NADA: FTC Keeps Dealer Sales Activities Out of Potential Cooling-Off Rule Adjustments


The Federal Trade Commission recently completed its systematic review of the Cooling-Off Rule and determined that no changes to the rule are warranted that would have impacted dealers.

In making this determination, the National Automobile Dealers Association indicated the FTC rejected several proposed changes to the rule that would have affected dealers, including a proposal to expand the rule's scope to apply to the sale of used vehicles at a dealer's premises.

The only adjustment FTC officials are considering is potentially increasing the monetary threshold at which the rule applies.

NADA explained the Cooling-Off Rule requires sellers who are engaged in door-to-door sales of consumer goods or services with a purchase price of $25 or more to provide the buyer with certain oral and written disclosures regarding the buyer's right to cancel the contract within three business days from the date of the transaction.

Door-to-door sales include those made at a place other than the seller's place of business.

However, the rule does not apply to "sellers of automobiles, vans, trucks or other motor vehicles sold at auctions, tent sales or other temporary places of business, provided that the seller is a seller of vehicles with a permanent place of business," FTC officials said.

The FTC's sole proposed change to the rule would increase the threshold at which the rule applies from $25 to $130 to account for inflation that has occurred since the FTC first issued the rule in 1972.

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