Car Buying in 2025: How to Use the FTC CARS Rule to Get a Fair Deal

February 3, 2025 • Beat the 4 Square Team
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FTC CARS Rule car buying 2025 consumer rights dealership tactics fair dealing

Car Buying in 2025: How to Use the FTC CARS Rule to Get a Fair Deal

Car buying changed forever on July 30, 2024, when the Federal Trade Commission's CARS (Combating Auto Retail Scams) Rule took effect. For the first time, federal law specifically targets the deceptive practices that have cost consumers billions. Here's your complete guide to using these new protections to get a fair deal.

Understanding the FTC CARS Rule

The Two Key Sections That Protect You

Section 463.4: Prohibited Misrepresentations

  • Dealers cannot lie about add-on requirements
  • Cannot misrepresent financing terms
  • Cannot make false claims about products or services
  • Cannot hide material information about deals

Section 463.5: Required Disclosures

  • Must clearly identify optional vs. required items
  • Must provide prominent disclosures about add-ons
  • Must allow consumers to decline optional products
  • Must distinguish between legal requirements and dealer preferences

What This Means in Plain English

Before the CARS Rule: Dealers could claim almost anything was "required" or "mandatory" without consequence.

After the CARS Rule: Dealers face federal penalties for misrepresenting optional items as required or failing to clearly disclose consumer rights.

Your Complete Rights Checklist Under the CARS Rule

✓ Right to Clear Information

You have the right to:

  • Know what's legally required vs. dealer optional
  • Understand all financing terms before signing
  • Receive truthful information about products and services
  • Get clear, prominent disclosures about all add-ons

Dealer obligations:

  • Must clearly label optional items
  • Cannot hide terms in fine print
  • Must provide material information upfront
  • Cannot use deceptive or misleading language

✓ Right to Decline Optional Add-Ons

You have the right to:

  • Refuse any optional product or service
  • Decline extended warranties, protection plans, and insurance
  • Remove add-ons from your deal without penalty
  • Complete your purchase without optional items

Dealer obligations:

  • Cannot require optional add-ons for sale
  • Must process your purchase without declined items
  • Cannot charge "cancellation fees" for declining
  • Cannot make financing contingent on add-ons

✓ Right to Accurate Pricing

You have the right to:

  • See all charges itemized clearly
  • Understand what each fee covers
  • Know the total cost before committing
  • Challenge any misrepresented charges

Dealer obligations:

  • Must disclose all fees and charges
  • Cannot misrepresent required vs. optional fees
  • Must provide accurate total pricing
  • Cannot add surprise charges later

✓ Right to Fair Financing Terms

You have the right to:

  • Understand all loan terms before signing
  • Know your actual APR and payment calculation
  • See financing options without mandatory add-ons
  • Choose your own financing source

Dealer obligations:

  • Must disclose all financing terms clearly
  • Cannot misrepresent loan conditions
  • Must allow outside financing
  • Cannot tie financing to optional products

✓ Right to File Complaints

You have the right to:

  • Report CARS Rule violations to the FTC
  • Seek legal remedy for violations
  • File complaints with state authorities
  • Share your experience publicly

Enforcement mechanisms:

  • FTC complaint process
  • State attorney general actions
  • Private legal remedies
  • Dealer licensing board complaints

Scripts for Pushing Back Against Mandatory Add-Ons

When They Claim Something Is "Required"

Scenario: Dealer says extended warranty is required for financing.

Your Script:
"Under the FTC CARS Rule Section 463.4, you cannot misrepresent optional add-ons as required. Extended warranties are optional. Please remove this from my contract."

If they persist:
"I'm familiar with federal law on this. Show me the legal statute that requires this warranty, or remove it from my deal."

When They Use "Policy" Language

Scenario: "It's our dealership policy that all customers must have GAP insurance."

Your Script:
"Dealership policies cannot override federal law. The CARS Rule gives me the right to decline optional insurance products. Please update my paperwork."

Follow-up:
"I'm not interested in discussing your policies. I want to know my legal rights under federal law."

When They Bundle "Protection Packages"

Scenario: "These protection items come as a package—we can't separate them."

Your Script:
"The FTC CARS Rule requires you to allow me to decline optional add-ons individually. Please itemize each product and remove the ones I don't want."

If they claim system limitations:
"System limitations don't override federal compliance requirements. Figure out how to remove these items or I'll shop elsewhere."

When They Use Fear Tactics

Scenario: "Without this protection, you'll be responsible for thousands in repairs."

Your Script:
"I understand you're required to offer these products, and I appreciate that. I'm exercising my right under federal law to decline them."

Don't engage the fear—focus on rights:
"My decision isn't about the products' merit. It's about my legal right to choose what I purchase."

When They Create False Urgency

Scenario: "This special pricing on add-ons expires today."

Your Script:
"Under the CARS Rule, you cannot use deceptive urgency tactics. If these are legitimate products, they'll be available at fair prices whenever I want them."

Call their bluff:
"I'll take the vehicle today without add-ons. If I want protection products later, I'll buy them from third parties at competitive prices."

Scripts for Pushing Back Against Hidden Fees

For Excessive Documentation Fees

Scenario: $800 documentation fee appears on your contract.

Your Script:
"The FTC CARS Rule requires clear disclosure of what this fee covers. Please provide an itemized breakdown of the $800 in services you'll perform."

If it's excessive:
"This appears to be a profit center disguised as a fee. Reduce it to actual cost or explain what $800 worth of paperwork you're doing."

For "Market Adjustment" Fees

Scenario: $2,500 "market adjustment" added to MSRP.

Your Script:
"Under the CARS Rule, you must clearly disclose this as dealer markup, not a required fee. Are you stating this is additional dealer profit?"

Demand honesty:
"Call this what it is—additional dealer profit—and I'll decide if I want to pay it."

For "Prep and Delivery" Charges

Scenario: $599 prep fee for services already included in MSRP.

Your Script:
"The CARS Rule prohibits misrepresenting charges. MSRP includes prep and delivery. This appears to be double-charging for included services."

Request specifics:
"Show me exactly what additional prep services you're performing beyond what's included in MSRP."

For Processing or Administrative Fees

Scenario: Multiple small fees totaling $400+.

Your Script:
"The CARS Rule requires clear disclosure of fee purposes. Please explain each fee and what service it covers, or consolidate them into one transparent charge."

Challenge the total:
"These appear to be profit fees disguised as administrative costs. Provide actual cost justification or remove them."

How to Document CARS Rule Violations

During Your Visit

Use your phone to record (where legal):

  • Audio of verbal misrepresentations
  • Photos of documents with questionable terms
  • Screenshots of online ads with false claims
  • Text messages about the deal

Take detailed notes:

  • Date, time, and participant names
  • Exact quotes of misrepresentations
  • Documents provided or withheld
  • Pressure tactics used

Written Communications

Email everything:

  • Requests for clarification
  • Objections to misrepresentations
  • Demands for CARS Rule compliance
  • Final terms and agreements

Text message confirmations:

  • Key deal points
  • Removal of optional items
  • Final pricing agreements
  • Delivery schedules

Document Collection

Save everything:

  • Original advertisements
  • All contracts and agreements
  • Email correspondence
  • Text message threads
  • Audio recordings (where legal)
  • Photos of documents

Filing FTC CARS Rule Complaints

When to File a Complaint

Clear violations include:

  • Claiming optional items are legally required
  • Refusing to remove optional add-ons
  • Hiding material information about deals
  • Using deceptive language about requirements
  • Bundling optional items as "mandatory packages"

The FTC Complaint Process

Step 1: Go to reportfraud.ftc.gov

  • Select "Auto-related fraud"
  • Choose "Dealer practices"
  • Specify "CARS Rule violation"

Step 2: Provide detailed information

  • Dealership name and location
  • Date and time of incident
  • Names of employees involved
  • Specific CARS Rule violations
  • Supporting documentation

Step 3: Describe the impact

  • Financial harm suffered
  • Deceptive practices experienced
  • Attempts to resolve with dealer
  • Ongoing concerns

Supporting Documentation

Include with your complaint:

  • Purchase contracts showing violations
  • Email or text communications
  • Audio recordings (where legal)
  • Photos of misleading advertisements
  • Witness statements
  • Financial impact calculations

Using the CARS Rule for Better Deals

Pre-Shopping Strategy

Before you visit dealers:

  1. Print relevant CARS Rule sections to bring with you
  2. Prepare standard responses to common violations
  3. Research common add-on markups in your area
  4. Know your rights under federal law
  5. Plan your documentation strategy

Dealer Communication

Set expectations early:
"I'm familiar with the FTC CARS Rule and expect full compliance with required disclosures and my right to decline optional add-ons."

Use legal language:
"Under Section 463.5 of the CARS Rule, please clearly identify all optional items and confirm my right to decline them."

Negotiation Leverage

When dealers resist:
"Non-compliance with federal law isn't negotiable. Either follow the CARS Rule or I'll find a dealer who will."

For persistent violations:
"I'm documenting these CARS Rule violations for potential FTC complaint. Would you like to reconsider your position?"

State-Level Protections That Complement the CARS Rule

Additional Rights by State

California: Stricter disclosure requirements
Texas: Enhanced documentation fee limits
Florida: Stronger cooling-off periods
New York: Additional insurance product protections

Research your state's laws:

  • Motor vehicle dealer regulations
  • Consumer protection statutes
  • Attorney general guidance
  • Cooling-off period rights

Combining Federal and State Protections

Use both levels:

  • CARS Rule for misrepresentation issues
  • State law for additional protections
  • Local consumer protection for specific violations
  • Industry licensing boards for dealer misconduct

Advanced CARS Rule Strategies

For Online Shopping

Email compliance requests:
"Please confirm this online price complies with CARS Rule disclosure requirements and includes all required fees with optional add-ons clearly marked."

For Finance and Insurance

F&I compliance statement:
"Before we begin, please confirm you'll comply with CARS Rule Section 463.5 for all optional product presentations."

For Trade-In Negotiations

Trade value protection:
"Under the CARS Rule, provide clear, honest information about my trade value without conditioning it on purchasing optional add-ons."

The Bottom Line: Your New Power

The FTC CARS Rule fundamentally shifts power from dealers to consumers by requiring honesty and transparency. But these protections only work if you know and use them.

Your new advantages:

  1. Federal law backing your rights
  2. Clear standards for dealer conduct
  3. Enforcement mechanisms for violations
  4. Legal language to counter deception
  5. Documentation requirements for dealers

Key Actions:

  • Learn the rule before you shop
  • Use specific legal language in discussions
  • Document everything for potential complaints
  • Report violations to appropriate authorities
  • Share your experience to help other consumers

Remember: The CARS Rule doesn't eliminate aggressive sales tactics, but it makes many of them illegal. Use your new federal rights to demand the honest, transparent car buying experience you deserve.

The playing field has been leveled—now use your new power to get a fair deal.