At a glance
- Status
- Vacated and removed
- Vacated
- January 27, 2025
- Removed from the CFR
- February 12, 2026
- What applies now
- FTC Act section 5, the FTC pricing FAQs, Reg Z and Reg M, and state laws
On this page
What happened to the CARS Rule
The FTC adopted the CARS Rule as 16 CFR Part 463 to set rules on dealer pricing, add-ons and advertising. Dealer groups challenged it. On January 27, 2025, the Fifth Circuit vacated the rule in National Automobile Dealers Association v. FTC, holding that the FTC "violated its own regulations when it failed to issue an ANPRM", an advance notice of proposed rulemaking.
The FTC then formally withdrew the rule and removed Part 463 from the Code of Federal Regulations, effective February 12, 2026, in a Federal Register notice. Anything that tells you the CARS Rule is in force is out of date.
What applies to dealers now
Losing the rule did not change what the FTC considers deceptive. It still brings dealer cases under section 5 of the FTC Act, which bans unfair or deceptive practices. What dealers follow today:
- The FTC's pricing FAQs (September 2026). The advertised price should be the price any buyer can pay, with required fees such as doc fees included. Read our pricing guide.
- Warning letters. In March 2026 the FTC warned 97 dealer groups about deceptive pricing.
- Truth in Lending and Consumer Leasing ad rules (Reg Z 1026.24 and Reg M 1013.7) for payment and lease ads.
- The Used Car Rule (16 CFR Part 455): a Buyers Guide on every used car.
- State law. California's own CARS Act, SB 766, took effect October 1, 2026. Read our California guide.
Recent FTC dealer cases
The FTC's auto cases since the rule was vacated show where it is looking: advertised prices that buyers can't get, fees added at the desk, and add-ons sold as if they were required.
- Leader Automotive Group (with Illinois, December 2024): bait-and-switch pricing, add-ons and junk fees. The proposed order requires the offering price in ads and express, informed consent for add-ons and fees.
- Lindsay Auto Group (with Maryland, 2026): deceptive pricing and unwanted add-ons, with refunds for buyers.
- Manchester City Nissan (with Connecticut, 2026): allegations of deceptive fees.
- Greenway Auto Group (October 2026): advertised prices well below what buyers were charged.
Each is on the FTC's list of auto industry cases.
What to do at your dealership
Put the full price in every ad
Include doc fees and any other fee every buyer pays. Leave out only taxes and government fees. Check your website's listing prices too.
Make add-ons truly optional
Show the price without them, say they are optional, and get the buyer's clear OK on each one.
Fix payment and lease ads
If an ad shows a payment or a down payment, add the disclosures Reg Z or Reg M requires.
Keep proof
Keep the ads, the menus and the signed add-on consents in the deal jacket.
Rules checked and limits
Rules checked October 31, 2026. We read every rule on this page in the eCFR or on the agency's own site, and each is linked in the sources below. We re-check them every quarter.
Templates and tools, not legal advice. CarShots is software, not a law firm. For a question about your own dealership, ask your attorney or your state dealer association.