The FTC’s CARS Rule never took effect. The Fifth Circuit vacated it on January 27, 2025 in NADA v. FTC because the Commission skipped the advance notice of proposed rulemaking its own regulations required, and the FTC formally withdrew the rule from the Code of Federal Regulations effective February 12, 2026 (91 FR 6507). Nothing in it binds a dealership today. What does bind you is older and still fully in force: Section 5 of the FTC Act, the Regulation Z advertising rules at 12 C.F.R. § 1026.24 for credit, Regulation M at 12 C.F.R. § 1013.7 for leases, the FTC endorsement guides for reviews, and your state’s advertising regulations — which in most states are stricter than anything federal. Verified September 2026.
This Is Not Legal Advice
General information for dealership managers, written so you can ask your own counsel sharper questions. It is not legal advice and creates no advisory relationship. State advertising regulations vary enormously and are the part most likely to catch you; nothing below substitutes for someone who knows your state’s. For the rules on contacting customers rather than advertising to them, see TCPA and dealer outreach compliance.
What Happened To the CARS Rule
The Combating Auto Retail Scams Rule was published on January 4, 2024. It would have required offering-price disclosure, banned bait advertising, required express informed consent for charges, and imposed substantial recordkeeping. NADA and the Texas Automobile Dealers Association petitioned the Fifth Circuit the day it published.
On January 27, 2025 the court vacated it, 2-1. The ground was procedural: Section 18(b) of the FTC Act and the Commission’s own regulations require an advance notice of proposed rulemaking for a rule of this kind, and the FTC had not issued one. The court found the failure was not harmless.
The FTC did not appeal. On February 12, 2026 it published a final action withdrawing the CARS Rule from the rulebook, alongside conforming changes to two other rules that had met the same fate in court. The citation is 91 FR 6507.
The practical consequence for a dealer is simple, and worth saying plainly because compliance vendors were selling CARS packages well into 2025: there is nothing to comply with. If a product in your store was bought to satisfy the CARS Rule, it is satisfying a rule that does not exist.
Why That Does Not Mean Open Season
The rule was struck because of how it was made, not because the FTC lacked any interest in the conduct. Section 5 of the FTC Act still prohibits unfair or deceptive acts and practices, and it has always been the instrument the Commission used against dealer advertising — it brought those cases for decades before the CARS Rule was drafted and it can bring them now.
The difference is that Section 5 is a standard rather than a checklist. It does not hand you a list of required disclosures. It asks whether the overall impression of your advertisement is misleading to a reasonable consumer, and whether the qualifying information is clear and conspicuous rather than buried. That is a harder thing to engineer around than a rule with numbered paragraphs.
Regulation Z: The Credit Trigger List
This is the one that catches the most dealership advertising, and it is not new. Under 12 C.F.R. § 1026.24(d)(1), an advertisement for closed-end credit that states any of the following triggers additional disclosure:
- the amount or percentage of any down payment;
- the number of payments or period of repayment;
- the amount of any payment;
- the amount of any finance charge.
State any one of those and § 1026.24(d)(2) requires the advertisement to also state the amount or percentage of the down payment, the terms of repayment reflecting the obligation over the full term including any balloon payment, and the annual percentage rate using that term — plus, if the rate may increase after consummation, that fact.
Two things stores get wrong. “$399 a month” is a triggering term, so an ad containing it and nothing else is non-compliant no matter how attractive the offer is. And “APR” has to appear spelled as the annual percentage rate using that term — an interest rate is a different number and does not satisfy the requirement.
What does not trigger the list is a general statement without numbers. “Financing available” and “low monthly payments” carry no triggering term. That is precisely why so much compliant dealership advertising is vague, and it is a legitimate creative constraint rather than a failure of nerve.
Regulation M: Leases Have Their Own List
Lease advertising runs on a parallel track at 12 C.F.R. § 1013.7. The triggers are stating the amount of any payment, or that any or no initial payment such as a capitalized cost reduction is due at signing.
That second trigger is the one that surprises people: advertising “zero due at signing” is itself a trigger. Once triggered, the ad must state that the transaction is a lease, the total amount due at consummation or delivery, the number, amounts and timing of scheduled payments, whether a security deposit is required, and — where end-of-term liability depends on the difference between residual and realised value — that an extra charge may be imposed at the end of the term.
Reviews, Testimonials and Endorsements
A live area, and one where dealership marketing has genuinely changed. The FTC’s endorsement guides expect a material connection between an endorser and the store to be disclosed, expect testimonials to reflect typical results or to disclose what is typical, and treat fake or incentivised reviews as deceptive. A separate FTC rule now addresses fake and manipulated consumer reviews directly.
For a store this mostly comes down to: do not write your own reviews, do not pay for reviews without clear disclosure, do not gate review requests so only happy customers get asked, and do not use a testimonial describing an unusual outcome as though it were the normal one. The operational side of earning reviews rather than manufacturing them is in how BDC training improves CSI and online reviews.
Where Enforcement Actually Comes From
Most dealership advertising trouble is not federal. It is the state attorney general, the state motor vehicle board or the DMV, acting under state dealer advertising regulations and state unfair-and-deceptive-practices statutes.
Those rules are frequently more prescriptive than anything in this article — governing how a “sale price” may be described, whether documentary fees may be excluded from an advertised price, how many vehicles must be available at an advertised price and for how long, what a disclaimer must be sized at, and how long you must keep a copy of every advertisement. Several states require ad retention for a fixed period, which is the single cheapest thing on this page to start doing today.
A Practical Checklist
- Cancel any CARS Rule compliance product still being paid for. The rule was withdrawn in February 2026.
- Take your last month of advertising — mail, digital, radio scripts, social — and mark every payment figure, down payment, term and finance charge.
- For each one marked, confirm the APR and full repayment terms appear in the same piece, legibly. Mail creative is the usual offender because space is tight.
- Check lease creative separately against the Regulation M list, including any “due at signing” claim.
- Confirm every advertised vehicle exists, is available, and that stock numbers and expiry dates are stated.
- Read your state’s dealer advertising regulation. Then read your vendors’ creative against it.
- Archive every advertisement with its run dates. Many states require it and it is the record you will want.
Frequently Asked Questions
Is any part of the CARS Rule still in effect?
No. The Fifth Circuit vacated it in its entirety on January 27, 2025 and the FTC withdrew it from the Code of Federal Regulations effective February 12, 2026 at 91 FR 6507. It never had an enforceable compliance date.
Could the FTC bring it back?
It could start again, and would have to begin with the advance notice the court said was missing — a process measured in years, with notice and comment along the way. As of September 2026 no such proceeding has been opened. Nothing would happen quietly.
Does “$0 down” trigger disclosure?
For credit, yes — the amount or percentage of any down payment is a triggering term under § 1026.24(d)(1), and zero is an amount. For leases, stating that no initial payment is due at signing is likewise a trigger under § 1013.7.
Are we safe if the disclosures are in the fine print?
Not necessarily. Both the specific regulations and Section 5 turn on whether the information is clear and conspicuous. Type so small, contrast so low or duration so brief that a reasonable consumer would not take it in is the classic way an otherwise complete disclosure fails.
Summary
The rule dealers spent 2024 preparing for does not exist: vacated January 27, 2025, withdrawn from the CFR on February 12, 2026 at 91 FR 6507. What governs dealership advertising is what governed it before — Section 5 of the FTC Act on the overall impression, the Regulation Z trigger list at § 1026.24(d) whenever a payment or term appears, the Regulation M list at § 1013.7 for leases, the endorsement guides for reviews, and a state advertising regulation that is probably stricter than all of them. Cited against the Code of Federal Regulations and the Federal Register in September 2026; not a substitute for your own attorney.
