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Walking into a car dealer is a lot like walking into a casino. Everything’s shining, everyone’s smiling… and the house always wins. We’ve all heard the stories haven’t we? When those payments start to settle in & people finally realize how upside-down they’ve gotten themselves. Like when it’s been almost 2-years worth of payments, the vehicle’s lost 30% value, and they’ve barely paid-off the tax, dealer fees, + $2,500 ‘paint protection’. Well, in a turn of the normal tides these days, let me show you some positive legislation that is waiting to be passed. Enter the FTC’s CARS Rule: A piece of legislation that finally shines a light on some of these dealership’s predatory practices.

The CARS Rule is a breath of fresh air… 

Almost as if some bureaucrat finally realized that $500 processing fees were idiotic. The Combating Auto Retail Scams (CARS) Rule takes direct aim at the absurdity of dealer add-ons, financing tricks, and those hidden fees that somehow creep into the final contract. You know the ones – like when you’re about to sign, and suddenly there’s a fee for “dealer prep”… which means they washed it & gave you a keychain.

car dealership fees

Breaking Down the Bull: What’s in the CARS Rule?

The CARS Rule demands transparent pricing. Meaning the price they tell you upfront, is the price you walk out with. No more smoke-&-mirrors. Dealers will be required to disclose all fees & costs before you even think about signing. The aim is to create clear upfront pricing, where you get exactly what you budgeted for.

Bait-&-switch advertising… 

It’s something that’s been going on since, the dawn of time and it goes like this: “Come on down! We’ve got cars for $15,000!” Except when you get there, those $15,000 cars are “just sold”. And suddenly, you’re steered towards optioned-out models at 30% more that are somehow “a great deal”. The CARS Rule would not allow those kinds of deceptive business practices. If a dealership advertises a price, they better be ready to honor it, or else they’re in deep with the FTC .

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shady dealership practices

Forced add-on costs…

You know the ones? The additions to a vehicle that you never asked for? Sure, we can talk about tint, but don’t blindside me with an additional $2,000 “environmental protection coating”. Which is (spoiler alert) just tint & a glorified wax job. The CARS Rule forces dealers to get your consent for all those ‘little extras’ instead of just slipping them onto the window sticker – as if they’re part of the vehicle price.

How the CARS Rule effect dealerships

Honest Dealers, Don’t fret 

You’re still in the game. Not all car dealers are crooks. There are plenty of honest, hardworking dealers out there. Unfortunately they often get lumped into the sleazy stereotypes of their more devious counterparts. These honest folks are probably doing a little jig in their back offices over the CARS Rule. The CARS Rule doesn’t punish good dealers – it just targets the ones who’ve been skating by on smoke-&-mirrors. Rule of thumb: The honest dealerships are generally NOT the ones clustered around other competing dealers… like along busy mall boulevards for example. 

Deceptive dealership practices have been brewing… 

But recently, they seem to have spread to toxic levels. Following the vehicle shortages post-Covid, there was more demand than supply… and dealerships took advantage of customers who needed/wanted new vehicles in an inventory-stressed environment. It was only further aggravated by inflation & high interest rates. Enough is enough though. This is not industry standard, and it’s time it gets checked before there is greater/permanent damage to the automotive industry & the dealership model. 

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CARS Rule dealership

But there’s a problem… 

Just when it felt like we might finally get a win for the little guy, the CARS Rule has been paused. Paused! Reason being – some dealer networks weren’t too thrilled about being called-out for their tricks & tactics. So, they’ve thrown a legal wrench into the works. Yep – the rule is tangled up in judicial review. So until further notice, customers are just gonna have to be savvy enough to not to get charged an extra $500 for nitrogen-filled tires. And to not buy what they don’t understand.

Bottom Line for the CARS Rule…

If you’re like me, you’re tired of a car-buying process that backs you into a corner. And makes you jump through all kinds of irritating & skeptical hoops. The FTC’s CARS Rule could finally bring some peace & clarity to the car-buying experience. To be clear – there’s nothing wrong with a little deal-making and/or added options in my opinion. But there is something wrong with deception… and/or forcing the customer into additional hidden charges. If the CARS Rule survives the courts, we’ll have the transparency and fairness that many consumers have needed for years. That is until – they inevitably find new ways to screw us lol.

CARS Rule dealership effects

 

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