How Car Dealership Customer Service Is Transforming: New Rules, New Buyers, New Skills
TL;DR. The CARS Rule is the FTC’s 2023 regulation requiring dealers to disclose true prices, stop bait-and-switch tactics, and get express consent before charging fees 1. A 2025 court ruling vacated it pending a procedural redo 2, but the behavioral shift it codified hasn’t reversed. Buyers now research extensively online before ever reaching the lot 3. Dealerships that still rely on reps typing notes into a CRM when convenient are the ones left exposed — whether the regulator comes back or not.
What Is the FTC CARS Rule and Why Does It Matter to Your Dealership?
The FTC CARS Rule — formally the Combating Auto Retail Scams Rule — is a federal regulation finalized on December 12, 2023, that bans bait-and-switch advertising and hidden junk fees in vehicle sales, financing, and leasing. 1 It requires dealers to disclose the real, payable offering price. They must also tell buyers that add-ons like extended warranties are optional, and obtain express consent before charging for anything. 1
This is not a minor compliance footnote. The rule applies to an estimated 47,271 franchise, new, and independent used-vehicle dealers nationwide, and each one now carries new recordkeeping obligations. 4 The FTC projects it will save consumers more than $3.4 billion and 72 million hours a year — numbers that signal how much friction and distrust the agency believes is baked into typical dealership processes today. 1
As FTC Chair Lina Khan put it: "When Americans set out to buy a car, they’re routinely hit with unexpected and unnecessary fees that dealers extract just because they can." 1
For a dealership, the stakes are structural, not cosmetic. Violations expose a dealer to FTC injunctive and restitution actions, civil penalties, and separate state attorney general enforcement under unfair-practices laws. That’s layered legal exposure, stacked on top of the reputational cost of a customer who feels misled. 4 This is a systems problem, not a training problem. It points straight at how pricing, consent, and disclosure get captured and audited across every deal, every rep, every day.
Learn more in our complete guide: What is a Sales Operating System: the loop that transforms results.
Related reading: car dealership sales promotions.
What Response Deadlines and Standards Must Dealerships Meet?
The CARS Rule doesn’t hand dealerships a literal stopwatch, but it creates the practical equivalent: whatever channel a shopper uses — a phone call, a text, a live chat, a dealership Instagram DM — must deliver the same accurate price, financing, and add-on information. The dealer must also be able to prove it did.
The rule requires the offering price to appear in nearly every advertisement or communication that references a specific vehicle, price, or financing term, regardless of the medium used to reach the customer 5. It also requires dealers to obtain a consumer’s express, informed consent before charging for anything — the vehicle, financing fees, or any add-on. That means consent has to be captured and traceable no matter where the conversation happened 1.
Documentation isn’t optional. Dealers must keep records for 24 months covering every sale, finance, or lease transaction, every materially different advertisement, and every marketing claim about price or financing terms 5. The FTC estimates this recordkeeping burden touches roughly 47,271 franchise, new, and independent/used dealers nationwide S34.
For a sales floor still routing leads through sticky notes and group chats, that’s the real exposure: a channel nobody logged becomes a channel nobody can defend in an audit.
Why Are Informed Consumers Reducing In-Person Dealership Visits?
Consumers are not simply browsing less — they are front-loading the research phase online, long before they set foot on a lot. By the time they arrive, they are not discovering a vehicle; they are confirming one. According to Forrester research cited in a 2024 industry study, 90% of car buyers conduct extensive research before visiting a dealership. A quarter of new-vehicle buyers now go further and use AI tools like ChatGPT or Google’s AI overviews to vet vehicles and dealerships before showing up, per a 2025 Kerrigan Advisors survey6.
That shift changes what the showroom visit is for. It’s no longer a discovery meeting — it’s a negotiation and confirmation session. Buyers already know the trim, the price range, and the competitor’s offer.
This is why pitch-and-close scripts fail with today’s buyer, and why reps need consultative skills instead: the job has moved from informing to advising. A rep trained only on product talking points has nothing left to add once the customer already knows the spec sheet. That gap shows up directly in conversion rates and in how fast new hires ramp up.
Closing it isn’t a training poster problem — it’s a system problem. That’s exactly where Play2sell SalesOS’s RolePlay module comes in: AI-guided practice built on real sales conversations, not static slides, so reps rehearse consultative selling before they ever face a pre-educated buyer.
How Is EV Technology and Vehicle Complexity Reshaping Dealership Training Needs?
EV adoption is forcing dealerships to rebuild technical training from the ground up. Battery management systems, high-voltage drivetrains, and software-defined features have no analog in a combustion-engine curriculum. Staff who learned on legacy vehicles can’t simply extend that knowledge to an EV — the underlying systems are different. The required equipment and training investment alone can run from $10,000 to $100,000 depending on scope.7
The selling conversation has changed too. Buyers walk in asking about charging infrastructure, total cost of ownership, and warranty coverage, not horsepower and oil-change intervals. Cox Automotive research found EV consideration has climbed to 51%, up from 38% in 2021. Yet most dealerships still lack training on presenting ownership benefits or answering lifestyle questions, which means a team can talk charging procedure but freeze on the harder, consultative question.8 Left unaddressed, that gap pushes staff back toward what they already know, nudging undecided customers toward gas vehicles instead.8
Classroom modules and static LMS courses don’t fix this, because the failure point isn’t knowledge recall — it’s improvisation under pressure, in front of a skeptical customer. Nearly all potential EV buyers now arrive at the dealership already having researched the vehicle heavily, which means staff face harder questions on day one, not after months of ramp-up.8 That’s a rehearsal problem, not a content problem. And it’s exactly where scenario-based practice — guided by AI, built from real objections your team actually hears — closes the gap faster than another slide deck ever will.
How Does the Shift to the Agency Model Change the Customer Relationship?
The agency model shifts who controls the price — and who owns the relationship once the sale is done. Under the traditional franchise model, the dealership buys inventory from the manufacturer and sets its own price. Under the agency model, the manufacturer sets a fixed price nationally, and the dealer earns a commission or handling fee for facilitating the transaction and delivering the car9.
| Dimension | Franchise model | Agency model |
|---|---|---|
| Inventory ownership | Dealer | Manufacturer9 |
| Price-setting | Dealer negotiates | OEM sets fixed price10 |
| Dealer role | Salesperson | Agent / intermediary11 |
| Revenue driver | Transaction volume | Service, retention, commission12 |
This isn’t cosmetic. Consulting estimates cited in industry analysis suggest the agency transition can recover up to 8% of retail price inefficiencies for OEMs by eliminating discounting and consumer-facing incentives10. For the dealer, that same margin compression on the sale leaves one lever for profitability: the after-delivery relationship — service, trust, repeat business13.
For American buyers, the upside is less haggling and more consistent pricing across dealers of the same brand11. But it also means the dealership’s real job shifts from closing the deal to earning the customer’s loyalty long after the keys change hands — a shift no spreadsheet-based commission system was built to track.
What Are the Three Pillars of Successful Dealership Adaptation?
Successful dealership adaptation rests on three non-negotiable pillars: staff training, integrated technology infrastructure, and after-sales investment. Dealerships that treat these as optional line items instead of operational foundations are the ones still scrambling when compliance deadlines and margin pressure hit at once.
Training can’t be a one-time classroom event anymore. Staff need continuous, scenario-based practice to master EV and technology knowledge. Dealers who invest here avoid pushing customers toward familiar gas vehicles out of habit rather than fit — a real risk when EV consideration has climbed to 51%, up from 38% in 2021 8. One-off seminars don’t build that muscle. Repeated, guided practice does.
Technology infrastructure has to connect lead routing, multichannel response, and status updates into one system — not a patchwork of disconnected tools. Dealers who integrated digital retail tools throughout the sales journey saw average unit sales per salesperson rise from 10.8 to 16 units, according to a 2023 CDK Global and NADA Academy study 14.
After-sales investment is no longer a secondary revenue line. Deloitte’s research frames it as the most stable pillar of dealership profitability: recurring revenue, stronger margins, and long-term retention originate after delivery, not before it 15.
| Pillar | What fails | What works |
|---|---|---|
| Training | Ad-hoc classroom sessions | Continuous, scenario-based practice |
| Technology | Siloed tools | Integrated routing and response systems |
| After-sales | Treated as afterthought | Reinvested as core profit center |
These three pillars aren’t separate initiatives — they’re one operating system. A dealership’s training gaps show up as inconsistent customer data, which is exactly the kind of gap Play2sell SalesOS’s RolePlay module closes: AI-guided practice replacing static training that reps never finish, built on real sales context instead of a slide deck.
What Consumer Rights and Complaint Channels Exist Under the New Regulations?
If a dealer misses a disclosure deadline, refuses service, or hides a fee, consumers have three places to turn: the FTC, their state attorney general or consumer protection agency, and — for safety defects — the National Highway Traffic Safety Administration16. Complaints about auto loans or payments go to the Consumer Financial Protection Bureau instead16.
Under the CARS Rule, dealers cannot charge consumers for basic service. Answering a warranty question or scheduling routine maintenance is not a billable "add-on"1. The rule also requires express, informed consent before charging for anything tied to the sale. Remedies for violations include restitution and civil penalties, which the FTC can pursue through injunctive and equitable relief4.
The rule itself doesn’t create a private right of action, but a dealer’s exposure doesn’t stop at the FTC — violations can also trigger state attorney general action under state unfair-practices laws17. For a dealership, that means complaint-handling can’t stay informal. Escalation paths, documented consent, and audit-ready records aren’t paperwork for its own sake. They’re what keeps a routine customer complaint from becoming a six-figure enforcement matter.
That same discipline — traceable actions, no ambiguity about what was approved and when — is exactly what Play2sell SalesOS’s Pay module brings to commission governance, so disputes get resolved by record, not by argument.
What Is the Implementation Timeline and What Deadlines Matter Most?
The CARS Rule’s compliance clock is more complicated than a single deadline, and dealerships that assume it’s settled law are exposed. The FTC finalized the rule on December 12, 2023, and set it to take effect July 30, 2024, with new disclosure, consent, and recordkeeping obligations for roughly 47,271 covered dealers4. Then, on January 27, 2025, the Fifth Circuit vacated the rule entirely, ruling that the FTC had skipped required rulemaking procedures. The rule cannot take effect unless the agency restarts the process2.
That doesn’t mean exposure disappeared. California’s own CARS Act remains in force independently18, and state attorneys general retain UDAP enforcement authority regardless of the federal rule’s status17. Audit your disclosure, consent, and documentation processes now — the compliance bar is reappearing state by state, not vanishing.
FAQ: Common Questions About Dealership Service Compliance and Customer Expectations
Dealership leaders asking these questions share one thing in common: they’re trying to manage compliance and customer expectations with manual processes that can’t scale. Here are direct answers to the four questions that come up most.
If my dealership misses a CARS Rule deadline, what happens?
The FTC enforces the CARS Rule under Section 5 of the FTC Act, which authorizes injunctive relief, restitution, and civil money penalties. There’s no private right of action, but state attorneys general can pursue parallel claims under state UDAP laws 4. Repeat or willful violations escalate from warning letters to formal enforcement actions, and the FTC had already brought more than 50 motor-vehicle enforcement actions in the decade before the rule even existed 17.
Do I need to hire additional staff to meet 24/7 response requirements?
Not necessarily. Dealers are already turning to AI-driven routing and automated engagement to handle this — 90% of dealerships surveyed in 2025 said they were using or planning to use AI in operations 6. That shift lets a fixed-size team cover multichannel response without growing headcount proportionally.
How do I train my sales team to work with pre-educated buyers?
Today’s buyers arrive having already researched extensively: 90% of car buyers do substantial research before ever visiting a dealership 19. Scenario-based, AI-guided practice builds the consultative skills reps need to meet that buyer where they are, faster than classroom-style onboarding gets them there. The goal isn’t a rep who can recite the window sticker — it’s one who can go deeper than it.
Is the agency model mandatory?
No. Adoption varies by manufacturer and market. Toyota has piloted it in New Zealand, BMW in South Africa, and Volkswagen plans to roll it out in Germany, while Kia UK has instead recommitted to the traditional franchise model 11. Regardless of which path your OEM takes, the structural trend points toward thinner transaction margins and heavier reliance on service revenue. That’s why the operational question isn’t whether to adapt, but how fast.
Start Your Dealership’s Compliance and Growth Strategy Today
Compliance with the CARS Rule and sustainable revenue growth come down to the same operational weakness: can your dealership respond to and train for every customer inquiry fast enough? The rule has been in litigation since the Fifth Circuit vacated it in January 2025, following its 2023 finalization. Even so, it still signals where enforcement attention is headed — misrepresentation, disclosure, and consent failures2. Fixing that exposure, and turning it into a growth advantage, requires two capabilities most dealerships lack: intelligent lead routing and fast, practical sales training.
Play2sell SalesOS operates above your existing CRM. It captures customer inquiries across every channel — phone, web, in-person — and routes them to the right salesperson based on real performance and availability. No lead sits unanswered while a buyer researches a competitor instead3. RolePlay, our AI-guided training module, runs reps through real-world scenarios that reflect modern buyer research habits. Reps get up to speed in days rather than months, so your team is ready before your next compliance deadline3.
Your next step: Audit current response times and channel coverage against disclosure requirements, then separate what training can fix from what needs process redesign. Play2sell’s operational specialists offer a 30-minute assessment to pinpoint your biggest compliance risk and fastest path forward.
Frequently Asked Questions
## Sources- FTC Announces CARS Rule to Fight Scams in Vehicle Shopping — https://www.ftc.gov/news-events/news/press-releases/2023/12/ftc-announces-cars-rule-fight-scams-vehicle-shopping ↩
- FTC CARS Rule Vacated: What Dealers Need to Know in 2026 — https://kgidealersolutions.com/resources/ftc-cars-rules-2025 ↩
- 5-step guide to modernizing the buyer’s journey — https://www.cbtnews.com/5-step-guide-to-modernizing-the-buyers-journey ↩
- FTC issues final CARS Rule setting new requirements on vehicle sales — https://www.consumerfinancemonitor.com/2023/12/20/ftc-issues-final-cars-rule-setting-new-requirements-on-vehicle-sales ↩
- Consumer Protection/FTC Advisory: FTC Finalizes CARS Rule Imposing Substantial Regulatory Requirements on Auto Dealerships — https://www.alston.com/en/insights/publications/2023/12/ftc-cars-rule-imposing-regulatory-requirements ↩
- 7 Ways Technology Helps Auto Dealerships Succeed | NADA — https://www.nada.org/nada/nada-headlines/7-ways-technology-helps-auto-dealerships-succeed ↩
- Zero-emission Vehicles and Retail Innovation in the U.S. — https://itspubs.ucdavis.edu/download_pdf.php?id=2865 ↩
- Empowering EV Programs Through Dealership Engagement — https://maritz.com/resources/ev-programs-dealerships ↩
- https://hicronsoftware.com/blog/evaluating-agency-model-automotive-market-insights — https://hicronsoftware.com/blog/evaluating-agency-model-automotive-market-insights ↩
- https://www.cbtnews.com/how-an-auto-retailing-agency-model-could-impact-your-car-dealership — https://www.cbtnews.com/how-an-auto-retailing-agency-model-could-impact-your-car-dealership ↩
- https://www.cbtnews.com/agency-model-ushers-a-new-era-oems-flirt-with-direct-sales-dealers-respond — https://www.cbtnews.com/agency-model-ushers-a-new-era-oems-flirt-with-direct-sales-dealers-respond ↩
- https://modera.com/automotive/what-is-the-automotive-agency-model-and-how-can-this-help-your-dealership — https://modera.com/automotive/what-is-the-automotive-agency-model-and-how-can-this-help-your-dealership ↩
- https://www.linkedin.com/top-content/retail-merchandising/retail-industry-success-factors/key-factors-for-dealer-success-by-2030 — https://www.linkedin.com/top-content/retail-merchandising/retail-industry-success-factors/key-factors-for-dealer-success-by-2030 ↩
- https://www.visionmgroup.com/post/the-great-auto-dealership-transformation-why-some-dealers-are-thriving-while-others-struggling — https://www.visionmgroup.com/post/the-great-auto-dealership-transformation-why-some-dealers-are-thriving-while-others-struggling ↩
- The Great Auto Dealership Transformation — https://www.visionmgroup.com/post/the-great-auto-dealership-transformation-why-some-dealers-are-thriving-while-others-struggle ↩
- https://www.usa.gov/car-complaints — https://www.usa.gov/car-complaints ↩
- https://www.regulations.gov/document/FTC-2022-0046-0001 — https://www.regulations.gov/document/FTC-2022-0046-0001 ↩
- https://www.carconsumers.org/ — https://www.carconsumers.org/ ↩
- Insights – Dealerships Still Drive the Car Buying Experience in the Digital Age — https://www.weareprogressive.com/insights/dealerships-still-drive-the-car-buying-experience-in-the-digital-age ↩