The CARS Rule got struck down. Here's what you still owe.

The plain-English version

The FTC's Combating Auto Retail Scams Rule — the CARS Rule — was vacated by the Fifth Circuit on January 27, 2025 in NADA v. FTC, before it ever took effect. The court vacated it on procedural grounds. It is not law, and the FTC would have to start over to bring it back. The source at the foot of this post names the case, the court, the date and exactly what the linked document is.

So why is this guide still here? Because a lot of dealers heard "the rule got struck down" and concluded the obligations went away. They didn't. Almost everything the CARS Rule would have required — advertise a price the customer can actually buy the car for, disclose add-ons before they're on the buyer's order, get real consent for optional charges — is already enforceable under Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices, plus your state's UDAP statute and add-on disclosure laws.

The rule is gone. The exposure is not. This guide is for dealers who want to understand what that means for their store before they take it to counsel. It is general information, not legal advice — when in doubt, talk to your dealer association compliance counsel.

What the rule would have required — and what still reaches the same conduct

Four pillars. The CARS Rule would have written each one into a specific federal requirement, and none of them ever took effect. They are still worth working through, because each describes conduct that Section 5 and state UDAP and disclosure statutes already reach.

1. Offering price disclosure

The rule would have required dealers to clearly and conspicuously disclose the offering price of a vehicle — the most the dealer will charge for it, exclusive only of taxes and government fees — in advertising and at every point in the deal.

That federal requirement never arrived. The underlying principle did not need it: a price advertised at one number and sold at another is the fact pattern a deceptive-pricing claim is built on under Section 5 and state UDAP law. The "starting at" gymnastics, the price on the website that doesn't match the price on the buyer's order, the "internet special" that takes a phone call to unlock — the vacatur made none of those safer.

2. Add-on disclosure and the "no-benefit" prohibition

For every add-on a dealer offers (paint protection, theft-recovery devices, VIN etching, service contracts), the rule would have required disclosure of:

• The price of the add-on, separately and itemized.
• That the add-on is optional — the customer is not required to buy it.

It also would have prohibited charging for add-ons that provide no benefit to the consumer — the standard examples being a nitrogen-filled-tires upcharge on a car that already has nitrogen, or VIN etching already itemized on the buyer's order from the manufacturer.

Charging for something that does nothing for the customer, or presenting a required charge as optional, is conduct Section 5 and state add-on disclosure statutes address on their own terms. Neither was affected by the vacatur.

3. Express informed consent

Before charging for anything — the vehicle, an add-on, a doc fee, a "dealer prep" — the rule would have required the consumer's express informed consent to that specific charge: unambiguous, identifying the specific charge, and retained.

The federal requirement is gone; the evidentiary problem is not. When a customer disputes a charge, what settles it is what the store can show the customer saw and agreed to. A signature on a buyer's order at the desk is a starting point, but being able to show, in 2029, that a customer in 2026 saw the version of the disclosure that was in effect, signed it at a specific timestamp, and was given the opportunity to decline is what turns a dispute into a lookup.

4. Misrepresentation prohibitions

The rule would have banned a long list of misrepresentations: about the vehicle's condition, about whether financing is required, about whether an add-on is required, about cash availability, about the cost of any feature, and about the dealer's relationship with a lender. The list would not have been exhaustive — it would have swept in any material misrepresentation made in the course of the sale.

This is the pillar that changed least when the rule was vacated, because it was the least novel: Section 5 already prohibits material misrepresentations in commerce, and every state UDAP statute has its own version.

Why it matters now

You might be tempted to wait. Don't.

• Section 5 did not go anywhere. It is the authority that actually matters, and it reaches advertised pricing and add-on charges with or without a rule underneath it.
• State UDAP (unfair-and-deceptive-acts-and-practices) statutes are where a deceptive-pricing claim actually gets pleaded, with or without a federal rule underneath it. Whether your own state gives a private plaintiff a right of action under its statute is a question for your counsel; this post does not answer it.
• State doc-fee and addendum disclosure statutes were never dependent on the CARS Rule and are unaffected by it being vacated.

Waiting is a bet that the exposure lived in the rule. It didn't. It lives in the statutes underneath it, and those are still there.

Five failure modes worth auditing

These five patterns come up again and again, and not one of them needs a new regulation to become a problem.

Failure 1 — No addendum versioning

The store has a compliance addendum. Maybe it was drafted in 2021. Maybe a regional 20-group consultant updated it in 2023. There is no record of which version of that addendum was attached to which deal at which time.

When a customer disputes a 2024 charge in 2026, the GM is digging through email and Google Drive trying to figure out which PDF was in effect. That is not an audit trail. That is a problem.

Failure 2 — Mandatory-as-optional sleight-of-hand

The store calls something "optional" on the buyer's order — a paint protection, an etching, a service contract — but the desk is in fact treating it as mandatory. The customer can technically decline, but the salesperson re-prices the deal in a way that makes declining painful.

The defensible practice is unambiguous: if the customer can decline and you'll still sell them the car at the disclosed offering price, it's optional. If they can't, it's mandatory and has to be in the offering price itself. There is no third option.

Failure 3 — Doc fee buried in the price quote

The customer gets a quote on the website at $24,995. They get to the dealership and the buyer's order has a $799 doc fee they didn't see online. Whether the doc fee has to sit inside the advertised price is a state-by-state question — but a fee the customer first sees on the buyer's order is the exact fact pattern Section 5 and state UDAP claims are built on. Disclose it before the customer commits, and make the contract figure match the one they saw at quote.

A one-line disclosure on the website's price page is the cheapest fix on this list.

Failure 4 — E-signature without disclosure linkage

The customer e-signs a buyer's order on a tablet. The disclosure language was on a separate web page they may or may not have scrolled to. The signed PDF the dealership archives doesn't include the version of the disclosure the customer saw.

If your e-signature provider isn't pinning the disclosure version into the signed packet, you don't have express informed consent on a defensible basis. You have a signature on a piece of paper and a separate web page that someone might be able to find again.

Failure 5 — No audit trail at all

The most common mode by far. The store has policies. The store has a binder. The store does not have a queryable database of "show me every deal closed in May 2024 with disclosure version 3.2." When the FTC or a state AG asks, the answer is "we'll need a couple weeks to put that together," and that answer is itself a finding.

How to be compliant without buying new software you don't need

The first three of these five failure modes can be fixed with process alone:

1. Date-stamp every addendum revision. Save it to a single shared drive, named with the version. Train the desk to grab the current version every morning.
2. Audit your buyer's order. Every line item is either in the offering price or labeled clearly as optional with a price and an "I decline" path.
3. Standardize the doc fee disclosure. Same dollar figure on the website, in the quote email, and on the buyer's order.

These three cost nothing but attention, and they close the failure modes that need no software at all.

Where AutoLabels comes in (if you want the audit trail automated)

For dealers who want failures 4 and 5 closed out — disclosure linkage, and a per-VIN record the store can actually answer from — that is what AutoLabels does. Every addendum is versioned in the database. Every signature is pinned to the version of the disclosure the customer saw, in a tamper-evident per-VIN file generated on every deal. So "every deal closed under disclosure version 3.2, last 36 months" is a lookup rather than a reconstruction.

Be precise about what that is and is not, because it is the thing dealers most often assume. There is no self-service audit-log export in the product today, and none is claimed: the packet is produced by RooftopOS on request, and the Trust Center publishes the state of that control alongside every other one.

See how AutoLabels works. Or if you'd rather just talk through your current setup, book 20 minutes with us and we'll walk through what your store is exposed to specifically.

This post is general information, not legal advice, and it has not been reviewed by counsel. The CARS Rule was vacated by the Fifth Circuit in January 2025 and is not in force; the obligations described here rest on FTC Act Section 5 and state UDAP and disclosure statutes, and there are nuances we did not cover (used-car-specific rules, military disclosures, language-of-the-negotiation requirements). Confirm your specific store's posture with qualified counsel.