Significant Changes to the Used Car Rule Made on November 11, 2016

The FTC has amended the Used Car Rule which deals with the use of Buyers Guides.  These changes are significant and dealers should take care to comply or risk significant fines.  The Used Car Rule, as revised, still requires the dealer to display a Buyers Guide in the window of all used vehicles; however, significant changes which are effective January 27, 2017 have been made to the language/disclosures that are required to be made on the Buyers Guide.

The new rules modify the description of an “As-Is” sale and add boxes to the front of the Buyers Guide for the dealer to check to indicate the status of any manufacturer or third-party warranty and the availability of a service contract.

Additionally, catalytic converters and air bags have been added to the list of potential major defects.  Further, statements are to be included in the Buyers Guide that inform the customer to obtain a vehicle history report, that direct the customer to check for open recalls and that advise the customer to ask for a Spanish-language version of the Buyers Guide (This statement is included in Spanish on the English-language version of the guide.)

Dealers are allowed to use their unused stock of Buyers Guides (for up to one-year from the effective date) but should use Buyers Guides that comply with the new rules once that supply is depleted.

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.  Further, “Fillable” versions of the Buyers Guide in English and Spanish are also available at FTC.gov.