Common Law - The FindLaw Consumer Protection Law Blog

Used Car Rule Updated: Changes Approved by FTC

While many people may have heard of lemon laws, most people have not heard of the Used Car Rule, despite it being in place since 1985. Don't be shocked though, as the rule really only applies to used car dealers and those pieces of paper that are taped up on the windows of used cars for sale at dealerships. However, this month, the FTC updated the Used Car Rule.

The updates to the rule are meant to help clarify used car sales for consumers, as well as protect consumers from making poor decisions and uninformed purchases. The new rule seeks to provide consumers with some common sense advice and clarification on used car warranties. All car dealers who sell used cars are required to place a Buyer's Guide (which is just a piece of paper that lists out specific information about the vehicle) in a clearly visible location on or in any used vehicle for sale.

Consumer Common Sense Advice

While used car shopping can be overwhelming and confusing, the FTC's new rule provides a couple important reminders to car buyers:

  • Check the vehicle's history report
  • Check for open recalls

These reminders provide the urls to safercar.gov as well as ftc.gov/usedcars. SaferCar is a government website that allows consumers to check for whether a vehicle has outstanding recalls, while the other site provides information for consumers on how and why to check a vehicles history (such as accidents, repairs, and title).

Also, the FTC suggests that used car shoppers have any vehicle independently inspected by a mechanic before purchase. Additionally, most states have some type of Lemon Law which protects individuals against dealers, and sometimes private parties, who sell bad cars (referred to as lemons).

Warranties

While new cars tend to always have some sort of manufacturer's warranty, that is rarely the case with used cars. The new Buyer's Guide, that used car dealers are required to display, clearly describes what type of warranty, if any, will be provided with the vehicle. If a vehicle is sold "as-is" or only with the state required implied warranty, the Buyer's Guide has checkboxes that a dealer can clearly mark for consumers to be more informed. Also, when a warranty does not cover everything, or requires a deductible, or only pays for a percentage of repairs, the new rule requires detailed information be provided on the Buyer's Guide.

Dealers that fail to adhere to the new rule can face severe fines and penalties from the FTC as well as state regulators as many states have similar laws, or simply incorporate the Used Car Rule into their state laws.

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