A little history on The Used Car Rule
The Used Car Rule was introduced in 1984 with the primary aim to curb unfair and deceptive practices, particularly in the warranty coverage area and to stop used car dealers from making oral misrepresentations and unfair omissions of material facts to consumers. The Used Car Rule applies in all states except Maine and Wisconsin. These two states are exempt because they have similar regulations that require dealers to post disclosures on used vehicles.
In 2016, the FTC announced it would increase the maximum penalties per violation from $16,000 to $43,280. This increase more than doubled the maximum civil penalties it could seek against violators.
Check Yourself: Are You In Compliance with the Used Car Rule?
The FTC web site has a great list of questions to ask yourself to make sure you’re complying:
- Do you complete a Buyers Guide properly for each used vehicle offered for sale?
- Do you post the Buyers Guide prominently and conspicuously on each used vehicle you offer for sale?
- If you choose to include a signature line for the buyer’s signature, do you include the following required disclosure language:
I hereby acknowledge receipt of the Buyers Guide at the closing of this sale.
- Do you put the following required disclosure in your sales contract:
The information you see on the window form for this vehicle is part of this contract. Information on the window form overrides any contrary provisions in the contract of sale.
- Do you give the vehicle’s Buyers Guide or a copy to the purchaser at the time of sale and make sure it states the final negotiated warranty coverage accurately?
- If a sale is conducted in Spanish, do you use the Spanish language Buyers Guide?
- If you offer a written warranty, do you prepare a warranty document that complies with federal law? Is the warranty document available for examination by potential buyers?
The Used Car Rule is one of a multitude of regulations dealers are on the hook for. But staying on top of them all shouldn’t make you panic.
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