Oral arguments were made by NADA and the FTC to the 5th Circuit Court of Appeals in New Orleans on October 9th, 2024. Lawyers have opined NADA made the best arguments for the way the FTC has laid out the CARS rules. The basis of the argument was that the FTC did not follow their own rules allowing enough time for the public to weigh on whether a rule was even necessary.
These same attorneys believe the NADA will win a temporary victory that forces the FTC to delay things further, but the FTC will win in the long run. At this point, you should bet on the CARS rules going into effect and prepare.
Yes, an argument can be made that a new administration will change the leadership of the FTC, but it may take time for any changes to impact the CARS rule.
In our world, the biggest challenge will be the interpretation of online transparency. When a payment is displayed or quoted, all details about that payment must be disclosed. This isn’t just the term and rate; it is all the fees (don’t forget those acquisition fees) and the total amount financed. The only thing that does not have to be disclosed are any state fees and taxes.
Seeing that total amount financed during the research phase will be a shocker for some car shoppers!
The other side of the coin is how this new transparency is shown on websites. It can’t be in a disclaimer at the bottom of a VLP or VDP. It has to be clearly defined next to the payment. If your website is not showing the rate, term, and total amount financed right next to the payment, you need to get to work on making a change. There is still debate on whether hovering over something is enough. We have yet to hear from any consultants who believe a hover over is enough because hover overs do not show the extra details clearly in line with the payment. Unfortunately, many prominent website providers seem to be favoring the hover over path.
As the CARS rules have not landed yet, it is smart to get into the practice of being more transparent with your customers now. Customers will appreciate it! Start small by working on the technical end of showing payments on your website that include the components the CARS rule calls for. And begin to nurture talk-tracks for your people to follow when discussing payments with a customer.
If you can show you began working to comply with the CARS rule before it went into effect, you may earn yourself a goodwill card in the event your store is facing a charge from the FTC.
Don’t know where to start? FRIKINtech is FTC CARS rule ready and here to help keep you compliant. Visit www.frikintech.com/solutions/websiteiq/ or give us a call at 833-374-5468.
