Appeals Court Throws out FTC’s Car-Buying Rules

A federal agency issued the rules without complying with the law, judges found.

Cars at a dealership in Annapolis, Md., in an undated file image. Jim Watson/AFP via Getty Images

The Federal Trade Commission (FTC) illegally issued the Combating Auto Retail Scams (CARS) Rule without providing advance notice, violating a federal law requiring such notice for new regulations, the U.S. Court of Appeals for the Fifth Circuit ruled on Jan. 27.

The rule was proposed in 2022 and finalized in January 2024 but put on hold pending the legal challenge. The Administrative Procedure Act (APA) requires courts to invalidate agency actions that fail to follow legally required procedures.