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. Read the rest of this entry →

From my Auttr messages this morning: Keith, a quick question for the Car Counselor: Can the copy of the FTC Sticker be used as the warranty document I give to the customer or do I need something else? Isn’t there another law that applies?

No, you cannot use the FTC Sicker for that purpose. The Magnuson-Moss Warranty Act covers written warranties and requires manufacturers and sellers of consumer products to provide consumers with detailed information about the warranty coverage for those products. The Act requires the written warranty to disclose: specific information, clearly and conspicuously, in a single document, using simple and readily understood language