By Christopher J. Capurso and Lauren T. Hunt*
At long last, the Federal Trade Com-mission has announced final amendments to the Used Car Rule (officially titled the Used Motor Vehicle Trade Regulation Rule). If you’ve been following along, you’ll remember that this regulatory review process began back in 2008. Before we jump into an overview of the amendments, here’s a quick history lesson.
The Used Car Rule was introduced in 1984 to prevent used car dealers from making oral misrepresentations and unfair omissions of material facts to consumers. The FTC’s primary aim was to curb unfair and deceptive practices, particularly in the warranty coverage area. The Used Car Rule requires dealers to disclose warranty information in a uniform manner on a window sticker known as the “Buyers Guide,” with those disclosures being incorporated by reference into the sales contract. Dealers must also provide Spanish-language versions of the Buyers Guide when conducting sales in Spanish.
The Used Car Rule amendments take effect January 27, 2017, and revise the Buyers Guide by
- placing boxes in the Buyers Guide that dealers can check to show whether a vehicle is covered by a third-party warranty and whether a service contract may be available;
- providing a box dealers can check to show that an unexpired manufacturer’s warranty applies;
- adding air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles;
- adding statements that direct consumers to obtain a vehicle history report, to check for open recalls, to visit www.ftc.gov/usedcars for information on how to obtain a vehicle history report, and to visit www.safercar.gov to check for open safety recalls;
- adding 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 conducts the sale in Spanish;
- providing a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide; and
- changing the description of an “As Is” sale.
Note that there are two new versions of the Buyers Guide, and your state’s law will determine which version you must use. Fillable versions of the new Buyers Guide forms and updated guidance are available on the FTC’s website.
Although the revisions appear straightforward, the devil is in the details. Dealers should review the new Buyers Guide forms, revised instructions, and used car warranty and service contract options they offer and consult with their legal counsel to make sure the revised forms are accurately completed.
Finally, don’t recycle the stacks of old Buyers Guides you may have lying around just yet. The amended rule permits dealers to use their remaining stock of Buyers Guides until January 27, 2018.
*Christopher J. Capurso is an associate in the Virginia office of Hudson Cook, LLP. Chris can be reached at 804.212.2998 or by email at email@example.com.
*Lauren T. Hunt is an associate in the Virginia office of Hudson Cook, LLP. She can be reached at 804.212.2697 or by email at firstname.lastname@example.org.