California Dreamin' of October 1: The CARS Act Comes to California

For today, as I mentioned, we'll be discussing the California CARS rule, what it means for dealers and auto finance companies in California and beyond.

And Chris, it's been a minute since we've talked about the CARS rule, but there's a significant FTC backstory going on here.

The story has been ongoing for four years at this point, I think.

So tell us a little bit about how we got here.

How did this start at the federal level, and how did it wind up in California?

Let's take it back...

No, I'm, I'm kidding.

You're right.

It's been about four years, and obviously the FTC CARS rule, big industry response to the CARS rule, not only in what it imposed related to total price advertising, misrepresentations, but also the record retention requirements.

Just big deal, right? Obviously, industry groups challenged the rule in the Fifth Circuit.

Fast-forward a couple years from there, and the rule was overturned.

Industry wins on procedural grounds, to be clear, but still overturned.

Industry rejoices.

We have no FTC CARS rule.

And much like anything these days where some kind of federal provision gets struck down, there's the be-careful-what-you-wish-for aspect to it because you never know when the states could step in.

And lo and behold, here comes California with the CARS Act.

[laughs] You know, I mean, obviously there's some connection.

I don't know how you would independently come up with the CARS acronym completely separately from one another, and it requires a lot of the same type of stuff.

It looks like the FTC CARS rule.

And here we are now in twenty twenty-six.

In a couple weeks, this thing is gonna go into effect.

It goes into effect October first.

From our perspective, last year we talked about how many different iterations this bill went through, and we kind of [laughs] went through a play-by-play of what's in, what's out, what's getting cut, what is subject to industry comment, you know, all these different types of things about where the bill has been.

And then we kinda did a quick summary of it in one of our state law roundups, but we thought, "Breaking news time, it's about to be in effect," and we should really talk about what does it do just to give everybody a reminder if you're not already working on it, which, you know, if you're directly subject to the California CARS Act, I've got some bad news.

You probably should have already been thinking about it.