The CARS Rule Died in Court. The FTC Just Collected $4 Million From a Dealership Anyway.

On Aug. 19, the Federal Trade Commission and the state of Connecticut announced a $4 million settlement with Manchester City Nissan over fees customers allegedly never agreed to pay. The dollar figure is not the most consequential part. The proposed order requires the dealership to display the maximum total price of a vehicle more prominently than any other number it shows a customer - and to obtain express, informed consent for every charge. Nineteen months after a federal court struck down the CARS Rule, its core requirements keep coming back, one consent order at a time.

Myth vs. data: A common read in 2025 was that federal junk-fee enforcement in auto retail lost its teeth when the Fifth Circuit vacated the FTC's CARS Rule in January 2025, before the rule ever took effect. The docket since then suggests otherwise:

• March 2026: the FTC sends warning letters to 97 dealerships over advertising and fee practices; the names go public on May 28.
• April 2026: Lindsay Auto Group settles with the FTC and Maryland - more than $75 million in charges may be eligible for consumer refunds, plus a $3.1 million state civil penalty.
• August 2026: Manchester City Nissan agrees to pay $4 million to settle with the FTC and Connecticut.

What regulators say happened in Manchester

According to the FTC's Aug. 19 announcement, the agency and Connecticut sued Chase Nissan LLC, doing business as Manchester City Nissan, back in January 2024 - and the complaint named not just the dealership but its owners and managers. The allegations follow a pattern regulators have described for years. Some consumers were told they had to pay to "certify" used vehicles the store had already advertised as certified pre-owned. Other charges, such as total loss protection, were - in the FTC's words - "frequently inserted into financing agreements without the consumers' knowledge or consent."

Two details in the announcement deserve more attention than the headline number.

First, the evidence. The agencies said the dealership's own data showed customers were frequently charged thousands of dollars in unlawful fees. Nobody had to reconstruct conversations from memory; the store's records made the case. Connecticut Attorney General William Tong characterized the conduct as systematic junk-fee charging and said the settlement will send millions of dollars back to customers.

Second, the remedy. Beyond the $4 million earmarked for consumer redress, the proposed order requires the dealership to display - as the most prominently displayed item - the maximum total price a consumer must pay for a vehicle, excluding only required government charges, and to secure express, informed consent for all charges. It also bars misrepresentations about whether a vehicle is certified or carries a limited manufacturer warranty.

The playbook is older than this settlement

Anyone who has followed FTC auto-retail cases will recognize the fact pattern. In October 2022, Passport Automotive Group paid more than $3.3 million over allegations that included advertising certified, reconditioned or inspected cars at specific prices, then adding certification, reconditioning or inspection fees it told customers were required. The same fee dispute, litigated four years apart.

Amounts and allegations are as described in FTC announcements; settlements resolve allegations without an admission of wrongdoing.

The consent orders are quietly rebuilding the CARS Rule

When the Fifth Circuit vacated the CARS Rule in January 2025, it ruled on procedure - the court found the FTC skipped a required advance-notice step - not on the substance of what the rule demanded. The rule would have required offering-price transparency, banned charging for add-ons that provide no benefit and mandated express, informed consent for charges.

Now look at what the 2026 orders impose on Lindsay and Manchester City Nissan: clear and conspicuous total-price disclosure, express informed consent for every charge, and bans on misrepresenting financing requirements and certification status. Consent orders bind only the named defendants, and no court has resurrected the rule itself. But three enforcement data points in five months draw a fairly straight line: the agencies did not abandon the rule's substance after the vacatur. They are rebuilding it case by case, with state attorneys general as co-plaintiffs - and, in both 2026 actions, with individual owners, executives and managers named personally.

For a dealership principal, the practical question is not whether a vacated rule technically applies to your store. It is whether your current quoting and consent processes would survive the level of scrutiny these five groups received.

Why this lands on the phone

Fee cases are usually framed as advertising problems or F&I problems. The uncomfortable part for operators is the layer in between: the quote.

The Lindsay complaint alleged that the vast majority of consumers ended up paying hundreds or thousands of dollars more than the advertised price once they arrived at the store. That gap - between the advertised number, the quoted number and the contracted number - is exactly where fee enforcement lives. And at most dealerships, the quoted number is produced on the phone, by whoever picked up, from whatever pricing knowledge they carry, under whatever pressure that hour happens to bring.

Verbal quotes are the least controlled pricing surface in the store. Websites are versioned and reviewed. Contracts are printed and signed. Phone quotes are improvised hundreds of times a month, and each one is a price representation that a regulator, a plaintiff's attorney or a customer with a recording app can later compare against the deal jacket. We have written before about how F&I answers vary from rep to rep on dealership phones; this settlement shows what that kind of variance can look like from a regulator's chair. It is worth repeating that in Manchester, the government's case ran on the dealership's own records.

Where AI fits - and where it does not

Carbuki builds AI phone agents, so weigh this section with that in mind. The operational logic, though, is not vendor logic.

An AI phone agent quotes from a single pricing source, so the number a caller hears on Tuesday night matches the website and matches Saturday morning. Every conversation is logged verbatim, which produces a timestamped record of what was disclosed and what the customer agreed to - directly relevant when an order, or a state UDAP statute, turns on express informed consent. That documentation cuts both ways, and that is the point: transcripts that would prove misconduct also prove its absence. The flip side is that automation concentrates risk in configuration. Feed an agent a stale fee table and it will quote the wrong number at scale, politely and consistently. That makes clear internal ownership of AI systems a compliance control, not an org-chart nicety - and several states now have disclosure rules about AI itself on customer calls.

None of this requires AI. It requires consistency, documentation and one out-the-door number a customer can trust across channels. AI phone agents are one way stores are operationalizing that; a disciplined human team with good tooling and call review is another. What increasingly looks indefensible, on the evidence of this year's orders, is improvisation.

Five checks worth running this quarter

1. Pull 20 recent deals and reconcile three numbers: the advertised price, the price quoted by phone or email, and the final contract. The gaps are your exposure map.
2. Make the out-the-door figure the most prominent number on every quote. That is now the explicit standard both 2026 consent orders impose on their defendants.
3. Treat add-on consent as a per-product event: affirmatively offered, separately priced, documented. Pre-loaded bundles are where "unauthorized charges" allegations start.
4. Sample recorded calls monthly for fee and certification language, the two claims at the center of the Manchester case.
5. Give one person ownership of pricing data across website, phone and desk - so a quote discrepancy is a bug report, not a lawsuit exhibit.

The phone is where pricing discipline most often leaks: calls answered by whoever is free, quotes from memory, nothing logged. That is a fixable operations problem, and fixing it now carries compliance value as well as CX value. Carbuki (carbuki.com) builds AI voice agents for dealerships that answer every call, quote from one source of truth and keep a complete record of the conversation.

Sources

• FTC, Connecticut Secure $4 Million Settlement with Manchester City Nissan Over Deceptive Fees Allegations - FTC, Aug. 19, 2026
• Settlement with Manchester City Nissan - Connecticut Attorney General, Aug. 2026
• FTC, Maryland Attorney General Secure Full Refunds and Additional Penalties Against Lindsay Auto Group - FTC, April 2, 2026
• FTC Takes Action Against Multistate Auto Dealer Napleton - FTC, April 2022
• FTC Takes Action Against Passport Automotive Group - FTC, October 2022
• Coulter Motor Company and Gregory DePaola, FTC and State of Arizona v. - FTC case page, 2024
• Fifth Circuit Strikes Down FTC's Auto Retail Scam Rule - Holland & Knight, February 2025
• Auto Dealers: The FTC Is Back in the Driver's Seat - Crowell & Moring, 2026
• FTC, Connecticut secure $4 million settlement with Nissan dealer over unauthorized fees - CBT News, Aug. 20, 2026