FTC Used Car Rule - Part 1

by: AFI

Franchised dealers who sell used vehicles must comply with the Federal Trade comission's Used Car Rule including dealers who sell more than five vehicles in a twelve month period. Financial institutions and banks are exempt from the rule.

The used 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, the U.S. Virgin Islands, Guam, and American Samoa.

You must display a Buyers Guide before you "offer" a used vehicle for sale. A vehicle is offered for sale when you display it for sale or let a customer inspect it for the purpose of buying it, even if the car is not ready for delivery. At public auctions, dealers AND the auction company must comply. The rule does not apply to auctions that are closed to consumers.

Exceptions to the rule are: Motorcycles; Any vehicle sold for scrap or parts; Agricultural equiptment.


THE BUYERS GUIDE is a disclosure document that gives consumers important purchasing and warranty information, the Buyers Guide discloses to consumers:
* whether 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 independant mechanic before they buy.


If a used car transaction is conducted in Spanish, a Spanish language Buyers Guide must be posted on the vehicle before it can be displayed or offered for sale.


The Buyers Guide must be posted PROMINENTLY and CONSPICUOUSLY on or in a vehicle when a car is available for sale. This means it must be in plain view with both sides visible. You can hang the Guide from the rear-view mirror inside the car or from the side-view mirror outside the car. It can also be placed under a windshield wiper. A guide also can be attatched to a side window. A guide cannot be placed under a seat or in the glove compartment because it is not in plain sight.

The Guide can be removed for a test drive, but must be replaced as soon as the test drive is over.


The FTC publishes a free booklet that defines the Rule's requirements. For samples of the legal forms go to: www.ftc.gov/bcp/conline/pubs/buspubs/usedcarc.htm