2018 GNYADA Membership Directory

the dealer must post a Spanish language Buyer’s Guide. In addition, the English version of the Guide must advise Spanish speakers, in Spanish, to ask for the Spanish version. 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. The Buyer’s Guide is not a warranty document. The Buyer’s Guide also includes a non-dealer warranties section for a dealer to disclose whether the original manufacturer’s warranty, manufacturer’s used vehicle warranty, or other used vehicle warranty applies. A dealer may also disclose whether a service contract is available to purchase in this section. The FTC is actively monitoring dealers’ compliance with the Used Car Rule. In 2013, the FTC issued warnings to several dealers after FTC staff inspections had found that a number of dealers failed to display Buyer’s Guides on many or almost all used cars they offered for sale. The FTC warnings indicated that further violations could be considered unfair or deceptive practices under Section 5 of the FTC Act. A year later, the FTC returned to the dealerships and found that one of them was still not displaying Buyer’s Guides on some of their cars. The FTC filed a lawsuit against the dealer and its principals in federal court, and a settlement was reached requiring them to pay $90,000 in civil penalties and submit compliance reports to the FTC for 10 years. The Used Car Rule applies in all states except Maine andWisconsin, both of which have enacted their own state law provisions that require notices with additional disclosures for used car sales in these states. Magnuson-Moss Warranty Act (MMWA) This is a federal law that requires manufacturers and sellers to disclose information about warranties given with the sale of a product. Awarranty is a statement or representation, express or implied, about the character or quality of the goods sold. Express warranties result from statements or affirmations made about a product that the buyer relies upon in deciding to purchase. The MMWA covers written express warranties. Implied warranties derive from state law and automatically attach to the vehicle from the sale, such as an implied warranty of merchantability, which is a promise the vehicle will perform in a manner fit for its usual and ordinary purposes. The MMWA requires any written warranty to be clearly and conspicuously labeled as “full” or “limited” and be described in a single, easy-to-read document and to state any qualifications to the warranty (such as the consumer performing scheduled maintenance) with the full warranty terms available. At minimum, the document must describe who is making the warranty; when the warranty begins and ends; what is covered and what is not; what the warrantor will do if there is a problem; and how the consumer can obtain warranty service. It must also indicate that the consumer may have additional rights under state law and contain the following specific disclosures: “This warranty gives you specific legal rights, and you may also have other rights which vary from state to state. Some states do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply to you.”If a dealer sells the customer its own service contract within 90 days of the vehicle sale (as opposed to the consumer purchasing a service contract from a third party), the dealer cannot disclaim any implied warranties, but the duration of implied warranties can be limited under certain circumstances. A common misconception concerns the concept of a warranty versus an “extended warranty” or service contract. For a new car, a warranty is included in the vehicle price and it provides the customer a right from themanufacturer to obtain certain repair services that must be adequately described under MMWA. Manufacturer warranties do not cover aftermarket products such as dealer-added equipment. Some vehicle manufacturers permit transfer of

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