for Buying a Used Car
out the cars repair record, maintenance costs, and safety
and mileage ratings in consumer magazines or online. Look up the
"blue book" value, and be prepared to negotiate the price.
from a dealer? Look for the Buyers Guide. Its required by
a federal regulation called the Used Car Rule.
sure all oral promises are written into the Buyers Guide.
the right to see a copy of the dealers warranty before you
are included in the price of the product; service contracts cost
extra and are sold separately.
the cars maintenance record from the owner, dealer, or repair
drive the car on hills, highways, and in stop-and-go traffic.
the car inspected by a mechanic you hire.
out the dealer with local consumer protection officials.
buy a car "as is," youll have to pay for anything
that goes wrong after the sale.
Car Rule generally doesnt apply to private sales.
car dealers who sell used vehicles must comply with the Federal
Trade Commissions (FTC) Used Car Rule. In fact, car dealers
who sell more than five used vehicles in a 12-month period must
comply with the Rule. Banks and financial institutions are exempt
from the Rule, as are businesses that sell vehicles to their employees,
and lessors who sell a leased vehicle to a lessee, an employee of
the lessee, or a buyer found by the lessee.
Car Rule applies in all states except Maine and Wisconsin. These
two states are exempt because they have similar regulations that
require dealers to post disclosures on used vehicles. The Rule applies
in the District of Columbia, Puerto Rico, Guam, the U.S. Virgin
Islands, and American Samoa.
post a Buyers Guide before you "offer" a used vehicle
for sale. A vehicle is offered for sale when you let a customer
inspect it for the purpose of buying it, even if the car is not
fully prepared for delivery. This requirement also applies to used
vehicles for sale on your lot through consignment, power of attorney,
or other agreement. At public auctions, dealers and the auction
company must comply. The Rule does not apply at auctions that are
closed to consumers.
titled or not, any vehicle driven for purposes other than moving
or test driving, is considered a used vehicle, including light-duty
vans, light-duty trucks, demonstrators, and program cars that meet
the following specifications:
vehicle weight rating (GVWR) of less than 8,500 pounds;
a curb weight of less than 6,000 pounds; and
a frontal area of less than 64 square feet.
Exceptions to the Rule are:
any vehicle sold for scrap or parts if the dealer submits title
documents to the appropriate state authority and obtains a salvage
The Buyers Guide
document that gives consumers important purchasing and warranty
information, the Buyers Guide tells consumers:
the vehicle is being sold "as is" or with a warranty;
what percentage of the repair costs a dealer will pay under warranty;
that oral promises are difficult to enforce;
to get all promises in writing;
to keep the Buyers Guide for reference after the sale;
the major mechanical and electrical systems on the car, as well
as some of the major problems that consumers should look out for;
to ask to have the car inspected by an independent mechanic before
If you conduct a used car transaction in Spanish, you must post
a Spanish language Buyers Guide on the vehicle before you offer
it for sale.
Guide must be posted prominently and conspicuously on or in a vehicle
when a car is available for sale, and in such a way that both sides
are readable. That means you can hang the Guide from the rear-view
mirror inside the car or on a side-view mirror outside the car.
The Guide also can be attached to a side window. A Guide in a glove
compartment, trunk or under the seat is not conspicuous.
remove the Guide for a test drive, but you must replace it as soon
as the test drive is over.
At the top of the Guide, fill in the vehicle make, model, model
year, and vehicle identification number (VIN). Write in a dealer
stock number if you wish.
On the back of the Guide, fill in the name and address of your dealership
and the name and telephone number of the person the consumer should
contact with complaints. You may use a rubber stamp or preprint
your Guide with this information.
You may include a signature line on the Guide and you may ask the
buyer to sign to acknowledge that he or she has received the Guide.
If you opt for a signature line, you must include a disclosure near
it that says: "I hereby acknowledge receipt of the Buyers Guide
at the closing of this sale." This language can be preprinted
on the form. The signature line and the required disclosure must
appear in the space provided for the name of the individual to be
contacted in the event of complaints after the sale.
Guide has two versions: One says "As Is-No Warranty;"
the other says "Implied Warranties Only."
As Is-No Warranty. If state law allows it, and you choose not to
offer a warranty written or impliedyou must use the
"As Is" version and check the box next to the heading
"As Is-No Warranty" on the Guide.
Implied Warranties Only. In states that limit or prohibit the elimination
of implied warranties, you must use the "Implied Warranties
Only" version and check the box next to the "Implied Warranties
Only" heading if you dont offer a written warranty. (See
Warranty. If you offer the vehicle with an express warranty, you
must check the box next to the heading "Warranty" and
complete that section of the Guide. Warranties required by state
law must be disclosed in this section. Your state Attorney General
can tell you about state warranty requirements.
State Law. In some states, use of the "As Is-No Warranty"
Buyers Guide may be legally sufficient to eliminate implied warranties.
In other states "as is" sales are allowed only if specific
action is taken or certain language is used. For example, some states
may require you to eliminate implied warranties by using special
language and/or a document other than the Guide.
not sure which version of the Buyers Guide you should use or if
you have questions about state requirements, contact the FTC or
your state Attorney General.
Warranty "Full" or "Limited"?
For a warranty to be considered "full":
service must be provided to anyone who owns the vehicle during the
Warranty service must be provided free of charge when necessary,
even for services like removing and reinstalling a system covered
by the warranty.
The consumer must be able to choose either a replacement or a refund
if the vehicle cant be repaired after a reasonable number
The consumer is not required to take any action to receive service,
except to give notice that service is needed. Service must be rendered
after notice unless the warrantor can demonstrate that it is reasonable
to require consumers to do more than give notice.
The length of implied warranties must not be limited.
The warranty is considered "limited" if any of these conditions
Percentage of Costs Does the Warranty Cover?
Fill in the percentage of parts and labor costs covered by the warranty
in the spaces provided. If a deductible applies, put an asterisk
next to the number and explain the deductible in the "systems
covered/duration" section. For example, "*A $50 deductible
applies to each repair visit." (See the sample.)
systems are Covered? For How Long?
Theres one column to list the systems covered, and another
to list the length of the warranty for each system. In the left
hand column, you must specify each system thats covered by
the warranty. The Rule prohibits the use of shorthand phrases such
as "drive train" or "power train" because its
not always clear what specific components are included.
right hand column, you must state the length of the warranty for
each system. If all systems are covered for the same length of time,
you may state the duration once.
if the Manufacturer's Warranty Still Applies?
If the manufacturers warranty hasnt expired, disclose
this fact by checking the "Warranty" box and including
this disclosure in the "systems covered/duration" section:
"MANUFACTURERS WARRANTY STILL APPLIES. The manufacturers
original warranty has not expired on the vehicle. Consult the manufacturers
warranty booklet for details as to warranty coverage, service location,
consumer must pay to get coverage under the manufacturers
warranty, you may not check the "Warranty" box. Such coverage
is considered a service contract. However, you may check the "warranty"
box if you pay for coverage from the manufacturer and the consumer
doesnt have to pay anything more than the price of the vehicle
to get the coverage. If you provide a warranty in addition to the
unexpired manufacturers warranty, explain the terms of your
warranty on the Buyers Guide. (Sample Warranty)
Should Negotiated Warranty Changes Be Included?
If you and the consumer negotiate changes in the warranty, the Buyers
Guide must reflect the changes. For example, if you offer to cover
50 percent of the cost of parts and labor for certain repairs, but
agree to cover 100 percent of the cost of parts and labor after
negotiating with the customer, you must cross out the "50 percent"
disclosure and write in "100 percent." Similarly, if you
first offer the vehicle "as is" but then agree to provide
a warranty, you must cross out the "As Is-No Warranty"
disclosure and complete the "Warranty" section of the
Buyers Guide properly.
About Service Contracts?
If you offer a service contract for repairs, check the box next
to the words "Service Contract." However, if your state
regulates service contracts as the "business of insurance,"
you dont have to check this box. Check with your Attorney
General or state insurance commissioner to find out if your state
regulates service contracts.
Do I Have to Give the Buyer at the Sale?
You must give the buyer the original or a copy of the vehicles
Buyers Guide at the sale. The Guide must reflect all final changes.
(Completed samples of the Buyers Guide)
offer a written warranty or if the manufacturers warranty
still applies, you also must comply with the Magnuson-Moss Warranty
Act and other FTC Rules, including the "Warranty Disclosure
Rule." The Warranty Act prohibits you from eliminating implied
warranties when you provide a written warranty. It also requires
you to identify your warranty as either "full" or "limited."
The Warranty Disclosure Rule requires your warranty to be clear
and easy to read, and to include certain information about the coverage
of the warranty.
information you provide on the Buyers Guide is not sufficient to
meet federal disclosure requirements for written warranties. Therefore,
your written warranty and the Buyers Guide should be two separate
documents. Another federal Rulethe FTCs Rule on Pre-Sale
Availability of Written Warranty Termsrequires that you make
written warranties available to consumers before they buy.
are available to help you comply with these and other federal regulations
on warranties: A Businesspersons Guide to Federal Warranty
Law and A Legal Supplement to Federal Warranty Law. Both are available
from the FTC. Write to: Consumer Response Center, Federal Trade
Commission, Washington, D.C. 20580, or call toll-free: 1-877-FTC-HELP
(382-4357); TDD: 202-326-2502.
Can I Get Copies of the Guides?
You can get Buyers Guides from business-form companies or trade
associations, or generate them yourself on a computer. However,
you must use the wording, type style, type sizes, and format specified
in the Rule. The Guides must be printed in 100% black ink on white
paper cut to at least 11" x 7¼". You may use colored
ink to fill in the blanks.
complete a Buyers Guide properly for each used vehicle offered for
post the Buyers Guide prominently and conspicuously on each used
vehicle you offer for sale?
choose to include a signature line for the buyers signature,
do you include the following required disclosure language?
acknowledge receipt of the Buyers Guide at the closing of this sale.
put the following required disclosure in your sales contract?
you see on the window form for this vehicle is part of this contract.
Information on the window form overrides any contrary provisions
in the contract of sale.
give the vehicles Buyer Guide or a copy to the purchaser at
the time of sale and make sure it states the final negotiated warranty
sale is conducted in Spanish, do you use the Spanish language Buyers
offer a written warranty, do you prepare a warranty document that
complies with federal law? Is the warranty document available for
examination by potential buyers?
If I Don't Comply?
Dealers who violate the Used Car Rule may be subject to penalties
of up to $11,000 per violation in FTC enforcement actions. Many
states have laws or regulations that are similar to the Used Car
Rule. Some states incorporate the Used Car Rule by reference in
their state laws. As a result, state and local law enforcement officials
may have the authority to ensure that dealers post Buyers Guides
and to fine them or sue them if they do not comply.