The CARS Rule Is Gone — but the FTC Just Put 97 Dealer Groups on Notice Over Pricing

If you filed the FTC's CARS Rule under "problems that went away," you're half right — and the half you're missing is the expensive one. The rule is gone, but the enforcement theory behind it is very much alive, and this spring the FTC made that unmistakable. Here's where total-price advertising actually stands in 2026, and what a compliance-minded store should be doing about it.

The rule is dead. The scrutiny isn't.

The Combating Auto Retail Scams (CARS) Rule never took effect. On January 27, 2025, the Fifth Circuit vacated it in a 2-1 decision, finding the FTC had skipped a required procedural step by not issuing an advance notice of proposed rulemaking. The Commission chose not to appeal, and it formally withdrew the rule from the books effective February 12, 2026. So none of CARS' specific checklist — the itemized disclosures, the express-consent scripting, the recordkeeping mandates — is federal law today.

What did not disappear is Section 5 of the FTC Act, which prohibits unfair or deceptive acts and practices and has governed auto advertising for decades. The FTC doesn't need CARS to come after a misleading price ad; it never did. And in March it reminded the industry of exactly that.

97 warning letters, 200-plus rooftops

On March 13, 2026, the FTC announced it had sent warning letters to 97 auto dealership groups — covering more than 200 individual locations, from independent used-car lots to public retailers including AutoNation, Lithia Motors, Group 1 Automotive, Hendrick Automotive Group, and Ken Garff. The message was blunt: the price you advertise must be the total price a consumer will actually have to pay, including all mandatory dealer-imposed fees, excluding only government charges like taxes.

The letters spelled out the practices the FTC considers deceptive under Section 5, and it's worth reading them against your own current ads:

• Advertising a price that doesn't reflect all required fees.
• Advertising a price built on rebates or discounts not available to every customer (recent-college-grad, military, loyalty, conquest — if not everyone qualifies, it can't anchor the headline price).
• Advertising a price that ignores an additional required down payment.
• Conditioning the advertised price on the buyer using dealer financing.
• Requiring the customer to buy add-ons that aren't in the advertised price.

The through-line is simple, and it's the standard to build your merchandising around: the most prominent price in any ad should include every charge the buyer cannot decline. A warning letter isn't a fine, but it's a documented notice — and the FTC said plainly it will "take additional action as warranted."

The states aren't waiting for Washington

Even if you'd bet on a quiet FTC, the bigger shift over the last two years has been at the state level, where enforcers have moved aggressively and independently. California and Minnesota both have broad "hidden fee" statutes now in effect that require advertised prices to include mandatory fees, and Connecticut, Colorado, Oregon, Virginia, and Massachusetts have adopted their own all-in-pricing or enhanced-disclosure requirements. A long list of additional states introduced total-price bills in 2025, so the patchwork is still spreading.

The penalties make the patchwork more than a paperwork problem. Minnesota's law allows civil penalties up to $25,000 per violation and Massachusetts up to $5,000 per violation — figures that multiply fast across a month of listings. Massachusetts Attorney General Andrea Joy Campbell issued a dealer advisory making explicit that advertised prices must include non-optional charges such as document-preparation fees, after complaints that stores were leaving doc fees out of the number up front. And these actions carry real dollars: the New York AG settled with eight Nissan dealerships accused of overcharging more than 1,700 customers through undisclosed "dealership" and "administrative" fees, and a joint FTC–Maryland action against a single Maryland dealer resolved for $75 million.

What a smart store does now

None of this requires a compliance panic. It requires making your advertised numbers defensible. Audit your own inventory feed and third-party listings and confirm the headline price on every VDP and every ad already includes every mandatory dealer fee — doc, prep, electronic filing, any "market adjustment" you actually require. Strip conditional discounts out of the advertised price and disclose them as what they are: offers some buyers qualify for. Make sure your website price and your syndicated price match, because a customer who sees two numbers is exactly the complaint that starts an investigation. And keep dated records of your advertised prices; the dealer who can show what was posted and when is in a very different position than the one reconstructing it later.

There's a competitive angle here too, not just a defensive one. Buyers increasingly shop the total price before they ever call, and platforms like LotPilot surface that all-in number across dealers — so a clean, honest price isn't just lower legal risk, it's what wins the click. The stores that already lead with the real number aren't scrambling after warning letters. They were never the problem, and in a total-price market, that's turning into an advantage.