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FTC Approves Amendments to Used Car Rule

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By Shawn D. Mercer, Esq.

The Federal Trade Commission has announced final amendments to its Used Car Rule, which requires car dealers to display a window sticker, or “Buyers Guide,” on used cars offered for sale. The Guide discloses whether the dealer is offering to sell a used car “as is” (without a warranty), or with a warranty. If the sale is with a warranty, the Guide discloses the terms and conditions, including the duration of coverage, the percentage of total repair costs the dealer will pay, and the vehicle systems the warranty covers. In states that do not permit “as is” used car sales, dealers must use an alternative Guide that discloses whether the sale is with a warranty or with implied warranties only.

As announced on November 10, 2016, the FTC has revised the Buyers Guide by:

  • Changing the description of an “As Is” sale;
  • Placing boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available;
  • Providing a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies;
  • Adding air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles;
  • Adding a statement that directs consumers to obtain a vehicle history report and to check for open recalls.  The statement also instructs consumers to:
    • visit ftc.gov/usedcars for information on how to obtain a vehicle history report; and
    • visit safercar.gov to check for open safety recalls;
  • Adding a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish; and
  • Providing a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide.

The amended Rule permits dealers to use their remaining stock of Buyers Guides for the period of one year.