Dustin Alonzo and Helen Mosothoane Analyze New State Auto Sales Regulations Following FTC CARS Rule Nullification

In the latest issue of the Conference on Consumer Finance Law (CCFL) Quarterly Report (Vol. 78, No. 3, 2025), Hinshaw attorneys Dustin Alonzo and Helen Mosothoane analyze the effects of the Fifth Circuit’s notable decision in National Automobile Dealers Association v. FTC.

The court’s ruling voided the Federal Trade Commission’s (FTC) Combating Auto Retail Scams Trade Regulation Rule (CARS Rule) on procedural grounds for failure to issue an advance notice of proposed rulemaking. Our authors explain the court’s reasoning and the CARS Rule’s core provisions regarding misrepresentations, required disclosures, add-on restrictions, and informed consent.

Next, the article reviews the rapid response at the state level, with new state regulations and enforcement targeting alleged bait-and-switch tactics and other Unfair or Deceptive Acts or Practices (UDAPs) in the auto sales and financing industry. Dustin and Helen highlight the following:

• • California’s CARS Act (SB 766), was signed into law on October 6, 2025;
  • New York legislation addressing itemization, spot deliveries, and dealer finance markups;
  • Pennsylvania’s proposed pre-contract “Financial Disclosure” requirements;
  • Massachusetts’ finalized “junk fee” regulations;
  • Existing state advertising and disclosure rules; and
  • Recent FTC and state attorney general enforcement actions that impact dealers and finance companies.

Dustin and Helen conclude their analysis with practical recommendations for industry professionals, including the importance of closely tracking evolving state requirements, reassessing advertising and “offering price” practices, scrutinizing add-on products and disclosures, and aligning recordkeeping and compliance controls to reduce enforcement risk in multi-jurisdiction operations.

Note that Dustin is scheduled to co-present a panel at the Fall Conference of Consumer Finance Law on November 20, 2025, where he will discuss “What is Next After the Demise of the FTC’s CARS Rule.”

• • “States Target Bait-and-Switch Practices and Other UDAPs by Automobile Dealers After Fifth Circuit Sets Aside FTC Cars Rule,” Consumer Finance Law Quarterly Report, Vol. 78, No. 3, 2025