Combating Auto Retail Scams Trade Regulation Rule
The Federal Trade Commission ("FTC" or "Commission") is issuing this Combating Auto Retail Scams Trade Regulation Rule ("CARS Rule," "Rule," or "Final Rule") and Statement of Basis and Purpose ("SBP") related to the sale, financing, and leasing of covered motor vehicles by covered motor vehicle dealers. The Final Rule, among other things, prohibits motor vehicle dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles, requires accurate pricing disclosures in dealers' advertising and sales communications, requires dealers to obtain consumers' express, informed consent for charges, prohibits the sale of any add-on product or service that confers no benefit to the consumer, and requires dealers to keep records of certain advertisements and customer transactions.
What this rule actually says
The FTC's CARS Rule stops car dealers from lying about vehicles, prices, and financing. It requires dealers to show real prices upfront, get customers' permission before charging them for anything, and ban worthless add-ons. Dealers also have to keep records of ads and sales to prove they followed the rules.
Who it applies to
- If you're selling, leasing, or financing motor vehicles to consumers — this applies. Period.
- If you're building AI tools for car dealers (pricing software, chatbots that quote prices, financing arrangers) — check the next bullet.
- If your AI makes claims about vehicles or prices on behalf of a dealer — the dealer is liable, but your tool needs to produce accurate outputs or you're helping them break the law.
- If your AI arranges financing, suggests add-ons, or handles customer consent workflows — this directly affects you.
- Jurisdictions: United States only. The FTC enforces this federally.
- Data in scope: Customer names, vehicle details, pricing info, financing terms, consent records.
- Data out of scope: This rule doesn't create new privacy obligations beyond what already exists—it's about truthfulness and consent, not data collection.
If you're building medical scribes, hiring assistants, or support chatbots that have nothing to do with cars: you can stop reading. This doesn't apply.
What founders need to do
- Audit your outputs for accuracy (2–3 days). If your AI generates prices, vehicle descriptions, or financing terms, test it against ground truth. Document that you tested it.
- Add consent workflows if you're handling charges (3–5 days). Before your system recommends an add-on or charges a customer, it must get explicit yes/no consent and log it.
- Flag dealer misuse in your terms of service (1 day). State clearly that dealers can't use your tool to make false claims. You're not their lawyer, but documenting that you prohibited misuse protects you.
- Keep audit logs of what your AI recommended (ongoing, ~1 hour/week setup). If the FTC investigates a dealer, they'll want records. Make sure your system logs recommendations so the dealer can comply.
- Monitor FTC guidance (ongoing, ~30 min/month). The FTC may clarify how AI fits into CARS. Subscribe to their updates or check back quarterly.
Bottom line
Monitor and act now if you're in the auto retail AI space; everyone else can ignore this.