The Federal Trade Commission’s (FTC) Combatting Auto Retail Scams policy, better known as the CARS rule, aims to make the car buying process more transparent. However, many dealers say the commission’s new guidelines are too strict, create confusion for customers, and punish businesses that did nothing wrong.
On this episode of Driving Solutions, host Jim Fitzpatrick is joined by Rusty West of Market Scan, an automotive payments platform recently acquired by S&P Global. An automotive veteran himself, West elaborates on what the CARS rule asks of dealers and how they can prepare their businesses for when the law goes into effect on July 30.
Key Takeaways
1. West believes the CARS rule is a product of friction between consumers and dealers. Inadequate vehicle supply during the COVID pandemic led many car buyers to feel frustrated with their retailers, making it inevitable that the FTC would receive complaints and take action.
2. Whether the CARS rule was justified or not, dealers will need to prepare for higher standards and increased oversight. “They don’t have the luxury of making mistakes,” remarks West.
3. The right technology partners and consultants can help dealers polish their sales processes to avoid compliance issues. Thorough training will also be crucial in the months ahead to ensure employees do not accidentally violate the CARS rule.
4. West urges the entire industry to work together to develop a solution to the compliance challenges created by the CARS rule. That includes manufacturers, digital retail vendors, and, of course, dealers.
5. Thankfully, most dealers are already responding to the FTC’s ruling, as are dealer associations including the NADA.
To learn more about how Market Scan’s automotive payment platform can help dealers provide best-in-class service for their customers, visit their website or stop by booth #3131W at the upcoming 2024 NADA Show.
"I think [the CARS rule] impacts the entire journey, from point of first contact through delivery of the vehicle."
