Short Cuts March 2013

FTC Requests Public Comments on Used Car Rule Revisions

On December 4, 2012, the FTC sought public comment on proposed changes to the Used Car Buyers Guide required by the Used Car Rule.  In effect since 1985 and last amended in 1995, the FTC has concluded that the Rule benefits consumers and will be retained.

Proposed changes to the Buyers Guide include:  (1) adding a statement encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories; (2) adding a statement in Spanish directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire; (3) adding catalytic converters and airbags to the List of Systems on the back of the Buyers Guide; and (4) placing boxes on the back of the Buyers Guide where dealers will have the option to indicate whether (a) the manufacturer’s warranty still applies, (b) a manufacturer’s used vehicle warranty, such as a manufacturer’s certified used car warranty, applies, or (c) some other used vehicle warranty applies.   Additionally, there are proposed minor changes to improve readability of the Buyers Guide.   

Consumer advocates urged FTC to require dealers to reveal vehicle history information such as whether a vehicle was ever declared an insurance loss because of a flood or collision on the Buyers Guide rather than having customers find that information on their own.  The FTC did not follow this approach in the proposed revision.

Show Those Buyers Guides!  

Last month, the FTC warned eleven Jonesboro, Arkansas used car dealers that they were in violation of the FTC’s Used Car Rule for failing to display Buyers Guides.   This is a signal of the FTC’s view of the continuing importance of the Used Car Rule.  Dealers should have a procedure for checking their compliance with the Rule.

Relative Collision Insurance Cost Information Repealed

Dealers no longer must provide Relative Collision Insurance Cost Information booklets to their customers or face a $1,000 per violation fine for the failure to do so.   A law was passed by the House in July, the Senate in December, and signed by President Obama on January 11, 2013 that repeals the requirement that car dealerships display this booklet provided by the National Highway Traffic Safety Administration (NHTSA).    The Government found that customers rarely used or even asked for these booklets because insurance agents, who are trained on how model selection affects insurance premiums, can better advise consumers. 


GM is circulating to dealers notices of change to each dealers’ APR/AGSSA. This territory can be important to the measurement of sales effectiveness of the dealership. GM claims that the changes are simply the result of realignment of census tracts as a result of the 2010 census. A GM dealer should take the time to carefully review the new APR/AGSSA maps. A dealer who feels that the new designation is not appropriate should take the time to notify GM and ask for a further review.