Bait pricing is when a dealer advertises a car at a price it will not sell, to get you through the door. The car disappears when you call, or the price changes when you arrive. The FTC's CARS Rule was supposed to stop it. A court killed the rule, but the old law against bait advertising is still in force.
The ad that is not a car
Bait pricing is simple. A dealer advertises a car at a price below market to get calls and visits. When you call, the car is gone, or it was never there. When you arrive, the salesperson steers you to a different car at a higher price, and the advertised car is explained away: it just sold, it was a mistake, it was a different trim. The advertised price was never the price. It was the hook.
The practice is old, and the law against it is older. The FTC's Guides Against Bait Advertising, 16 CFR Part 238, have prohibited it for decades, and Section 5 of the FTC Act prohibits deceptive practices generally. A dealer that advertises a car it will not sell at the advertised price is breaking the law, and that has been true since before the internet existed.
What changed in 2024 was the attempt to make the rule sharper. The FTC's CARS Rule, the Combating Auto Retail Scams Rule, would have required dealers to honor advertised prices and banned hidden junk fees. The Fifth Circuit vacated it on January 27, 2025, and the FTC formally withdrew it on February 12, 2026. The rule is gone. The old law is not.
What the FTC is still doing
The vacated rule did not end enforcement. In March 2026 the FTC sent warning letters to 97 dealership groups about deceptive pricing practices, a signal that the agency was still watching the same behavior under the old law. In April 2026 it announced a settlement that included a $3.1 million civil penalty, with refunds to buyers that could top $75 million.
The numbers in that settlement are worth reading. In the sampled transactions, more than 88 percent of buyers paid above the advertised price, mostly by $2,000 or more. That is not a few mistakes. That is a pricing model in which the advertised price is a starting point for negotiation and the real price is whatever the buyer agrees to in the finance office.
The state attorneys general are in the same fight, and some state motor vehicle advertising laws are stricter than the federal rules. A dealer that survives the federal standard can still lose a state case, and state cases do not depend on the CARS Rule existing.
Why the price moves when you arrive
The advertised price and the price you pay are different numbers because the advertised price is usually missing things. Dealer fees, documentation fees, add-ons that were already installed, and financing terms that change the total are all added after you arrive. The advertised price is the car. The price you pay is the car plus everything the dealer can attach to it.
The bait version of this is when the car itself disappears. The dealer advertises a base trim at a low price, and when you arrive the base trim is gone and the only car on the lot is a higher trim at a higher price. The dealer did not lie about the price of the car you are looking at. It lied about the existence of the car it advertised.
The way to tell the difference between a car that sold and a bait car is the pattern. A car that sold is gone once. A bait car is advertised for weeks, is always unavailable when you call, and is always replaced by the same more expensive alternative. One sold car is a fact. A permanently unavailable car is a strategy.
What to do before you drive over
Ask for the price in writing, with the VIN, before you leave the house. Ask whether the price includes all fees, and ask for an out-the-door total. A dealer that will not put the price in writing is telling you the price is not real, and you should believe it.
When you arrive, check the VIN against the advertisement. If the car on the lot is not the car in the ad, you are looking at a different car, and the price of the car in the ad is irrelevant. Walk away from the substitute and make the dealer produce the advertised car or admit it does not exist.
Keep the advertisement. A screenshot with the date, the price, and the VIN is the evidence that matters if you file a complaint with the FTC or your state attorney general. The agencies that enforce this law need the ad, not your memory of it.
Keep reading
Related guides on this site: how fake buyers pollute a dealer CRM how to spot a flood car with a VIN check how odometer rollback works on digital clusters More from Bot Protection For Auto Marketplaces.
Frequently asked questions
What was the FTC CARS Rule?
The CARS Rule was a 2024 FTC rule that would have banned hidden fees and required dealers to honor advertised prices. The Fifth Circuit vacated it on January 27, 2025, and the FTC formally withdrew it on February 12, 2026. The rule is gone.
What law still applies to bait pricing?
The FTC Act Section 5 prohibition on deceptive practices, and the FTC's Guides Against Bait Advertising, 16 CFR Part 238, which have been in force for decades. A dealer that advertises a car it will not sell is still breaking the law, with or without the CARS Rule.
How do I protect myself from bait pricing?
Ask for the price in writing, with the VIN, before you drive over. Ask whether the price includes all fees, and ask for an out-the-door total. If the dealer will not put it in writing, the price is not real.
Is the FTC still enforcing against bait pricing?
In March 2026 the FTC sent warning letters to 97 dealership groups about deceptive pricing. In April 2026 it announced a settlement with a $3.1 million civil penalty, where refunds to buyers could top $75 million. The enforcement did not stop when the rule was vacated.
How do I tell bait pricing from a car that just sold?
It is the difference between a car that was never available and a car that sold. A car that sold quickly is not bait pricing. A car that is advertised for weeks, is always unavailable when you call, and is always replaced by a more expensive car is.
Do state laws cover bait pricing too?
Yes. Some states have their own motor vehicle advertising laws that are stricter than the federal rules. A state attorney general can bring a case under state law even when the federal rule is gone.