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The Used Car Rule

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While many of the laws that protect consumers from fraud when purchasing used cars are passed by state legislatures, a number of rules were also put in place by the federal government. For instance, the Federal Trade Commission (FTC) enforces a federal regulation known as the Used Car Rule, which requires dealerships to disclose certain information to potential buyers. Dealers who fail to comply with these rules can be held liable for any related financial losses, so if you were recently defrauded by a used car dealership, it is critical to speak with an experienced used car fraud attorney who can explain your legal options.

What is the Used Car Rule? 

The Used Car Rule is a federal regulation that prohibits dealerships from making false statements or material representations to potential buyers, while also generally barring the use of any unfair or deceptive practices when selling a used vehicle. To help ensure that consumers are aware of these rights, the FTC also requires dealerships to post a specific type of notice in the windows of any vehicles that qualify as used and are being offered for sale. When it comes to defining what counts as a used vehicle, it’s important to note that whether or not a car was previously titled, any vehicle that was driven for purposes other than test driving or moving qualify as used vehicles. This includes light-duty vans and trucks, demonstrators, and program cars, as long as they have:

  • A gross vehicle weight rating of less than 8,500 pounds;
  • A frontal area of less than 46 square feet; and
  • A curb weight of less than 6,000 pounds.

However, this does not include motorcycles, agricultural equipment, or any vehicles that are sold for scrap or parts.

The Buyer’s Guide 

One of the Used Car Rule’s most important requirements is that used car dealerships post notices in all of their vehicles that are being offered for sale. These notices must:

  • Provide the dealer’s name and contact information, as well as the make, year, model and VIN of the vehicle in question;
  • Describe the terms of any express warranties, including the extent and duration of coverage, unless no warranties are offered, in which case, the notice must expressly state this fact;
  • Explain whether a manufacturer’s warranty is in effect and if so, for how long;
  • Indicate whether the dealer is offering the vehicle for sale “as is” or is otherwise disclaiming any implied warranties; and
  • Identify any service contracts that are available for the car.

Most used car dealerships are required to comply with this rule. In fact, dealers who offer more than five used vehicles for sale over a one year period must follow the Used Car Rule. Companies that sell vehicles to their employees, as well as lessors who sell a leased car to a lessee, a buyer found by the lessee, or an employee of the lessee, however, are exempt from this rule. Banks and financial institutions are also not required to adhere to the terms of this regulation.

Call Today for Help with Your Case  

Please contact Louis S. Schwartz at CONSUMERLAWPA.com in Philadelphia to discuss your disclosure-related questions and concerns with an experienced used car fraud attorney.

Resources:

ftc.gov/tips-advice/business-center/guidance/dealers-guide-used-car-rule

ecfr.gov/cgi-bin/text-idx?SID=1a09cf0afb96ef4068e8b72894fe6f11&node=pt16.1.455&rgn=div5

https://www.consumerlawpa.com/non-disclosure-and-affirmative-misrepresentations-by-used-car-dealers/

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