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Used Car Rule

Auto dealers face a multitude of compliance issues on a daily basis. Here is brief summary of one of those issues, the Used Car Rule. Please note, this is not legal advice and dealers should always seek the assistance of qualified legal counsel.

November 5, 2010
2 min to read


The Used Car Rule “requires clear disclosure through a window sticker, called the ‘Buyers Guide,’ of any warranty coverage and the terms and conditions of any dealer-offered warranty, including the duration of warranty coverage and the percentage of total repair costs that the dealer will pay. The Rule also requires certain additional disclosures on the Buyers Guide, including: a suggestion that consumers ask the dealer if a pre-purchase inspection is permitted; a warning against reliance on spoken promises that are not confirmed in writing; and a list of the fourteen major systems of an automobile and defects that can occur in these systems.

In addition, the Rule provides that the Buyers Guide disclosures are incorporated into the sales contract. … The Rule also requires dealers to give a copy of the Buyers Guide reflecting the final warranty terms to the purchaser.

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When the used car transaction is conducted in Spanish, the Rule requires that the dealer display a Spanish-language version of the Buyers Guide on the vehicle prior to offering the vehicle for sale.” [1]

Penalties for non-compliance: “Dealers who violate the Used Car Rule may be subject to penalties of up to $16,000 per violation in FTC enforcement actions.” [2]

Helpful link(s)/Source(s):
1. http://www.ftc.gov/bcp/guides/usedcar-comply.shtm
2. http://www.ftc.gov/bcp/edu/pubs/business/autos/bus13.shtm

Please note: This is not legal advice and dealers should always seek the assistance of qualified legal counsel.

From "19 Laws, Rules and Regulations That Can Cost You More Than Money" in the September 2010 issue of Auto Dealer Monthly.

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