Ford Dealers Will Have To Comply With New FTC Rule In 2024

Back in June 2022, the Federal Trade Commission (FTC) proposed a rule that would ban dealers from imposing junk fees on customers along with bait-and-switch tactics throughout the car-buying process. The FTC says that this ruling would “eliminate the tricks and traps that make it hard or impossible to comparison shop” or “leave consumers saddled with thousands of dollars in unwanted junk charges.” Then, in August, the FTC said that it would not be extending the public comment deadline for this junk fee ruling, even after multiple automotive dealer associations asked for an extension, though it later reversed course and decided to extend the ruling, after all. Now, the rule has been finalized, setting new standards for Ford dealers and those that sell other brands moving forward.

Officially known as the Combating Auto Retail Scams (CARS) Rule, the FTC estimates that this new requirement will save U.S. consumers more than $3.4 billion and an estimated 72 million hours each year shopping for vehicles. It will reportedly do that by barring dealers from using bait-and-switch claims to lure vehicle buyers to the lot, including 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 addresses hidden junk fees, or charges that are often buried in contracts that consumers never agreed to pay, and in some cases, are for services or products that provide no benefit to consumers.

The CARS rule prohibits misrepresentations about key information like the price and cost of a vehicle, and stipulates that dealers must provide the actual price of the vehicle and any additional add-ons that aren’t required. It also bars dealers from charging customers for add-ons that don’t provide a benefit – such as duplicate warranties, oil change service contracts for EVs, GAP agreements that don’t cover the vehicle being sold, and software or audio subscription services on a vehicle that cannot support the software or subscription. Finally, the rule requires dealers to get a consumer’s informed consent for any charges that they pay as part of a vehicle purchase. The CARS Rule will take effect on July 30^th, 2024.

Ford dealers – along with those that sell vehicles of all sorts of makes and models – have come under fire in recent years over some unscrupulous practices such as charging customers excessive lease buyout fees, circumventing the reservation process for in-demand vehicles, and slapping large markups on all sorts of vehicles, which is precisely why this rule was created in the first place.

We’ll have more on this new rule soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.