FTC Used Car Rule Compliance Made Easy W…
FTC Used Car Rule Compliance Made Easy
While there are many aspects to a motor vehicle sale, one area that continues to pose compliance challenges for dealerships is the correct way to offer a warranty. While the concepts in this area are relatively straightforward, the issue becomes complicated because of the various federal and state regulations that often have an overlapping effect on the subject matter. The Uniform Commercial Code, the Magnuson-Moss Warranty Act, and the FTC Used Car Rule each impose specific requirements on dealerships when offering or disclaiming warranties. In addition, state UDAP statutes generally require that every retail sale of a motor vehicle be preceded by a written contract that contains all of the agreements of the parties, including all material statements, oral or written, made prior to obtaining the customer’s signature on the contract. With respect to the sale of a used motor vehicle, the Buyers Guide is perhaps the key document concerning warranty issues and can provide the dealer with a roadmap to the other warranty related disclosures and documents that must be used in the transaction. Despite the fact that the Federal Trade Commission has issued a publication, A Dealer’s Guide To The Used Car Rule, which provides a copy of the proper format for the Buyers Guide and covers in detail many of the issues pertaining to proper completion of the Buyers Guide, our review of Buyers Guides submitted from motor vehicle dealerships across the Country indicates that dealers are still having numerous compliance problems. (More …)
