Navigating the FTC CARS Rule: Essential Guidance for Independent Dealers

The U.S. House Appropriations Committee recently delayed enforcing the FTC's CARS Rule until September 30, 2025. While this provides some breathing room, independent auto dealers should begin preparing to ensure compliance when the rule takes effect. The CARS Rule mandates more transparent cost disclosures, bans misleading advertisements, and requires explicit customer consent for additional services like warranties or GAP insurance.

NIADA'S PERSPECTIVE
The National Independent Automobile Dealers Association (NIADA) supports the postponement, arguing that the rule could impose significant burdens on independent dealers. NIADA warns that while aiming for transparency, the rule may introduce additional complexities, particularly for smaller dealerships. Despite these concerns, the organization encourages dealers to use this time to align their practices with the upcoming regulations.

WHY COMPLIANCE MATTERS
While the rule's enforcement is delayed, preparing now is crucial for independent dealers. Compliance will prevent legal issues and build trust with customers through transparent business practices. Dealers must be ready to:

• Disclose all vehicle costs upfront, including documentation fees, to avoid misleading buyers.
• Avoid deceptive advertising by ensuring all offers are genuine and available to every customer.
• Obtain explicit consent for any additional charges or services.

For example, if you advertise a car at $8,999 with a $200 documentation fee, the final price must be $9,199. This practice ensures clarity for the consumer and prevents disputes or confusion at the point of sale. Similarly, any add-ons, like service contracts or warranties, must be fully disclosed, with explicit consent from the buyer, before they're included in the contract.

SPECIAL PROTECTIONS FOR SERVICEMEMBERS
The CARS Rule offers essential protections for military personnel, who are often vulnerable to predatory practices due to frequent relocations. Dealers are prohibited from providing misleading information about costs, military affiliations, vehicle mobility, or repossession laws, particularly concerning servicemembers. The rule aims to safeguard military families' financial well-being and stability by preventing these deceptions.

THE ROLE OF THE MID-ATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION
As an independent dealer, staying informed on regulatory changes is crucial for your business success. Membership in the Mid-Atlantic Independent Auto Dealers Association offers a vital advantage, providing members with up-todate information on legal changes like the FTC's CARS Rule. By staying connected with Mid Atlantic IADA, dealers gain exclusive access to industry updates, training, and resources that can help them stay compliant with new regulations and avoid costly penalties.

MidAtlantic IADA also connects you with industry experts and peers who can offer valuable insights on navigating complex regulatory changes. The association regularly provides workshops, webinars, and direct guidance on compliance best practices, giving dealers the tools they need to remain competitive and trustworthy in a rapidly evolving market.

STEPS TO PREPARE

1. Review your advertising and sales practices to ensure they comply with transparency standards.
2. Train your staff to clearly disclose all costs, terms, and conditions to avoid misunderstandings.
3. Stay informed through MidAtlantic IADA to access timely updates and guidance on regulatory changes and compliance.

In addition to the support from NIADA, MidAtlantic IADA offers localized resources and hands-on guidance to help dealers across the region prepare for the FTC's regulatory framework. Membership provides a crucial support network, assisting independent dealers to adapt to these changes without compromising their operations or customer relationships.

PREPARING NOW FOR FUTURE SUCCESS
Though the enforcement of the CARS Rule has been postponed, the time to act is now. By proactively ensuring compliance, independent dealers can protect their businesses, safeguard their customers, and maintain their reputation in an increasingly transparent marketplace.

For more information on the FTC's CARS Rule and how it impacts your dealership, visit the FTC's guide. To stay updated on critical developments and gain access to exclusive resources, consider becoming a member of the Mid-Atlantic Independent Auto Dealers Association. Your membership can be the difference between staying ahead or falling behind in this rapidly changing industry.