The Used Car Rule, formally known as the Used Motor Vehicle Trade Regulation Rule, 16 CFR Part 455, has been in effect since 1985. It 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.
On November 18, 2016, the FTC published its final rule amending the Used Car Rule. This brought to an end a nearly nine year review of the rule. Until the recent revisions the Buyers Guide had not be amended or updated from its original version. The amended rule became effective on January 27, 2017.
In December 2012, after review of the Used Car Rule and consideration of comments it received, the FTC issued a notice of proposed rulemaking to amend the used car rule. The FTC proposed to include a statement on the Buyers Guide advising consumers about the availability of vehicle history reports and directing consumers to an FTC website for additional information about the reports. The proposed rule also would have changed how “As Is” sales are described on the Buyers Guide, and added a Spanish language statement to the Buyers Guide advising Spanish-speaking consumers to ask for a Spanish language version of the Buyers Guide.
The Final Rule adopts the FTC’s initial proposal regarding vehicle history reports. The Final Rule also adds a statement to the Buyers Guide encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information. In addition, the Buyers Guide now includes a statement directing consumers to check for open safety recalls by visiting safecar.gov.
The FTC also revised the “As Is” statement by adopting the following language:
AS IS – NO DEALER WARRANTY
THE DEALER DOES NOT PROVIDE ANY WARRANTY FOR ANY REPARIS AFTER SALE.
This change to the “As Is” language, as well as a change to add boxes to the front of the Buyers Guide where dealers can disclose manufacturer and other non-dealer warranties, clarifies that though the dealer gives no warranties and is not liable for repairs when it sells a vehicle “As Is”, the vehicle still may be covered by third party warranties.
The FTC also revised the “Implied Warranties Only” disclosure for jurisdictions that prohibit “As Is” sales, and revised the Buyers Guide to include the Spanish language notice advising Spanish-speakers to ask for a Spanish version of the Buyers Guide. Air bags and catalytic converters were also added to the list of major defects that may occur in used vehicles listed on the back of the Buyers Guide.
Further, the FTC also provided updated versions of the Buyers Guide in the Final Rule, which incorporate the changes to the Used Car Rule. The Final Rule permits dealers to use their existing stock of the “old” version of the Buyers Guide until January 27, 2018, though dealers can begin using the new versions before that date. As of January 27, 2018, however, dealers must use the updated versions of the Buyers Guide that the FTC published in its Final Rule.
The January 27, 2017 amendments dealers need to understand include:
- 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 whether a service contract might be available.
- Providing a box dealers can check to indicate an unexpired manufacturer’s warranty applies.
- Adding air bags and catalytic converters to the Buyers Guide’s list of major defects that can 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 to visit safercar.gov to check for open safety recalls.
- Adding a statement in Spanish to the English-language Buyers Guide and 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 dealers can use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide.
- The amended rule allows dealers to use their remaining stock of Buyers Guides for one year after its effective date.
- Used vehicle dealers can get more information from the FTC’s “Dealer’s Guide to the Used Car Rule,” which is available at www.ftc.gov/tips-advice/business-center/guidance/dealers-guide-used-car-rule.
- Fillable versions of the Buyers Guide in English and Spanish are available at FTC.gov.