The CARS rule’s approach by the FTC was announced on December 12th, 2023. You can read the FTC’s announcement of the CARS rule here.
According to the FTC, the main areas they are concerned with are, as cited directly from the FTC:
- No Misrepresentations: The rule prohibits misrepresentations about key information, like price and cost.
- Offering Price, Total Payment, and Add-Ons Optional: Dealers have to provide the offering price—the actual price any consumer can pay for the vehicle; tell consumers that optional add-ons (like extended warranties) are not required; and give information about the total payment when discussing monthly payments.
- No Bogus Add-Ons: The rule prohibits dealers from charging for any add-on that does not provide a benefit to consumers. Examples of such add-ons include: warranty programs that duplicate a manufacturer’s warranty, service contracts for oil changes on an electric vehicle, GAP agreements that do not actually cover the car or neighborhood in which it is housed, or other parts of the deal, and software or audio subscription services on a vehicle that cannot support the software or subscription.
FRIKINtech’s full line of products makes it very easy to adhere to these new rules on your dealership website, in your advertising, in your equity mining, and when making sales offers to service customers.
You can choose what level of pricing to show a customer based on whether you know who they are on your website. The same goes for the details of loan and lease payments. You can remain consistent with your OEM’s MAP pricing standards and what the FTC is now asking for while giving the customer a reason to submit a lead.
Our founders were successful car dealers who know you can’t put every dealership into the same bucket – dealers need customization! These options are here to adjust to your processes.
This includes how your F&I products are displayed. You can choose if they’re part of every price and payment scenario or a customer’s choice.
When a customer sees their F&I product options, we also calculate how much original warranty they’re going to have based on the payment term they’ve selected.
And when it comes to all the details the customer can see, there are few tools as transparent as ours!
They see the lease, loan, and cash terms side by side with how much each financial option they can control changes their payment. At any time, they can view the summation of what makes that number up, which may be overkill for what the FTC is after.
It even details the exact lender program! Does an F&I disclosure do that?
With any new policy, time and lawsuits will dictate the final definition. We cannot say this is exactly what the FTC wants. Everyone’s mileage may vary for a few years. We would all be wise to anticipate better clarification in time, so FRIKINtech cannot take full responsibility for how the FTC will view dealership websites, advertising, etc. that FRIKINtech is involved in. What we can say is we plan to adhere to their rules and guidelines with our clients.
