Founder and Managing Partner
Partner, Chair of the Regulatory and Licensing Practice
The Federal Trade Commission (FTC) recently issued a press release answering dealers’ questions concerning the revised Used Motor Vehicle Trade Regulation Rule, also known as the Used Car Rule. The FTC’s newly released guidance is found at https://www.ftc.gov/tips-advice/business-center/guidance/answering-deale.... The Used Car Rule requires dealers to display the Buyer’s Guide on all used cars, which contains warranty information.
The revised used car rule: the basics
The FTC provides a list of important changes to the Used Car Rule and the Buyer’s Guide:
The revised Buyer’s Guide recommends consumers get a vehicle history report before buying a used car and sends them to ftc.gov/usedcars for more information on how to get one. It also directs consumers to safercar.gov to check for safety recalls before buying a used vehicle.
A new description in the revised Buyer’s Guide of an “As Is” sale clarifies that “As Is” refers only to a vehicle that is offered with a warranty from the dealer.
The revised Buyer’s Guide adds boxes to be checked to indicate a vehicle is covered by a third-party warranty and that a service contract may be available.
The revised Buyer’s Guide adds a box to be checked to indicate an unexpired manufacturer’s warranty applies.
The new English-language version of the Buyer’s Guide adds a Spanish statement advising Spanish-speaking consumers to ask for the Buyer’s Guide in Spanish if the dealer is conducting the sale in Spanish.
On the back of the revised Buyer’s Guide, air bags and catalytic converters are added to the list of major defects that may occur in used vehicles.
Although we recommend upgrading to the new version of the Buyer’s Guide now, dealers are allowed to use the old form version until January 27, 2018. If you are using a remaining supply of the old forms, you must include the new language the FTC requires. The new Buyer’s Guide is found at https://www.ftc.gov/tips-advice/business-center/guidance/buyers-guide-fi....
Please note the Buyer’s Guide is subject to especially strict formatting and content rules. Do not modify the Buyer’s Guide without checking first with legal counsel. Your edits may appear minor, but incorrect edits can result in huge penalties of up to $40,654, per violation and a criminal misdemeanor under California law. If you have any questions, always contact your knowledgeable auto dealer attorney. It is important to understand how to comply with the Used Car Rules and properly use the Buyers Guide to avoid regulatory enforcement actions.