- FTC Amends Used Car Rule, Issues Revised Buyers Guide
- The Federal Trade Commission (FTC) has announced final amendments updating the Used Car Rule by revising the Buyer's Guide that must be displayed on a used vehicle before that vehicle is displayed for sale or a customer is allowed to inspect it for the purpose of buying it. The amended rule is effective January 27, 2017. However, the final rule permits dealers to use their existing stock of Buyers Guides for up to one year after the effective date of the rule amendments.
- These final amendments are the end result of a lengthy regulatory review process that began in 2008 and in which NADA played a central role. NADA submitted more than four sets of extensive comments with respect to this rulemaking, met with the FTC and other interested stakeholders, and coordinated with other trade associations and entities in the submission of numerous other comments.
- The revised Buyers Guide contains a number of changes, many of which were sought by NADA to help dealers. For example, it contains a method for disclosing "certified" and other warranties that does not exist on the current Buyers Guide. It also allows dealers to disclose (if they choose) that the manufacturer's warranty has not expired on certain components of a vehicle.
- In addition, NADA successfully argued against numerous other changes that were sought by so-called "consumer" groups, state attorneys general, and the plaintiffs' bar, and that were proposed in several different ways by the FTC. For example, among the suggestions that were not ultimately accepted by the FTC: a requirement that dealers disclose whether they obtained a vehicle history report and provide a copy to the consumer; inflammatory proposed language on the "As-Is" guide that stated "but you may have other legal rights and remedies for dealer misconduct"; and calls to regulate the sale of cars under the Used Car Rule based on their recall status.
- NADA will issue more detailed guidance for dealers on the revised Buyers Guide. In the meantime, dealers should review the revised Buyers Guide carefully and work with your vendors and advisors to ensure that they are prepared to use the revised form as required by the final rule and their own state law.