Negative Option Rule
The FTC's final Negative Option Rule imposes new requirements on auto dealers offering subscription or negative option programs, including add-on products like GAP waivers. Dealers must obtain explicit consent, provide cancellation mechanisms, and disclose terms clearly.
Aforeworn detected this change in the Auto Dealer F&I Compliance space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated High urgency. Franchise dealers, independent used-car dealers, BHPH dealers, F&I managers should confirm how it applies to their specific situation before acting. There is a time constraint attached: Effective 60 days after publication in Federal Register (around January 14, 2025).. Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Auto Dealer F&I Compliance continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
The FTC amended the Negative Option Rule to require clear disclosure of terms, express informed consent, and simple cancellation for any negative option feature (e.g., automatic renewals, continuity plans). This applies to add-on products sold in F&I.
Who it affects
Franchise dealers, independent used-car dealers, BHPH dealers, F&I managers
What you must do
Review all F&I product agreements and sales processes for negative option features; update disclosures and consent procedures to comply with the new rule.
Deadline
Effective 60 days after publication in Federal Register (around January 14, 2025).
Source: https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule
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