2015 GNYADA MEMBERSHIP DIRECTORY

to the product; disclose clearly that the purchase of the product is voluntary and not required; make all legally required disclosures in a clear manner and at reasonable speed; and after disclosures are read, require the customer to acknowledge the purchase is voluntary and that the customer affirmatively requests or consents to purchase the product. If the product has a cancellation or refund policy, the dealer must disclose the policy and give the phone number to cancel and the time in which to get a refund. The customer’s purchase and means of payment must also be disclosed and confirmed. If paying by credit card, the customer must give the full credit card number for payment to the sales representative.

HOT TOPICS 2015 GNYADA Membership Directory 103

Advertising Laws and Regulations FTC Used Car Rule

The FTC Used Car Rule requires auto dealers to prominently and conspicuously post a “Buyer’s Guide”to keep in plain view on all used vehicles offered for sale. The notice must be placed on the vehicle before the used vehicle is offered for sale. The Used Car Rule defines a “used car” as any car that has been driven more than necessary to move it or for road testing prior to delivery to a consumer. This would include many “demo” models used for customer test drives. The Buyer’s Guide must disclose whether the vehicle is being sold “as is” or with a warranty. If it is sold with a warranty, the Buyer’s Guide must state the general terms of the warranty, including whether it is full or limited; the specific systems covered (engine, transmission, etc.); a list of parts or systems not covered if necessary for clarity (e.g., a battery); what percentage of repair costs the dealer will pay under the warranty; an explanation of how the customer gets warranty service; and who to see about complaints. State law governs the legal requirements for disclaiming warranties. The Buyer’s Guide must also tell consumers that oral promises are difficult to enforce and to get all promises in writing, the major mechanical and electrical systems on the car that are covered by the warranty, the major problem areas that consumers should look for, and to ask to have the car inspected by an independent mechanic before they buy. If a used car transaction is negotiated in Spanish, the dealer must post a Spanish language Buyer’s Guide. The Buyer’s Guide becomes part of the sales contract and the disclosures cannot be contradicted orally or in writing. In addition to the Buyer’s Guide, the dealer must provide a separate warranty document unless the dealer is not selling the used vehicle with its own warranty. A dealer who sells a car with only the remaining manufacturer’s warranty, if that still applies, may simply state that clearly on the Buyer’s Guide. The Buyer’s Guide is not a warranty document. The FTC is actively monitoring dealers’ compliance with the Used Car Rule. In 2013, the FTC issued warnings to 11 dealers in Arkansas that FTC staff inspections in Jonesboro, Arkansas found that eight dealers failed to display Buyers Guides on almost all used cars offered for sale, and three dealers failed to display the guides on a significant number of used cars. The warnings reiterated the need for posting the Guides on all cars and indicated that further violations

could be considered an unfair or deceptive trade practice under Section 5 of the FTC Act. A year later, the FTC returned to the dealerships and found one of them that was still not displaying Used Car Buyers Guides on all