If you've noticed more talk lately about "junk fees" and car pricing, there's a reason. The Federal Trade Commission (FTC) has spent the past couple of years pushing the auto industry toward one simple idea: the price a dealer advertises should be the price you actually pay. Here's what the FTC is, what it's been doing, and what it means for you the next time you shop for a car.
What the FTC has to do with the price of your next car
- First, what is the FTC?
- The short version of what happened
- What the FTC says an advertised price should include
- What this actually means for you
- A fair word about dealers
- How to protect yourself as a shopper
- FAQ
First, what is the FTC?
The Federal Trade Commission is the federal agency responsible for protecting consumers and promoting fair competition. Among other things, it goes after businesses that use unfair or deceptive practices, which is where cars come in. Deceptive pricing, like advertising one number and charging another, falls squarely under its authority through Section 5 of the FTC Act, a consumer protection law that's been on the books since 1914.
The short version of what happened
A few years ago, the FTC wrote a rule aimed specifically at car dealers, called the Combating Auto Retail Scams Rule, or CARS Rule. It would have required dealers to advertise the real price of a vehicle and banned charging for add-ons that don't benefit the buyer.
That rule never took effect. A federal appeals court threw it out in January 2025 on procedural grounds, meaning the court objected to how the FTC created the rule, not to the idea behind it. The FTC formally removed it from the books in early 2026.
So there is no federal rule today that bans surprise car fees by name. But that doesn't mean anything goes. The FTC has kept enforcing the older, broader law against deceptive practices, and it hasn't slowed down. In March 2026, it sent warning letters to 97 dealership groups across the country, covering hundreds of locations, telling them plainly that an advertised price has to reflect every mandatory fee a customer will pay.
What the FTC says an advertised price should include
The FTC's position is straightforward: the most prominent price you see in an ad should include every charge you can't decline. In practice, that means charges like documentation fees, processing fees, dealer prep, and electronic filing fees belong in the advertised number, not added at signing.
The only things the FTC allows dealers to leave out of that headline price are government charges: sales tax, title, and registration paid to your state or DMV. Everything the dealer controls is supposed to be baked in, and this applies in all 50 states, regardless of what individual state laws say about which fees a dealer can charge.
What this actually means for you
Here's where the confusion might come in. Because the specific auto rule was struck down, no federal regulation is forcing transparency on your behalf at the moment. What you have instead is growing state-level laws and more active federal enforcement of the broader FTC Act’s rules against deceptive pricing. Online marketplaces, notably CarGurus, are also moving toward clearer pricing. States are filling the gap too. Massachusetts already requires dealers to advertise a price that includes mandatory fees, and California's own version takes effect in October 2026.
The practical takeaway: pricing is getting more transparent, but you still benefit from shopping like it isn't guaranteed. The single most useful habit is to focus on the total price you'll actually pay to drive the car away, including all mandatory dealer fees, rather than the monthly payment or the eye-catching number in the ad. Monthly payments are easy to stretch and disguise. A total price in writing is much harder to fudge.
A fair word about dealers
It's worth remembering that a warning letter isn't a guilty verdict; it's a notice about practices the FTC is watching, not a finding of wrongdoing. Plenty of dealers were already pricing honestly long before any of this, and documentation and processing fees are a legitimate, long-standing part of how dealerships operate. What the FTC is targeting isn't the existence of fees, it's the practice of hiding them until the paperwork comes out. Most of the industry is moving in the same direction, and a lot of dealers welcome a level playing field where everyone advertises the same way.
How to protect yourself as a shopper
A few simple moves put you in control:
- Ask for the total price in writing, including every mandatory fee, before you visit. A dealer who won't put numbers in writing is telling you something.
- Compare that total across dealers, not the advertised sticker or the monthly payment.
- Question any add-on you didn't ask for. Things like paint sealant, VIN etching, or "protection packages" are often optional, even when they're presented as standard.
- Use tools that surface fees upfront. Marketplaces are increasingly making it easier to find listings that include dealer fees through filters and badging, which makes honest comparison much easier.
In summary, the era of the surprise finance-desk fee is fading, driven by regulators, states, and shoppers who simply expect better. Knowing how the pieces fit together means you walk in already ahead.
FAQ
What is the FTC?
The Federal Trade Commission is the U.S. agency that protects consumers and enforces fair competition. It has authority to act against businesses that advertise deceptively, including car dealers who advertise a price lower than what they actually charge.
Is there a federal law requiring dealers to include all fees in advertised prices?
Not a dedicated one. The FTC's auto-specific CARS Rule was struck down by a federal court in 2025 and formally withdrawn in 2026. However, the broader FTC Act still prohibits deceptive pricing, and the FTC is actively enforcing it against dealers.
What did the FTC do in 2026?
In March 2026, it sent warning letters to 97 dealership groups nationwide, stating that advertised prices must include all mandatory fees a customer will pay, with only government taxes and registration left out.
Which fees are the FTC talking about?
Mandatory dealer-imposed charges the buyer can't decline, such as documentation, processing, dealer prep, and electronic filing fees. Government charges like sales tax, title, and registration are treated separately.
Does this mean car prices will be lower?
No. The total cost isn't changing. What's changing is when you see it. Fees that used to appear at signing are increasingly shown upfront, so the advertised number is closer to what you'll actually pay.
What's the best way to avoid surprise fees?
Ask for the total price in writing before you visit, compare that total across dealers rather than the monthly payment, and decline any add-ons you didn't request.
Do state laws matter here too?
Yes. Some states have their own transparency requirements. Massachusetts requires dealers to advertise a price that includes mandatory fees, and California's version takes effect in October 2026. Rules vary widely from state to state.
