tangible products with clear, easily understandable benefits. Your customers can see them, feel them, and benefit from them every day they own the vehicle. UV protection, heat rejection, interior preservation, paint chip prevention -- these are real, measurable outcomes. There is no gray area here.
Your add-on program checks every box the FTC laid out:
- The products provide real, demonstrable benefits to the customer
- The pricing is disclosed and presented transparently on the addendum
- The products are identified as dealer-added options
- The customer can clearly understand what they are paying for
Your Store-Level Presentation Is Compliant
The way you are presenting the addendum on the vehicle at the store level is in compliance. Your addendum itemizes the products, shows the pricing, and makes it clear these are dealer-added options. That is exactly what regulators want to see.
The one area to double-check is your digital presence. Make sure your website is in sync with what is happening on the lot.
Digital Disclosure -- What State Attorneys General Are Looking For
Some state attorneys general have been sending notices to dealerships about online pricing transparency. What they are asking for is straightforward. They want your website to reflect that dealer-added options exist. Here are your options:
The digital addendum is a generic disclosure for new vehicles that itemizes your addendum products and pricing -- the same information that is already on the physical vehicle. Syncing your website to your showroom is the simplest way to stay ahead of any state-level requirements.
We Are Your Compliance-Focused Partner
We built our program around compliance from day one. Our products are tangible, our disclosures are transparent, and our addendum presentation is built to meet the standards regulators are looking for at both the federal and state level.
If you have questions about your digital disclosure, your addendum presentation, or anything related to add-on compliance, we are happy to schedule a consultation at your convenience. This is what we do, and we have your back.