FTC Combating Auto Retail Scams (CARS) Rule
United States · 16 C.F.R. Part 463; 89 Fed. Reg. 590
The FTC rule targets deceptive auto-dealer practices, including AI-powered tools used in financing offers and add-on sales. The rule's compliance date is stayed pending Fifth Circuit litigation, but core deception standards still apply under FTC Act Section 5.
Technical detail
16 C.F.R. Part 463 (Combating Auto Retail Scams Trade Regulation Rule, 89 Fed. Reg. 590). Prohibits misrepresentations in dealer sales including those in algorithmic or AI-assisted financing offers and requires clear written disclosure of price, add-ons, and total payments. Implementation stayed by the Fifth Circuit in NADA v. FTC (No. 24-60013); FTC withdrew the rule in early 2025 for reconsideration.
Who is protected: Consumers buying or leasing motor vehicles, including those targeted by AI-driven sales recommendation engines
Who must comply: Motor vehicle dealers as defined in 15 U.S.C. § 1029
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Status | Proposed / pending |
| Protection strength | Proposed or pending |
| Enacted | 2023-12-12 |
| Citation | 16 C.F.R. Part 463; 89 Fed. Reg. 590 |
| Enforced by | Federal Trade Commission |
| Private right of action | No — agency enforcement only |
| Penalties | FTC Act civil penalties (currently $53,088 per violation) and consumer redress |
| Topics | consumer protection · automated decision-making · AI disclosure and transparency |
| Last verified | 2026-06-17 |
| Official source | Combating Auto Retail Scams Trade Regulation Rule (89 FR 590) ↗ |
More AI rules in United States
- FTC Act Section 5 (unfair/deceptive AI) · In effect
- TAKE IT DOWN Act · In effect
- FCRA (AI in credit & background checks) · In effect
- ECOA / Regulation B (AI credit discrimination) · In effect
- Title VII / ADA (AI hiring) · In effect
- COPPA + 2025 Rule (childrens data) · In effect
Related consumer protection rules elsewhere
- CCPA/CPRA + ADMT Regulations · In effect
- AB 2013 (Training Data Transparency) · In effect
- SB 942 (AI Transparency Act) · Enacted (not yet in effect)
- SB 53 (Frontier AI Safety) · In effect
- Colorado AI Act (repealed) · Repealed / replaced
- SB 26-189 (Colorado ADMT Law) · Enacted (not yet in effect)
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