Addressing the ongoing legal challenge against the Combatting Auto Retail Scams (CARS) Rule, the Federal Trade Commission (FTC) has decided to postpone the rule’s effective date, originally set for July 30, 2024. The decision was made in response to petitions from two industry groups seeking to overturn the rule, which they claim imposes undue burdens on car dealerships.
The FTC, in its order, refuted these claims, emphasizing that the rule does not necessitate significant compliance costs for dealers who already adhere to legal standards. The Commission pointed out that the allegations made by the petitioners are based on misinterpretations of the rule’s requirements. According to the FTC, law-abiding dealerships are not at a competitive disadvantage and should not incur substantial costs due to the rule.
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In a press release, the FTC highlighted the benefits of the CARS Rule, asserting that it is designed to protect consumers from pervasive and illicit tactics such as bait-and-switch schemes and unnecessary fees prevalent in the car buying process. The rule is projected to save consumers over $3.4 billion and approximately 72 million hours annually, thereby fostering a fair and transparent marketplace.
In light of the ongoing legal proceedings and the request for expedited review by the litigants, the FTC expressed that the delay in the rule’s implementation should be brief, potentially lasting only a few months. The unanimous decision (3-0 vote) to issue the order underscores the Commission’s commitment to ensuring a balanced and fair automotive retail environmentF, benefiting both consumers and honest dealers.
