Shouldn’t they make it HARDER for car dealers to hide problems?

Ever buy a used car or know someone that did? Do you think the dealer should have tell you about problems they know about (think – rebuilt wrecks, flood vehicles)? The FTC is weakening the rule that applies to the information that car dealers must share with you, when they sell you a used car. A little background – the FTC created the administrative rule that requires car dealers to post a window sticker on every used car that is for sale.  This sticker is commonly referred to as the Consumer’s ‘Buyer’s Guide.’  It’s the window sticker you see (or should see) on every used car with the two big boxes that say “As Is” or “Warranty.” One of the boxes must be checked.  This information is important, because it becomes part of your contract with the dealership if you buy that vehicle. If a warranty is part of the deal, the dealer must tell you what it will cover, how long it will last, and what (if anything) you have to pay to get repairs completed under the warranty.

The FTC is now considering the first major changes to be made to the Buyers Guide form in decades.  The proposed changes (which can be found HERE) have caused much hand-wringing in the advocate community, including a group of advocates who issued a press release at the end of 2012, which highlighted some of the worst aspects of the new rule. 

(Editor’s Note: For instance, the new rule proposes that the Buyer’s Guide will say “ THE DEALER WON’T PAY FOR ANY REPAIRS,” which is what is referred to in the attorney biz as ‘untrue.’  That’s because no matter what the Buyer’s Guide says, if the dealer lies to you about some kind of defect that they know about, you can actually sue them and make them pay for the repairs. Unfortunately, the instruction in the new Buyer’s Guide is misleading and could cause some buyers to shy away from trying to get a dealer to fix a car in a situation where they knew about the repairs.)

In 2008, no less that 40 State Attorneys General sent a comment to the FTC, indicating that not only should the Buyer’s Guide not be reduced; but it should go FARTHER and include actual defects that the dealer knows about.

(Editor’s Note:  The President of the National Auto Dealer’s Association told NBC news that any requirement to tell a potential buyer about a used car’s defects “does not help consumers to require dealers to disclose information about a vehicle that may not be available to a dealer or that may not be accurate.”  In other words, “since any bad information about a used car might not be 100% accurate, we’ll just ignore everything we know about it.”) 

The FTC is still accepting comments on this new proposed rule until the end of the day tomorrow.  The public comment period has been extended once, already.  So, it’s quite possible that the FTC is taking the complaints about the proposed rule to heart. If you’re interested, you can actually complain online, here.  It will only take you a few minutes, if want to tell the FTC what you think. 

It’s clear that the new rule will give dealers the ability to hide defects and malfunctions that they know about.  While there are good and honest car dealers out there, this is an incentive to those dealers who don’t care about you, or your family, or other motorists on the roadway to conceal information from you and turn a blind eye as soon as you pull a car they know is riddled with defects off the dealership lot.

To read more about the problems with the proposed changes, visit the Americans for Financial Reform website

Posted by: Amy Wells