FTC CARS Rule (AI auto)
FTC Combating Auto Retail Scams (CARS) Rule
United States · 16 C.F.R. Part 463; 89 Fed. Reg. 590
- Status
- Proposed / pending
- Applies to
- Motor vehicle dealers as defined in 15 U.S.C. § 1029
- Enforced by
- Federal Trade Commission
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.
Who is protected: Consumers buying or leasing motor vehicles, including those targeted by AI-driven sales recommendation engines
Legal 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.
Key facts
| Jurisdiction | United States |
|---|---|
| Level | Federal |
| Enacted | December 12, 2023 |
| Citation | 16 C.F.R. Part 463; 89 Fed. Reg. 590 |
| 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 |
| Agency page | Combating Auto Retail Scams Trade Regulation Rule (89 FR 590) |
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