In December 2023, the Federal Trade Commission finalized a rule projected to save car buyers $3.4 billion a year and 72 million collective hours by banning the bait-and-switch pricing and junk-fee tactics common at dealerships. It was called the CARS Rule. It never actually took effect nationwide: dealer trade groups sued, a federal appeals court sided with them, and as of February 2026 the FTC has formally pulled the rule off the books.

What the Rule Was Supposed to Fix

The CARS Rule targeted bait-and-switch advertising, hidden junk fees, and unauthorized add-ons. Then-FTC Chair Lina Khan: “when Americans set out to buy a car, they’re routinely hit with unexpected and unnecessary fees that dealers extract just because they can.”

How It Got Struck Down

Dealer associations challenged the rule in the Fifth Circuit Court of Appeals, which vacated it in January 2025, finding the FTC had violated its own procedural rules by skipping a required advance notice step. It wasn’t a ruling on the merits of junk fees being fine — it was a procedural technicality. In February 2026, the FTC formally withdrew the rule to comply with the court’s order.

What Protection Actually Still Exists

The underlying conduct the rule targeted is still illegal under Section 5 of the FTC Act, which prohibits unfair and deceptive acts in commerce. Regulators secured a $78 million settlement against a Maryland dealer group over hidden fees just months before the CARS Rule was formally withdrawn.

What You Can Do About It Right Now

Ask for the full out-the-door price, including every fee, before you discuss financing or trade-in value. If a salesperson won’t give you that number in writing, that’s the tell.