Revision of the Negative Option Rule, Withdrawal of the CARS Rule, Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions
The FTC is withdrawing the CARS Rule (Combatting Auto Retail Scams Rule) and revising the Negative Option Rule, removing the Non-Compete Rule to conform to federal court decisions. This eliminates the CARS Rule's specific requirements for auto dealers, but the Negative Option Rule changes still apply to subscription and automatic renewal practices.
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 Medium 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: The rule is effective 30 days after publication (around March 14, 2026). Compliance should be in place by then.. 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The CARS Rule is withdrawn, so its specific prohibitions on misrepresentations about price, add-ons, and financing are no longer in effect. However, the Negative Option Rule is revised to require clearer consent and cancellation mechanisms for negative option features (e.g., automatic renewals, continuity plans). The Non-Compete Rule is removed entirely.
Who it affects
Franchise dealers, independent used-car dealers, BHPH dealers, F&I managers
What you must do
Review and update any negative option programs (subscriptions, auto-renewals) to comply with the revised Negative Option Rule. No action needed for CARS Rule compliance as it is withdrawn.
Deadline
The rule is effective 30 days after publication (around March 14, 2026). Compliance should be in place by then.
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