Price Transparency: Here’s What You Need to Know for CARS Rule Compliance
The FTC’s newly announced Combatting Auto Retail Scams Rule (or CARS Rule for short) has been a hot topic for dealers since it was announced in December. The CARS Rule will have a profound impact on dealership advertising, sales, and financing strategies prior to its effective date of July 30, 2024. KPA’s putting together a series of articles to help dealers educate themselves on the do’s and don’t of CARS Rule compliance. And today we’ll be diving into one of the key topics in CARS Rule: Price Transparency.
We’ve been following the CARS Rule closely since it was first proposed. Here’s what you need to know.
What the FTC says about Price Transparency
According to the FTC, “The CARS Rule requires dealers to clearly disclose the offering price – the actual price anyone can pay to get the car, excluding only required government charges. Before they visit the dealership and throughout the transaction, consumers have the right to know the drive-off-the-lot price. If a dealer mentions optional add-ons, the dealer has to tell the consumer they can say no. And if discussing a monthly payment, the dealer has to tell the consumer the total payment.“
All vehicles must have a properly disclosed Offering Price
The offering price is the full cash price that a dealership will sell or finance the vehicle to a consumer, less any mandatory government fees (such as tax, title, and registration fees).
- Any fees that the dealership is requiring to be charged, but are not mandatory, such as a state permitted documentary fee, must be included in the Offering Price.
- The Offering Price must be disclosed in any advertisement or communication about a specific vehicle, or about the monetary amount or financing term for any vehicle. Among other things, websites can no longer list a vehicle and state, “Call for Pricing.”
- The Offering Price must be disclosed in the first response regarding a specific vehicle (this includes when communicating with a customer in person, on the phone, in an email, etc.).
- If the initial communication with the customer is in writing, the Offering Price disclosure must be in writing.
Offering Price disclosures must be clear, conspicuous, and unavoidable
- If visual, the Offering Price must stand out from any accompanying text or other visual elements and cannot be missed.
- If audible, the Offering Price must be delivered in a volume, speed, and rhythm that is adequate for ordinary consumers to easily hear and understand it.
Stay on the Right Side of the CARS Rule with Help from KPA
KPA has been working on its CARS Rule Solution ever since the proposed rule was first announced, and is the ONLY solution offering:
- Professional and automated website scans to help find and remediate violations of CARS, TILA, Reg M, Reg Z, and more, before vehicle delivery
- Remote and onsite deal jacket auditing
- Employee CARS Rule training, along with other advertising, sales, and F&I trainings
- Employee Assessments
- CARS Policies
- Consumer Complaint Management System
- Electronic archive for sales and marketing materials
We’ve been providing advertising, sales, and F&I solutions for over a decade, and KPA’s CARS Solution will help you navigate and comply with CARS well before July 30, 2024.
