Attorneys General Urge FTC to Tighten Used-Car Rule Standards

November 26, 2008

Email this story Printer Friendly Version

WASHINGTON, D.C. — The National Association of Attorneys General recently suggested that the Used Vehicle Trade Regulation Rule needs some "tuning" to become more effective. So, the organization has taken action.

Forty-two attorneys general across the nation have signed a proposal urging the Federal Trade Commission to amend the rule, which commonly referred to as the Used Car Rule.

In a proposal recently sent to the FTC, they emphasized the need for dealers to disclose more information regarding vehicle history and prior use on the buyer's guides displayed on used vehicles.

As it stands, the Used Car Rule only mandates that buyer's guide notices let consumers know if a model is covered under a warranty or sold as-is.

"Laws are like cars; they need regular maintenance to make sure they're operating effectively," Washington Attorney General Rob McKenna stated. "The federal Used Car Rule is rusty and needs tuning to perform properly for consumers."

The association argued that the value of the rule "is limited," because it does not require dealers to include such information as the vehicle's history and prior use, prior title status, damage history and whether it was repurchased by an OEM as part of a lemon law.

"Nothing diminishes the market value of a used vehicle more than detrimental history," commented Iowa Attorney General Tom Miller, who wrote the proposal. "The rule should go farther. Warranty information is valuable for used-car buyers, but prior damage information is at least as important.

"It's a crucial fact for determining the value of a vehicle, and it's a crucial safety consideration, as well," he noted.

In other words, these damaged autos may also be unsafe and unfit to drive.

"Withholding information that is readily available can lead to deceptive sales practices by unscrupulous dealers and pose safety hazards to consumers," explained Jack Conway, Kentucky's attorney general.

The attorneys general argued that altering buyer's guides in order to require prior-damage information would help prevent fraud and omissions of material fact.

In Wisconsin, for instance, it is already mandatory for dealers to disclose history and damage information to be on their buyer's guides.

"There simply is no excuse for the national buyer's guide to fail to include vehicle history and title brand information," the attorneys general noted. "That information is readily available to dealers through private data sources and through title records accompanying vehicle they purchase at auction or take in trade.

"If Wisconsin dealers are required and can determine facts sufficient to make that disclosure, so too should dealers in the rest of the nation," the association added.

For more information, visit www.naag.org.

Used Car Manager