- FTC Used Car Rule
- August 24, 2017 | Author: Lance J. Kinchen
- Law Firm: Breazeale, Sachse & Wilson, L.L.P. - Baton Rouge Office
The FTC Used Car Rule requires dealers selling used vehicles to display a copy of the "Buyers Guide" form, and include specific contractual language in their sales contracts. The FTC updated and revised the Buyers Guide form that dealers must use. The new form must be used beginning January 27, 2017. However, dealers may continue to use their existing stock of Buyers Guide forms for one year until January 27, 2018.
Before a dealer offers a used vehicle for sale to a consumer, the dealer must appropriately fill in and display on the vehicle a Buyers Guide form. The Buyers Guide must be displayed prominently and conspicuously on or in a vehicle before a car is offered for sale to the public. However, there is no express requirement that the dealer make the Buyers Guide available to online vehicle shoppers, even if the entire process occurs online.
Violations of the Used Car Rule could lead to FTC enforcement action. The FTC can seek civil penalties of up to $40,654 for each violation of the Rule. There is no private right of action for violations of the FTC Act, but such alleged violations could form the basis of a state UDAP (unfair or deceptive acts or practices) claim.
The revised Buyers Guide includes a number of changes:
1. The following disclosure language is now included in the pre-printed form: "OBTAIN A VEHICLE HISTORY REPORT AND CHECK FOR OPEN SAFETY RECALLS. For information on how to obtain a vehicle history report, visit ftc.gov/usedcars. To check for open safety recalls, visit safercar.gov. You will need the vehicle identification number (VIN) shown above to make the best use of the resources on these sites."
2. Several changes were made to the language in the revised Buyers Guide that clarify the dealer's obligations and distinguish between dealer and non-dealer warranties.
3. The revised Buyers Guide also adds a new checkbox to disclose non-dealer warranty coverage such as factory "certified" warranties.
4. It includes a statement at the bottom of the form in Spanish that advises consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish.