FTC Proposes Modifications to Used Car Rule

As part of the Federal Trade Commission’s systematic review of all of the agency’s rules and guides to ensure that they are up-to-date, effective, and not overly burdensome, the FTC is seeking public comment on proposed changes to the Used Car Buyers Guide required by the agency’s Used Car Rule. The Commission is also issuing a final rule that makes technical corrections and revises the Spanish translation of the Buyers Guide. The Buyers Guide gives consumers critical information about who will pay for repairs if something goes wrong with the car they buy. The Commission last reviewed and amended the Used Car Rule in 1995.

The Used Car Rule, formally known as the Used Motor Vehicle Trade Regulation Rule, has been in effect since 1985 and requires car dealers to display a window sticker, known as a Buyers Guide, on the used cars they offer for sale. The Buyers Guide discloses whether the dealer offers a warranty and, if so, its terms and conditions, including the duration of the coverage, the percentage of total repair costs the dealer will pay, and which vehicle systems the warranty covers. In states that do not permit sales of used cars “as is,” or without warranties, dealers must display an alternative version of the Buyers Guide.

The FTC has sought public comment on the Used Car Rule, and based on a review of the comments, has concluded that the Rule continues to benefit consumers and will be retained. The Commission is now seeking comments on potential revisions to the Rule that would empower consumers without adding burdens to businesses, including by:

• adding a statement to the Buyers Guide encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories;
• adding a statement in Spanish to the Buyers Guide directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire;
• adding catalytic converters and airbags to the List of Systems on the back of the Buyers Guide; and
• placing boxes on the back of the Buyers Guide where dealers will have the option to indicate whether (1) the manufacturer’s warranty still applies; (2) the manufacturer’s used vehicle warranty, such as a manufacturer’s certified used car warranty, applies; or (3) some other used vehicle warranty applies.

The proposed Buyers Guide also makes some minor changes to improve readability.

The Commission also invites comments on topics such as the nature and prevalence of deception in Internet used car sales and information the Commission should make available on a new website.

To help protect consumers from potential post-purchase problems, both the proposed Buyers Guide and the current Buyers Guide recommend that consumers ask about an independent mechanic’s inspection before purchase, provide information about warranties, list a vehicle’s major systems and the major defects that may occur in them, and warn consumers that they should get all promises in writing because spoken promises are difficult to enforce. The Buyers Guide disclosures are incorporated by reference into the sales contract, and govern in the event of an inconsistency between the Buyers Guide and the contract.

In addition to the proposed changes to the Rule, the FTC is also announcing a new final Rule that makes minor corrections to the Spanish translation of the Buyers Guide. The Used Car Rule requires dealers to use Spanish-language versions of the Buyers Guide and to make related contract disclosures in Spanish when they conduct sales in Spanish. The revised Spanish-language versions will take effect on February 11, 2013, but dealers may use up any remaining supplies of the current Buyers Guide. The revised Spanish translations can be found on the FTC’s website at business.ftc.gov.

For more information about the Used Car Rule, read Buying a Used Car. For used car dealers, the FTC offers A Dealer’s Guide to the Used Car Rule. “Fillable” versions of the Buyers Guide in English and Spanish are now available at FTC.gov.

The Commission vote approving the Final Agency Action Notice and Notice of Proposed Rulemaking was 5-0. They are available on the FTC’s website and as a link to this press release and will be published in the Federal Register soon. Comments can be filed electronically or submitted by mail. To comment by mail, write “Used Car Rule Regulatory Review, Project No. P087604” on comments and send them to Federal Trade Commission, Office of the Secretary, Room H-113 (Annex T), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments must be received by February 11, 2013.  All comments received will be posted at www.ftc.gov/os/publiccomments.shtm.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.