U.S. Federal Trade Commission Pauses Car-Buying Rules that would Limit Junk Fees and Shady Dealership Tactics
Last year we rejoiced as we reported on the idea of the government putting a stop to the deceptive tactics of shady dealerships and their junk fees. However, the U.S. Federal Trade Commission (FTC) has hit a roadblock in implementing its rule aimed at restricting dubious practices by car dealerships and safeguarding consumers from last-minute fees. The rule, known as the Combating Auto Retail Scams (CARS) rule, had received unanimous approval from the FTC late last year and was slated to become effective on July 30th. However, it has now been put on hold due to opposition from dealer lobbyists.
The National Automobile Dealers Association (NADA) and the Texas Automobile Dealers Association jointly filed a petition with the Fifth Circuit Court of Appeals, challenging the legitimacy of the CARS rule. The court has agreed to hear the case, leading to the postponement of the rule’s implementation. The crux of the legal dispute revolves around whether the FTC has the authority to impose such regulations.
In their petition, the dealership groups labeled the CARS rule as “an abuse of discretion” and are seeking a court order to block its enforcement. The FTC contends that the rule imposes minimal, if any, substantial costs on law-abiding dealerships. Instead, it aims to level the playing field for both dealerships and consumers by eliminating junk fees and hidden costs.
The legal battle is expected to unfold quickly, given that the petition for expedited consideration implies a decision from the courts within the year. Should the court rule in favor of the FTC, the agency anticipates only a slight delay in implementing the CARS rule, possibly before the close of 2024.
However, even if the FTC prevails in this case, challenges may persist. Dealer groups have not only contested the rule in court but have also lobbied Congress to enact laws directly limiting the FTC’s authority over car sales. The potential financial repercussions for violating the CARS rule may shed light on the intensity of this opposition, with each offense carrying a hefty penalty of $50,120 under trade regulation rules. The outcome of these legal and legislative battles will likely shape the landscape of car sales regulations in the coming months.
Source: U.S. FTC Public Affairs
More Stories
Audi A8 Production Ends After 32 Years as Iconic Luxury Sedan Bows Out Without an Immediate Replacement
There’s something rather disappointing about watching another traditional luxury sedan disappear, especially one that never felt the need to shout...
2027 Ford Super Duty F-250 and F-350 Invoice Price, Dealer Cost, and What You Should Pay
The 2027 Ford Super Duty arrives with one of its most significant powertrain changes in recent memory: the 7.3-liter Godzilla...
2027 Chevrolet Trax Invoice Price, Dealer Cost, and What You Should Pay
The 2027 Chevrolet Trax gets a mid-cycle refresh that brings meaningful technology and safety upgrades, but the lineup also shrinks...
2027 Ford F-150 Invoice Price, Dealer Cost, and What You Should Pay
The 2027 Ford F-150 arrives with its most significant powertrain update in years: a new 3.0-liter V6 replaces the outgoing...
2027 Chevrolet Silverado EV Invoice Price, Dealer Cost, and What You Should Pay
The 2027 Chevrolet Silverado EV arrives with a broader range lineup, native NACS charging compatibility, and a price spread that...
Ford Mustang Shelby GT350 Successor Reportedly Coming With a Naturally Aspirated V8 and Manual Transmission
Some of the best Mustangs ever built have followed a relatively simple recipe: a powerful naturally aspirated V8, a proper...
