By Michael G. Charapp
Charapp & Weiss LLP
The original Used Car Rule was promulgated by the Federal Trade Commission in 1985. While there are few dealership employees who were active before the Rule was put in place, there is still some confusion surrounding the completion of the buyer’s guide. This was caused in part in early 2017 when the Rule was revised, and the buyer’s guide was redesigned.
Do your personnel understand the dealership’s obligations under the Rule?
- What vehicles must have a buyer’s guide?
- What form should you use?
- How should the form be completed for each vehicle?
- Is the customer given the form upon delivery?
- Do you keep a signed copy of the form? (a signature by the customer is required in Virginia.)
The Rule is enforced by the FTC. In the past, FTC visits to audit Used Car Rule compliance led to counseling letters to help dealers improve compliance. But this is a different FTC, and audits are likely to lead directly to legal actions to put dealers under orders with the FTC that they comply with the Rule or suffer fines.
FTC enforcement should not be the only concern of dealers, however. While private litigants cannot sue to enforce the Rule, plaintiffs’ attorneys have become adept at using used car buyers’ guides, or the lack thereof, in lawsuits challenging the quality of vehicles sold to their clients.
The FTC buyers guide is something a consumer expects to see on the window of a used vehicle. It is something a plaintiff’s attorney expects to see in litigation over the quality of a used vehicle, and the failure to have a copy signed by the customer in the deal file turned over in discovery is a problem. That is likely to lead to testimony by a plaintiff of ignorance about the details of the used vehicle because a used car buyer’s guide was not displayed and provided at delivery.
Give careful attention to compliance with the FTC Used Car Rule. Accompanying this story is a checklist for compliance with the Rule. Use it as a guide to ensure each covered vehicle has a buyer’s guide properly completed.