Revised Used Car Rule brings new dealer responsibilities
The Federal Trade Commission (FTC) issued a revised Used Car Rule on January 27, 2017 with which all dealers must comply. The requirement to post Buyers Guides on all used cars for retail sale has not changed, but the Guide itself has changed. Dealers have two options for compliance in the near term. After January 27, 2018, all dealers must use the revised Guide.
Recommended option: Under this approach, dealers use the form redesigned by the FTC. In the revised form, dealers can no longer check a box saying the vehicle is being sold with a limited warranty. With the new form, if there is no dealer warranty, a dealer must mark the box stating that the vehicle is being sold as is (or with implied warranties only in Maryland), with disclosure of the available non-dealer warranty in the space provided below that.
Other changes in the rule are as follows:
In describing the systems covered by a dealer warranty, the dealer can no longer simply list powertrain. The individual components must be listed engine, transmission, differential.
The new, required language inviting the customer to review the non-dealer warranty and its terms means the dealer should have a copy of the warranty. Disclosure of coverage remaining on the manufacturerês original warranty is optional. But disclosure of the availability of a service contract (if there is one) is mandatory.
The formês reverse must also be completed. The dealer name, address and contact for complaints must be listed. Any signature on the form should be on the reverse. Virginia requires the buyerês signature on the reverse, with the language, I hereby acknowledge receipt of the Buyers Guide at the closing of this sale.
Option 2: Alternatively, dealers may continue to use up remaining stock of the former Buyers Guide form until January 27, 2018. On vehicles where manufacturerês warranty still applies, or there is a manufacturerês certified warranty, or one not backed by the dealer, the following statement must be made: Ask the dealer for a copy of the warranty document and an explanation of warranty coverage, exclusions, and repair obligations.[I]Thanks to Michael Charapp of Charapp and Weiss, LLP for this important update.[/I] Download Bulletin PDF