FTC Denied a Request from the California Air Resources Board (ARB) for a Conditional Exemption from the FTCs Used Car Rule

The Federal Trade Commission has denied a request from the California Air Resources Board (ARB) for a conditional exemption from the FTC’s Used Car Rule. The ARB had petitioned the Commission to approve the inclusion of a "smog index" and other language on the front side of the Buyers Guide. The Used Car Rule requires that all used vehicles offered for sale display a Buyers Guide that contains key warranty disclosures and other information for consumers. The format of the Buyers Guide is prescribed by the Used Car Rule, and any change in format to the Guide would require a rulemaking or a conditional exemption.

Under existing California law, the ARB has the authority to require a smog index on all new vehicles offered for sale, but does not have the authority to require that information on used vehicles. The information can be provided voluntarily by used car dealers, however. According to the ARB, the "smog index" or "SI" discloses to consumers the relative level of pollutants emitted by the vehicle specific to each model year. The lower the SI, the lower level of pollutants emitted by the vehicle.

In its letter denying the request for conditional exemption, the Commission said that the smog index is unrelated to the purpose of the Rule, which is to provide warranty information to purchasers of used vehicles and, thereby, to prevent deceptive warranty claims. The Commission said that inclusion of this unrelated information in the Buyers Guide by some used car dealers would defeat the goal of standardizing the warranty information on the Guide and could thereby diminish the effectiveness of the Guide. Used car dealers remain free to provide the “smog index” elsewhere on the vehicle, if they choose to do so.

The Commission vote denying the exemption to the Used Car Rule was 5-0.

Copies of the ARB petition, as well as copies of the Used Car Rule, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 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. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File No. 862 3118)