FTC Amends Used Car Rule | Practical Law

FTC Amends Used Car Rule | Practical Law

The Federal Trade Commission (FTC) has issued a new final rule to amend its Used Car Rule, formerly known as the Used Motor Vehicle Trade Regulation Rule. The Used Car Rule requires car dealers to display a window sticker, or Buyers Guide, on used cars offered for sale.

FTC Amends Used Car Rule

Practical Law Legal Update w-004-5158 (Approx. 4 pages)

FTC Amends Used Car Rule

by Practical Law Commercial Transactions
Law stated as of 11 Nov 2016 • USA (National/Federal)
The Federal Trade Commission (FTC) has issued a new final rule to amend its Used Car Rule, formerly known as the Used Motor Vehicle Trade Regulation Rule. The Used Car Rule requires car dealers to display a window sticker, or Buyers Guide, on used cars offered for sale.
On November 10, 2016, the Federal Trade Commission (FTC) issued a final rule amending its Used Car Rule (16 C.F.R. §§ 455.1-455.7). Under the Used Car Rule, car dealers must display a window sticker, called a Buyers Guide, on used cars that are offered for sale. The Buyers Guide must state whether the dealer is offering a used car for sale either:
  • With a dealer's warranty. If there is a warranty, the Buyers Guide must state the warranty's terms and conditions, including the:
    • duration of coverage;
    • percentage of total repair costs the dealer will pay; and
    • exact systems covered by the warranty.
  • "As is" without a warranty. If a state limits or prohibits "as is" sales of vehicles, that state law governs and this rule does not give dealers the right to sell used cars "as is." Instead, dealers must use an alternative Buyers Guide that discloses whether the sale is with a warranty or with only implied warranties.
This final rule revises the Buyers Guide by:
  • Changing the description of an "As Is" sale.
  • Placing boxes on the face of the Buyers Guide that dealers can check to indicate whether:
    • a vehicle is covered by a third-party warranty; and
    • a service contract may be available.
  • Providing a box that dealers can check to indicate 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 a statement that directs consumers to obtain a vehicle history report and to check for open recalls. The statement also instructs consumers to visit:
    • ftc.gov/usedcars for information on how to obtain a vehicle history report; and
    • 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 is conducting 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.
This final rule becomes effective on January 27, 2017.