Dealerships Get the Government to Pause Upcharges and Shady Practices

The Federal Trade Commission (FTC) created a rule last year to help consumers against unfair practices and fees. Known as the Combating Auto Retail Scams (CARS), this was supposed to take effect on July 30th, 2024. Now, lobbyists were able to get this paused indefinitely. 

This new development of CARS was fought by the National Automotive Dealers Association (NADA) and the Texas Automobile Dealers Association. They filed a petition with the Fifth Circuit Court of Appeals and challenged the law. The Court agreed with NADA and the Texas Automobile Association to stop CARS from happening. 

One of the biggest issues with this legal battle concerns if the FTC has the jurisdiction to impose this. Both dealership groups called the rule "an abuse of discretion" which they used in court to stop the rule from being implemented. The FTC agrees, saying the rule "does not impose substantial costs, if any" for non-shady dealerships. They guarantee a more even playing field for consumers and dealerships by eliminating hidden costs and junk fees.

If the courts decide to rule for the FTC, the FTC thinks the CARS rule will be delayed by a few months. This means CARS could be enacted before 2025. Even with the FTC fighting and possibly winning this, dealerships have pressured Congress to make laws removing the FTC from regulating car sales. If a dealership breaks the rules, they would have a violation of $50,120.