NADA Lauds Advancement of Legislation to Stop FTC’s Flawed Vehicle Shopping Rule


WASHINGTON (June 5, 2024)—The National Automobile Dealers Association (NADA) applauds Wednesday’s passage of the Fiscal Year 2025 Financial Services and General Government (FSGG) appropriations bill by the House FSGG Appropriations Subcommittee. 


Included in the funding bill is a provision which would stop the Federal Trade Commission (FTC) from implementing or enforcing the Vehicle Shopping Rule (also known as the “CARS rule”) until Sept. 30, 2025. The onerous Vehicle Shopping Rule, finalized at the end of 2023, would require dealers to provide an extensive series of unnecessary written and oral disclosures when communicating with consumers related to the vehicle sales price, certain credit terms, and voluntary protection products (VPPs). 


According to a new, independent study by the Center for Automotive research (CAR), the FTC’s final Vehicle Shopping Rule will increase costs by $24.1 billion over ten years, which consumers and small business dealers will have to absorb. Overall, the mandates of the rule would add at 60-80 minutes to the car buying process and cost consumers $1.3 billion per year in lost time.


“NADA and the nation’s 16,000 franchised new car dealerships strongly support the Committee’s advancement of this legislation, which will stop the FTC’s disastrous Vehicle Shopping Rule from taking effect,” said NADA President and CEO Mike Stanton. “This flawed rule would upend the sales process for consumers and small businesses, and CAR’s independent analysis, showing the rule would add at least an hour to every vehicle transaction, is just further proof that the FTC got their economic analysis completely wrong.” 


“Either through the courts or Congress, this rule needs to be stopped before it wreaks havoc on consumers and the entire car-buying and car-shopping process,” Stanton added. 


The additional disclosures required under the rule would overwhelm car buyers and small businesses with additional paperwork lengthening the car buying process, while costing small businesses hundreds of millions of dollars in new administrative costs.


In January, NADA and the Texas Automobile Dealers Association (TADA) filed a legal challenge in the U.S. Court of Appeals for the 5th Circuit to stay the July 20, 2024, effective date of the FTC’s Vehicle Shopping Rule. In response to that legal challenge, the FTC issued an order delaying the effective date of the rule pending judicial review of the NADA/TADA petition. However, despite FTC’s postponement, the Vehicle Shopping Rule remains the law, which is why the advancement of this amendment is necessary.

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