Back in 1984, the Federal Trade Commission (FTC) implemented the Used Car Rule, which said that car dealers who sell more than five used cars in a 12-month period have to display a Buyers Guide. The Buyers Guide gives consumers important guidance about buying a used car, as well as warranty information about the specific vehicle they’re looking at. For a more comprehensive overview of the Used Car Rule, click here.
Last week, the FTC approved publication of a Federal Register notice inviting public comments on how the Used Car Rule is working, if it is still necessary, and if any changes should be made to it. You can download a PDF of the text of the Federal Register Notice by clicking here, then looking at the links on the right side of the FTC page.
The Used Car Rule is an incredibly important consumer protection, and one that should remain on the books. Although the FTC is seeking comment on dozens of Used Car Rule issues – both minor and major – it’s critical that everyone step forward and voice their support of the Used Car Rule. You can send the FTC your comments about the Used Car Rule via snail mail or through their online form.
As for me, I’m advocating that the Used Car Rule be revised to require even greater consumer disclosure. There are just too many unsavory characters that sell defective used cars to unwary consumers. Here’s how I think the Used Car Rule should be modified:
1. There should be a prominent warning that encourages consumers to have the vehicle inspected by an independent mechanic.
2. There should be a requirement that the dealer prominently displays the consumer’s rights under their state’s used car Lemon Law. Most people aren’t aware that some states require limited Lemon Law warranties, and what those warranties are.
3. There should be a requirement that that dealer disclose any known vehicle defects having to do with the car’s accident history, lemon buyback history, and salvage history.
4. There should be a requirement that the dealer disclose any odometer discrepancies.
5. There should be a requirement that the dealer disclose any prior use, such as if the car was used as a rental vehicle.
6. If CarFax is used as part of the transaction, the dealer should be required to include a copy of the CarFax report with the Buyers Guide. All too often, consumers are shown an altered CarFax report, but are not given a copy.
7. There should be a requirement that the box for selling the vehicle “As Is” is the last choice on the Buyers Guide, rather than the first. Because “As Is” is currently the first box, consumers are often led to believe that the dealer is extending minimal warranties.
So, join me in voicing your support for the expansion and continued enforcement of the Used Car Rule. Again, here’s the link for public comments.