The $3 Million Warning: State Enforcement Replaces FTC CARS Rule

While the FTC’s CARS Rule has been shelved , the regulatory threat hasn’t disappeared—it’s shifted to state-level enforcement targeting dealers, with potentially devastating financial consequences. Multiple dealerships now face millions in fines and settlements from state attorneys general while state legislatures pick up where the FTC left off by introducing similar bills. Here’s what’s happening and how to protect your dealership.

State Attorneys General Target Dealers, Settlements in the Millions

State Attorneys General are aggressively targeting practices the shelved CARS Rule would have addressed:

Maryland

In Maryland, a dealership must pay a $3 MILLION SETTLEMENT in addition to customer refunds

The dealership got penalized for :

Charging additional financing fees above advertised prices
Payment packing
Failing to disclose complete pricing information
Not itemizing purchased goods and services

Indiana

Advertising inaccuracies cost dealer $240,000

In Indiana, a dealership charged more than the advertised price for financed vehicles, resulting in over $240,000 in restitution payments to 110 affected consumers.

State Legislatures Accelerate Enforcement with CARS-Like Bills

California and Massachusetts are leading the charge with their own bills that mirror the federal CARS Act.

Massachusetts

New law targets “junk” fees and mandates greater price transparency for consumers

Taking effect September 2, 2025, the law requires that businesses, including dealerships:

Provide clear total pricing, including all mandatory fees, before collecting consumer information
Disclose the nature, purpose, and amount of all fees, including whether charges are optional, with instructions on avoiding these fees
Clearly disclose recurring charges and all financial obligations, including instructions for cancellation
Provide simple subscription cancellation processes

California

California has proposed its own CARS Act with even stricter requirements

California has proposed its own legislation, called the CARS Act , that strongly reflects the FTC CARS Rule. The bill consists of even stricter requirements including:

Prohibiting misrepresentation in vehicle sales
Banning “valueless” add-ons
Mandating clear disclosure of offering price
Implementing a 10-day right to cancel on used vehicle sales
Requiring seven-year record-keeping

Take Immediate Action to Protect Your Dealership

Request KPA’s Dealership Compliance Assessment – Our comprehensive review identifies compliance issues before regulators do
Review your advertising and F&I practices to align with emerging state regulations
Implement proper documentation procedures for all transactions
Train staff immediately on compliance requirements

Don’t Wait for Your Multi-Million Dollar Wake-Up Call

KPA’s Complete Compliance solution helps you:

Ensure transparent pricing and advertising practices
Develop compliant F&I processes
Protect against costly fines and legal complications
Stay ahead of evolving regulations across all states

Learn how we can help your dealership navigate this changing regulatory landscape.

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