Criticism of FTC’s proposed changes to Used Car Rule

The Federal Trade Commission (FTC) is proposing changes to the Used Car Buyers Guide required by the agency’s Used Car Rule.  As explained by the FTC, “The Used Car Rule, formally known as the Used Motor Vehicle Trade Regulation Rule, has been in effect since 1985 and 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.”

The FTC’s proposed changes include the following:

1.  Adding a statement to the Buyers Guide encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories (yet to be created);

2.  Adding a statement in Spanish to the Buyers Guide directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire;

3.  Adding catalytic converters and airbags to the List of Systems on the back of the Buyers Guide; and

4.  Placing boxes on the back of the Buyers Guide where dealers will have the option to indicate whether (1) the manufacturer’s warranty still applies; (2) the manufacturer’s used vehicle warranty, such as a manufacturer’s certified used car warranty, applies; or (3) some other used vehicle warranty applies.

The FTC’s proposal has garnered significant criticism.   Rosemary Shahan, founder and president of Consumers for Auto Reliability and Safety (CARS), has said “The FTC really blew it.  This industry has a real problem and the proposed rule changes do not address that.”

Consumer advocates want more information provided on the Buyer’s Guide attached to used vehicles offered for sale.  As reported in an NBC news article, “they want the Used Car Rule to require dealers to disclose significant vehicle history information if they have it.   In comments submitted to the FTC on behalf of the attorneys general in 40 states, the National Association of Attorneys General (NAAG) called the current Buyer’s Guide ‘archaic’ and of ‘limited value’ to used car buyers.”

The FTC is accepting comments on its proposed changes to the Used Car Rule until Feb. 11.   You can comment by using this link.   All comments become part of the public record.