FTC Issues Revised Dealer and Consumer Guides about Used Car Rule

The Federal Trade Commission has revised its dealer and consumer publications that explain the Used Car Rule. According to industry statistics, more than 40 million used cars were sold in 1997, and complaints about used cars rank high in consumer surveys.

Both publications explain the Used Car Rule, which requires dealers to post a Buyers Guide in every used car they offer for sale, including light-duty vans, light-duty trucks, demonstrators and program cars. Buyers Guides, however, do not have to be posted on motorcycles and most recreational vehicles, and anyone who sells less than six cars a year doesn’t have to post a Buyers Guide.

The industry publication, "A Dealer’s Guide: The Used Car Rule," explains a dealer’s responsibilities for complying with the rule, which has been in effect since 1985. The brochure was prepared in cooperation with the National Independent Automobile Dealers Association (NIADA), which has committed to print 100,000 copies and distribute them to virtually every dealer in the country.

"Our goal in working with NIADA to distribute this publication is to assist industry in complying with the rule," said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. "We’re really pleased that NIADA will post the guide on its website and also will make bulk shipments of it to all of the major wholesale auction locations across the country, along with a poster promoting the guide."

The consumer brochure, "Buying a Used Car," explains the rule in an easy-to-read format for car buyers and highlights what the Buyers Guide must explain. For example, the guide must tell consumers:

• whether the vehicle is being sold "as is" or with a warranty;
• what percentage of the repair costs a dealer will pay under the warranty;
• that spoken promises are difficult to enforce;
• to get all promises in writing;
• to keep the Buyers Guide for reference after the sale;
• the major mechanical and electrical systems on the car, including some of the major problems a consumer should look out for; and
• to ask to have the car inspected by an independent mechanic before you buy.

Copies of the full text of both publications and other consumer education materials are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.