The Federal Trade Commission (FTC) recently announced that it is seeking supplemental public comments on proposed changes to its Used Motor Vehicle Trade Regulation Rule (Used Car Rule) and the Used Car Buyers Guide (Buyers Guide) that the Used Car Rule requires dealers to display.

The Used Car Rule requires car dealers to display a Buyers Guide on the windows of used cars for sale. The Buyers Guide discloses whether the dealer is offering to sell a used car “as is” (without a warranty), or with a warranty. If the sale is with a warranty, the Buyers Guide discloses the warranty’s terms and conditions, including the duration of coverage, the percentage of total repair costs the dealer will pay, and the vehicle systems that the warranty covers. In states that do not permit “as is” used car sales, dealers must use an alternative Buyers Guide that discloses whether the sale is with a warranty or with implied warranties only.

The FTC initially obtained public comments on proposed changes to the Used Car Rule in December 2012 as part of its periodic review of agency rules and guides. The proposed rule changes identified in last week’s announcement include:  

  • Requiring dealers who have obtained a vehicle history report to indicate this in a box on the Buyers Guide, and to provide a copy of the vehicle history report to consumers upon request
  • Modifying the Buyers Guide description of an “As Is” sale to clarify that it means the sale of a used car without a warranty
  • Placing boxes on the front of the Buyers Guide for dealers to disclose “non-dealer” warranties

The FTC also stated that the proposed changes incorporate certain previously proposed amendments, including: 

  • Adding a statement to the Buyers Guide encouraging consumers to obtain vehicle history reports, to check for safety recalls, and to visit a proposed FTC website for more information
  • Adding a statement in Spanish on the front of the English-language Buyers Guide that advises Spanish-speaking consumers to ask for a Spanish-language version if they cannot read it in English

As part of its announcement, the FTC also invited comments on alternative approaches that public commenters previously proposed for the vehicle history disclosure and the “as is” statement.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance.

If you have questions, please contact CFS Practice Leader Alan S. Kaplinsky at 215.864.8544 or kaplinsky@ballardspahr.com, John L. Culhane, Jr., at 215.864.8535 or culhane@ballardspahr.com, Joel E. Tasca at 215.864.8188 or tasca@ballardspahr.com, or Christopher J. Willis at 678.420.9436 or willisc@ballardspahr.com.


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