Used Car Fraud

Posted on May 13, 2011 by Dana Manner No Comments

Federal Trade Commission’s Trade Regulation Rule Concerning the Sale of Used Motor Vehicles (the “Rule” or “Used Car Rule”), 16 CFR Part 455, which was promulgated on November 19, 1984.

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The Used Car Rule became effective on May 9, 1985. Violations of the Rule can result in the imposition of civil penalties of up to $10,000 per violation.

The Buyers Guide – Section 455.2 of the Rule requires dealers to prepare and display a window sticker called the “Buyers Guide” before offering a used vehicle for sale to a consumer. The Buyers Guide must disclose whether any warranty is offered and the basic terms of any warranty. If the dealer does not provide an express warranty, then the Buyers Guide must indicate that the vehicle is being offered for sale “as is” (with no express or implied warranties), or with only the applicable “implied warranties” required by state law. Each of these terms is explained on the Buyers Guide.

The Buyers Guide also includes several additional disclosures, including: A list of the fourteen major systems of an automobile and defects that can occur in these systems; a suggestion that consumers ask the dealer if a pre-purchase inspection is permitted; and a warning against reliance on spoken promises that are not confirmed in writing. Finally, at the time of sale, the dealer must give the buyer the original Buyers Guide (or an accurate copy) that was displayed on the vehicle. This Buyers Guide must reflect the final warranty terms agreed on between the buyer and seller.

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