In the wake of the U.S. Appeals Court’s decision to overturn the FTC’s CARS rule, auto dealers may have avoided a major regulatory burden—but the fight isn’t over yet. According to Shannon Robertson, Executive Director of the Association of Finance & Insurance Professionals (AFIP), the ruling may prompt state-level action, leading to a patchwork of regulations that could be even more complex for dealers to navigate. In today’s episode of CBT Now, Robertson shared his insights on what this ruling means for compliance, consumer transparency, and the future of auto sales regulations.
The U.S. Appeals Court’s decision to vacate the FTC’s CARS rule was unexpected, even for industry leaders preparing for its implementation. Robertson expressed his surprise at the ruling, noting that he had been discussing the next steps with NADA just a day before the announcement, assuming the rule would be upheld. While the decision is a victory for dealers, Robertson warns that the regulatory landscape remains uncertain.
One of the primary concerns had been the CARS rule’s extensive disclosure requirements, which could have increased paperwork, burdening both dealers and consumers. While the rule aimed to improve transparency, Robertson argues that its real-world application could have led to more confusion. Despite its overturn, the issue of transparency remains central, and dealers must remain vigilant against unfair and deceptive acts and practices (UDAP) violations. The FTC has already penalized five dealerships in the past six months under UDAP laws, highlighting that compliance obligations remain in place.
Looking ahead, Robertson cautions that individual states may now step in to introduce their own versions of the CARS rule, potentially leading to a complex regulatory environment. “I think I would rather five new rules by the FTC than 26 different state interpretations of the CARS rule,” he noted. Additionally, the FTC’s recent junk fee rule, which originally exempted auto dealers, could inspire states to enact their own versions targeting the automotive sector.
For 2025, AFIP is focusing on helping dealers navigate ongoing regulatory enforcement. By analyzing recent FTC fines, Robertson’s team aims to educate dealers on compliance risks and best practices for maintaining transparency in their operations. As the industry braces for potential state-level regulations, staying proactive will be key to avoiding legal challenges.
“I think I would rather have five new rules by the FTC than 26 different state interpretations of the CARS rule” – Shannon Robertson.
