FTC goes used car shopping, “test drives” 2300 vehicles

So we went used car shopping recently – the FTC and 12 other law enforcement agencies. We visited 94 dealerships in 20 cities across the country. Yes, we saw some low-mileage cream puffs, but that’s not what we were in the market for. We wanted to see if dealerships were displaying the revised Buyers Guide required as of January 28, 2018. The results proved interesting.

According to the FTC’s Used Car Rule, dealers must display the Buyers Guide in the window of used cars. Consumers look to the Guide for important information to consider when used car shopping. After getting feedback from the public, the FTC announced amendments to the Used Car Rule in November 2016 and set January 28, 2018, as the effective date by which dealers had to display the revised Buyers Guide on all used vehicles they offer for sale. Among other things, the revised Buyers Guide:

• Adds a box that dealers can check to indicate if a vehicle is covered by a third-party warranty and if a service contract may be available;
• Adds a box to indicate that an unexpired manufacturer’s warranty applies;
• Adds air bags and catalytic converters to the list of major defects that may occur in used vehicles;
• Tells consumers about getting a vehicle history report and checking for open recalls; and
• Adds 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.

The compliance sweep was conducted between April and June 2018 at dealerships in California, Florida, Illinois, New York, Ohio, Texas, and Washington. Inspectors found Buyers Guides on 70% of the more than 2,300 vehicles inspected. In almost half of those instances, it was the proper revised Buyers Guide. In other cases, it was the old version. Of the 94 dealerships inspectors visited, 33 had the revised Buyers Guide on more than half of their vehicles. And kudos to the 14 dealerships that had the revised Guide on all of their used cars.

FTC staff sent letters to each dealership detailing the results of the inspection and offering resources to help them comply with the amended Rule. What’s the next step? In the coming weeks, inspectors will be returning to the dealerships that weren’t displaying the revised Buyers Guide. Given the potential civil penalty of $41,484 per violation, we hope to see the new Buyers Guide in the windows of all used cars.

Compliance isn’t complicated. Dealers can find materials on the FTC’s portal for the auto industry:

• Buyers Guides: Guidance;
• Buyers Guides: Fillable Forms;
• Buyers Guides: Format Notes.

For more information, read Answering Dealers’ Questions about the Revised Used Car Rule and the Dealer’s Guide to the Used Car Rule.