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Inside the Legal Battle Over the CARS Rule

Updated: Oct 31

Scene depicting a legal battle over the FTC's CARS Rule in a courtroom setting with lawyers, judges, and legal documents, representing the high stakes and complexity of the regulatory challenge.

On January 4th, 2024, just one day after the publication of the CARS Rule, the National Automobile Dealer Association (NADA) took swift action by filing litigation against the Federal Trade Commission (FTC) alongside the Texas Automobile Dealer Association (TADA).




This legal battle, as revealed by James Ganther, in his keynote at Agent Summit 2024, sheds light on the complexities and stakes involved in challenging regulatory measures in the automotive industry.


NADA Challenges the CARS Rule

NADA, representing dealerships nationwide, has taken a strong stance against the CARS Rule. They filed a petition for review, aiming to overturn the rule entirely. Additionally, they requested a stay on the rule's enforcement, originally set for July 30th, 2024, and expedited consideration of the case.


FTC Opposes Stay, Setting Stage for Legal Battle

The FTC contested NADA's motion for stay, signaling their unwavering support for the CARS Rule. This move positioned both parties for a head-to-head legal clash, with NADA and TADA intensifying their arguments against the rule.


Unexpected Turn: FTC Voluntarily Stays Enforcement

In a surprising turn of events, the FTC voluntarily postponed enforcement of the CARS Rule on the day they were due to submit their opposing brief. This unexpected move sparked speculation about the FTC's motives.


Expert Opinions: NADA Gains Advantage, But Outcome Uncertain

According to Ganther, NADA's attorney Paul Metrey suggests the FTC's decision might be a strategic maneuver. By staying enforcement themselves, the FTC may be attempting to avoid a potential legal defeat and maintain a positive image.


High Stakes for the Automotive Industry

While NADA currently seems to hold the upper hand, the ultimate outcome remains unclear. Both sides are preparing for a legal battle that could significantly impact the automotive industry, shaping the future of car sales and consumer protection regulations.


Stay Informed: The Legal Saga Continues

The legal battle surrounding the CARS Rule is far from over. This blog will be updated with further developments as this saga unfolds. Stay tuned to learn how this fight for regulatory clarity and fairness in car sales plays out.






Stay Updated on Automotive Compliance

Subscribe to our blog for ongoing discussions on the CARS Rule, automotive compliance updates, and industry best practices. Follow us on LinkedIn to join the conversation and stay ahead of the curve. Let's navigate the world of automotive commerce together!


More About the CARS Rule:

2 min read

Does the CARS Rule Mean the End of Dealer Fees?

Updated: Nov 12

Conceptual image of a car dealership focusing on 'dealer fees' with visual elements like a car, price tag, compliance documents, dollar signs, and a calculator, emphasizing transparency and regulatory compliance.

Dealer fees have long been a contentious issue. These fees, often tacked onto the final price of a vehicle, have drawn criticism for their opacity and perceived unfairness. However, recent developments in regulatory compliance, particularly the CARS Rule, are reshaping the landscape of dealer fees and how they are perceived and implemented.



Dealer Fees: A Thing of the Past?

Traditionally, dealer fees have been a method for dealerships to maintain their front-end gross profit, ensuring that salespeople can't offer excessive discounts during negotiations. However, the CARS Rule fundamentally changes this practice. According to industry expert James Ganther, dealer fees, whether labeled as documentation fees, pre-sale preparation fees, or otherwise, are likely to become obsolete unless they are included in the advertised "Offering Price."


The Legitimacy of Dealer Fees

Dealer fees have long been considered legitimate as long as they are reasonable and not exorbitant. These fees can, for example, help cover the costs associated with complying with numerous regulations, including the CARS Rule. Complying with all these regulations requires substantial financial investment, which dealerships can recoup through these fees. However, the CARS Rule mandates that any such fees must be included in the advertised price of the vehicle, which poses a significant challenge.


The End of Separate Dealer Fees?

Under the CARS Rule, separate dealer fees will likely become a thing of the past. Any additional charges, such as documentation fees or pre-sale preparation fees, must be included in the initial advertised price. This change means that dealerships can no longer list these fees separately in the transaction paperwork. Instead, they must be part of the overall "Offering Price," simplifying the pricing structure but potentially impacting profitability.


The Future of Dealer Fees Under the CARS Rule

According to Ganther, if the CARS Rule survives ongoing litigation in its current form, dealer fees, as we know them, will likely disappear. This change will fundamentally alter how dealerships handle pricing and compliance. However, by understanding and adapting to these changes, dealerships can navigate the regulatory landscape effectively and continue to thrive in a competitive market.


Stay Informed

As the legal landscape surrounding the CARS Rule continues to evolve, dealerships must stay informed. Check out James Ganther's full keynote on the CARS Rule:






More About the CARS Rule:

2 min read

The Conundrum of Express, Informed Consent in the FTC CARS Rule

Updated: Nov 13

Car dealership scene with a sales representative explaining a document to a customer, highlighting the concept of Express Informed Consent and the importance of clear communication in car buying.

The Federal Trade Commission's (FTC) CARS Rule (Combating Auto Retail Scams) aims to protect consumers from deceptive practices in car buying. However, one key provision, Express Informed Consent, is causing confusion and concern within the automotive industry.



This blog post dives into the complexities of Express Informed Consent, drawing insights from James Ganther's keynote address. We'll explore the challenges dealerships face and encourage you to watch the full video for a deeper understanding.


What is Express, Informed Consent?

What exactly is Express, Informed Consent under the FTC CARS Rule and why is it such a big deal? Let’s start with the definition. The Rule defines Express, Informed Consent as:


“An affirmative act communicating unambiguous assent to be charged, made after receiving and in close proximity to a Clear and Conspicuous disclosure, in writing, and also orally for in-person transactions, of the following:


  1. What the charge is for; and

  2. The amount of the charge, including, if the charge is for a product or service, all fees and costs to be charged to the consumer over the period of repayment with and without the product or service.”


The Rule further clarifies that the following do not constitute Express, Informed Consent:

  • A signed or initialed document, by itself;

  • Prechecked boxes; or

  • An agreement obtained through any practice designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision-making, or choice.


The Problem: Lack of Clarity

The issue lies in the ambiguity surrounding what constitutes "Express, Informed Consent." Traditionally, a signed contract signified that a customer understood and agreed to its terms. However, the CARS Rule adds a layer of complexity to this notion, making it challenging for dealerships to ensure compliance.


A Call for Clarity

The current state of Express, Informed Consent creates a significant obstacle. The retail automotive industry needs clear and comprehensive guidelines to ensure fair and transparent transactions for all. Without this clarity, dealerships are left guessing and potentially facing severe penalties for non-compliance.


Watch the Full Video for Expert Insights

James Ganther's keynote address delves deeper into the challenges surrounding Express Informed Consent. Watch the full video to gain a more comprehensive understanding of this critical issue and its impact on the automotive industry.





Stay Updated on Automotive Compliance

Subscribe to our blog for ongoing discussions on the CARS Rule, automotive compliance updates, and industry best practices. Follow us on LinkedIn to join the conversation and stay ahead of the curve. Let's navigate the world of automotive commerce together!


More About the CARS Rule:

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