--- title: "Shady Car Dealers Win as Consumer-Protection Rules Are Thrown Out of Court" date: "2025-01-28" modified: "2025-01-28" authors: - name: "Nico DeMattia" job_title: "Contributing Writer" link: "https://www.thedrive.com/authors/nico-demattia" url: "https://www.thedrive.com/news/shady-car-dealers-win-as-consumer-protection-rules-are-thrown-out-of-court" categories: - "Car Buying" - "News" --- # Shady Car Dealers Win as Consumer-Protection Rules Are Thrown Out of Court ![A photo of the Federal Trade Commission building]() *\Getty Images\* Why can't we ever have nice things? On Monday, the 5th U.S. Circuit Court of Appeals ruled in favor of the [National Automobile Dealers Association]() (NADA) and axed the Federal Trade Commission's (FTC) congressional-backed CARS (Combatting Auto Retail Scams) Rule. That means dealerships can continue sneaking hidden fees into vehicle purchases at the last minute. In 2022, the FTC proposed the CARS Rule to ban dealerships from hiding fees and using classic bait-and-switch tactics to drive consumer costs up. You're likely no stranger to dealers adding paperwork fees, contracts for services you didn't ask for, underbody protection you didn't want, gap insurance, and redundant warranties right at the end of the deal. Combing through everything to pick those out is tiresome, especially as stubborn salespeople and dealership managers argue about their necessity. To combat such tactics, the CARS Rule would've forced dealers to provide a transparent "offering price" to customers. That price was meant to be a detailed breakdown of all fees, dealer-installed options, and anything on top of the vehicle's initial MSRP. The only thing not included in that sum would've been government-required taxes, titling, and registration fees. With the CARS Rule, there was no place for shady dealership tactics to hide. ![]() **Getty Images** The CARS Rule was finalized in January 2024. But it was immediately put on hold after being legally challenged by NADA and a Texas dealership group, who argued that the FTC violated procedure by writing the regulations without giving advance notice to relevant parties. All the while, NADA argued to the public that, somehow, the CARS Rule would make customers' lives *more* difficult because it would add time to the buying process. Citing [a study done by the Center for Automotive Research]() (CAR)—in which CAR thanks the NADA for the opportunity to conduct such a study, by the way—Geoffrey Pohanka, a NADA board member and dealership group owner, [said that the CARS Rule could add 60 to 80 minutes]() to every transaction because it involved "new, untested forms." Pohanka argued that the extra hour or so would cost customers $1.3 billion per year in lost time. Even if that were true, it's maddening to hear a dealer cite *wasting time* as an excuse for not being more transparent to customers. He also took issue with a stipulation that dealers would have to keep records of and turn over all email and text communications with customers upon the FTC's request, just to have some oversight over deceitful practices. Conversely, the FTC claimed that the CARS Rule would give customers *back* 72 million hours per year, in addition to $3.4 billion in savings from not having to pay vaporware fees. I've never been mistaken for a mathematician but if we believe both claims, I think that after $3.4 billion in savings and $1.3 billion in lost time, customers would still be up $2.1 billion with the CARS Rule. Judge Stephen Higginson was the lone dissenter in the Appeals Court's 2-1 ruling in favor of the NADA. According to *[Reuters](),* Higginson wrote that the CARS Rule would provide “price transparency and rules against deception, which would spur billions of dollars in economic benefit for U.S. consumers.” We'll never know, though, because the CARS Rule was paused the moment it was finished and has now been thrown out, pretty much on a technicality. There was hope for a couple of years, but now we're back to dealing with manipulative salespeople, bogus fees, and the old, "Oh, I'm sorry, I can't find your car keys. Sit here with the manager for 47 minutes while I check the back for them." *Got tips? Send 'em to tips@thedrive.com* ## Author Nico is a writer and reviewer from New Jersey who probably thinks he’s a lot funnier than he actually is. His love of cars began when he was just a kid playing Gran Turismo 3, grinding out enough race wins with a Mazda Miata to save up for an in-game RUF 911. That passion for small, lightweight sports cars drove his desire to learn more about the industry, get his hands on as many cars as he could, and bring those experiences to life on the page. He cut his teeth writing about BMWs, Volkswagens, and Audis, mostly, and has owned far too many of each. He’s on his fourth 3 Series sedan, but all of his old, cheap German cars have forced him to learn more about car maintenance than his mechanical capability can handle. Too many late nights have been spent scrambling to get a car running by morning so he could get to work. For some reason, he never seems to learn that old Bimmers probably aren’t the best daily drivers. But he loves more than just old German cars. He’ll gladly drive and discuss anything with four (or even three) wheels. Cars aren’t his only passions, though. Nico is also a big nerd and loves movies, video games, comic books, and cares far too much about the New York Giants. So don’t be surprised if you see football references or dumb, obscure movie quotes in any of his car reviews. ### Author social links [Instagram]() [LinkedIn]()