What’s new: On Jan. 27, 2025, in a 2-1 vote, the U.S. Circuit Court of Appeals for the Fifth Circuit granted a petition filed by NADA and the Texas Automobile Dealers Association (TADA) to vacate the FTC Vehicle Shopping Rule (“CARS” Rule) for violating the FTC’s own procedural requirements for issuing trade regulation rules. More specifically, the court held that the FTC skipped an essential step to inform the rulemaking process requiring it to begin with an Advanced Notice of Proposed Rulemaking. As a consequence, the FTC Vehicle Shopping Rule has no force or effect. 

Why it matters: This decision by the 5th Circuit Court of Appeals on NADA’s and TADA’s legal challenge is a victory for the rule of law and a great outcome for consumers. As we have been saying since this rushed, poorly researched and unnecessary rule was announced, the FTC’s Vehicle Shopping Rule would have added massive amounts of time, complexity, paperwork and cost to the car-buying and car-shopping experience for virtually every customer. That truly would have been a nightmare for consumers and dealers alike. Thanks to the success of this legal challenge, dealers can get back to what they do best, which is creating the best-possible customer experience and reducing transaction times wherever possible.

What you should do: NADA reminds dealers that many provisions that were in the Vehicle Shopping rule have been subject to FTC enforcement under Section 5, and dealers should continue to ensure compliance with all existing rules related to advertising, sales and financing. 

What’s next: NADA will continue to fight for dealer interests at the FTC and all federal agencies, as well as on the Hill and in the courts whenever necessary.