We have until January 8th, 2024 to submit comments to the FTC about proposed rules to BAN CAR DEALER JUNK FEES. Please visit to be heard!

Monday, December 18, 2023

CARS: Combating Auto Retail Scams

Federal Trade Commission Chair Lina M. Khan: “When Americans set out to buy a car, they’re routinely hit with unexpected and unnecessary fees that dealers extract just because they can. The C.A.R.S. rule will prohibit exploitative junk fees in the car-buying process, saving people time and money and protecting honest dealers.”

This new FTC rule of law also prohibits dealers from using bait-and-switch claims to lure vehicle buyers to the lot, including claims about the cost of a car or the terms of financing, the availability of any discounts or rebates, and the actual availability of the vehicles being advertised. It also attacks hidden junk fees, which are charges buried in lengthy contracts that consumers never agreed to pay. In most cases, these fees are for services or products that provide no benefit to consumers.

This new FTC law goes into effect on July 30, 2024. If you’re not in dire need to buy a new or used car immediately, you’ll be far less likely to be cheated by a car dealer if you can wait until this date.

The main concern I have with all laws, rules, and regulations is “lack of enforcement.” The Federal Trade Commission has nowhere near the resources to police thousands of car dealers. It’s up to car buyers to notify the FTC when a car dealer violates their rules, but even then, they can be overwhelmed by complaints.

The good news is that the FTC CARS rule falls under the Unfair and Deceptive Trade Practices Acts (UDTPA), which all fifty states have versions of. The benefit to the consumer of a UDTPA is that the defendant (car dealer) in the lawsuit must pay the attorney’s fees of the plaintiff (car-buyer) when they win the lawsuit. This incentivizes lawyers to take on cases of lower economic recovery potential. For example, if a car dealer refused to reimburse a customer for the car that they were tricked into buying at a cost of $20,000, it could cost him close to $100,000 in attorney’s fees to reimburse your attorney, plus the $20,000 he owes you, the scammed car buyer.

If you must buy a car sooner than July 30, 2024, go to the FTC website,, and read "The new CARS Rule: What You Need to Know Before You Sign Anything with a Car Dealer." All car dealers are very much aware of this new law, and you should make it clear to the dealer that you expect your car purchase to comply fully, even though the law isn’t in effect until July 30, 2024. Demand that the dealership sign a written guarantee to this effect. You still won’t have the protection of the FTC CARS rule, but you would have the right to a civil action for violation of a contract.

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