The hands-free car kit allows a mobile handset to enter and exit privacy mode without the user having to press a privacy button. The simple act of picking up the mobile handset out of its cradle switches the hands-free car kit from hands-free mode to privacy mode. When the mobile handset is installed in the cradle the hands-free car kit enters hands-free mode. If the mobile handset is removed from the cradle the hands-free car kit enters privacy mode.