Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-3_14-cv-00063/USCOURTS-ared-3_14-cv-00063-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:0045 Federal Trade Commission Act

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A

Dealer’s

Guide

Federal Trade Commission

to

the Used Car Rule

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of buying it, even if the car is not fully prepared for delivery. This requirement also 

applies to used vehicles for sale on your lot 

through consignment, power of attorney, or 

other agreement. At public auctions, dealers and the auction company must comply. 

The Rule does not apply at auctions that are 

closed to consumers.

Previously titled or not, any vehicle driven 

for purposes other than moving or test driving, is considered a used vehicle, including 

light-duty vans, light-duty trucks, demonstrators, and program cars that meet the 

following specifications:

•	 a gross vehicle weight rating (GVWR)

of less than 8,500 pounds;

•	 a curb weight of less than 6,000 pounds;

and

•	 a frontal area of less than 46 square feet.

Exceptions to the Rule are:

•	 motorcycles;

•	 any vehicle sold for scrap or parts if the

dealer submits title documents to the 

appropriate state authority and obtains a 

salvage certification; and

•	 agricultural equipment.

Most car dealers who sell used vehicles must comply with the Federal Trade 

Commission’s (FTC’s) Used Car Rule. In

fact, car dealers who sell more than five 

used vehicles in a 12-month period must 

comply with the Rule. Banks and financial 

institutions are exempt from the Rule, as 

are businesses that sell vehicles to their 

employees, and lessors who sell a leased 

vehicle to a lessee, an employee of the lessee, or a buyer found by the lessee.

The Used Car Rule applies in all states

except Maine and Wisconsin. These two

states are exempt because they have similar 

regulations that require dealers to post disclosures on used vehicles. The Rule applies 

in the District of Columbia, Puerto Rico, 

Guam, the U.S. Virgin Islands, and American Samoa.

This booklet defines the Rule’s requirements, explains how to prepare and display 

the Buyers Guide, and offers a compliance

checklist.

You must post a Buyers Guide before you

“offer” a used vehicle for sale. A vehicle is 

offered for sale when you display it for sale 

or let a customer inspect it for the purpose 

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 30 of 53
2

Vehicle Information

At the top of the Guide, fill in the vehicle

make, model, model year, and vehicle identification number (VIN). Write in a dealer

stock number if you wish.

Dealer Information

On the back of the Guide, fill in the name

and address of your dealership. Also fill 

in the name (or position) and the telephone

number of the person the consumer should 

contact with complaints. You may use a 

rubber stamp or preprint your Guide with

this information.

Optional Signature Line

You may include a signature line on the 

Guide and you may ask the buyer to sign to

acknowledge that he or she has received the 

Guide. If you opt for a signature line, you

must include a disclosure near it that says: 

“I hereby acknowledge receipt of the Buyers Guide at the closing of this sale.” This

language can be preprinted on the form. 

The signature line and the required disclosure must appear in the space provided for 

the name of the individual to be contacted 

in the event of complaints after the sale.

The Buyers Guide

A disclosure document that gives consumers important purchasing and warranty 

information, the Buyers Guide tells consumers:

•	 whether the vehicle is being sold “as is”

or with a warranty;

•	 what percentage of the repair costs a

dealer will pay under warranty;

•	 that oral promises are difficult to enforce;

•	 to get all promises in writing;

•	 to keep the Buyers Guide for reference

after the sale;

•	 the major mechanical and electrical systems on the car, as well as some of the 

major problems that consumers should

look out for; and

•	 to ask to have the car inspected by an

independent mechanic before they buy.

If you conduct a used car transaction in 

Spanish, you must post a Spanish language

Buyers Guide on the vehicle before you display or offer it for sale. (See pages 12-13.)

The Buyers Guide must be posted prominently and conspicuously on or in a 

vehicle when a car is available for sale. 

This means it must be in plain view and 

both sides must be visible. You can hang 

the Guide from the rear-view mirror inside

the car or on a side-view mirror outside the 

car. You also can place it under a windsheld wiper.The Guide also can be attached

to a side window. A Guide in a glove

compartment, trunk or under the seat is not

conspicuous because it is not in plain sight.

You may remove the Guide for a test drive,

but you must replace it as soon as the test 

drive is over.

BUYERS GUIDE

AS IS - NO WARRANTY

WARRANTY

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Warranty Information

•	 The Buyers Guide has two versions:

One says “As Is-No Warranty;” the

other says “Implied Warranties Only.”

•	 As Is-No Warranty. If state law allows

it, and you choose not to offer a warranty — written or implied — you must 

use the “As Is” version and check the

box next to the heading “As Is-No Warranty” on the Guide. (See page 8.)

•	 Implied Warranties Only. In states

that limit or prohibit the elimination of 

implied warranties, you must use the 

“Implied Warranties Only” version and

check the box next to the “Implied Warranties Only” heading if you don’t offer 

a written warranty. (See page 10.)

•	 Warranty. If you offer the vehicle with

an express warranty, you must check 

the box next to the heading “Warranty”

and complete that section of the Guide.

Warranties required by state law must

be disclosed in this section. Your state 

Attorney General can tell you about

state warranty requirements.

State Law. In some states, use of the “As

Is-No Warranty” Buyers Guide may be

legally sufficient to eliminate implied warranties. In other states “as is” sales are allowed only if specific action is taken or certain language is used. For example, some 

states may require you to eliminate implied 

warranties by using special language and/or 

a document other than the Guide.

If you’re not sure which version of the

Buyers Guide you should use or if you have

questions about state requirements, contact 

the FTC or your state Attorney General.

Is the Warranty “Full” or “Limited”?

For a warranty to be considered “full:”

•	 Warranty service must be provided to

anyone who owns the vehicle during the 

warranty period.

•	 Warranty service must be provided free

of charge when necessary, even for 

services like removing and reinstalling a 

system covered by the warranty. 

•	 The consumer must be able to choose

either a replacement or a refund if the 

vehicle can’t be repaired after a reasonable number of tries.

•	 The consumer is not required to take

any action to receive service, except to 

give notice that service is needed. Service must be rendered after notice unless 

the warrantor can demonstrate that it is 

reasonable to require consumers to do 

more than give notice. 

•	 The length of implied warranties must

not be limited.

The warranty is considered “limited” if any 

of these conditions don’t apply.

What Percentage of Costs Does the 

Warranty Cover?

Fill in the percentage of parts and labor 

costs covered by the warranty in the spaces 

provided. If a deductible applies to repairs

made under the warranty, put an asterisk 

next to the number and explain the deductible in the “systems covered/duration” 

section. For example, “*A $50 deductible 

applies to each repair visit.” (See page 8.)

Warranties

Warranties

Warranties

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What Systems Are Covered? 

For How Long?

There’s one column to list the systems 

covered, and another to list the length of 

the warranty for each system. In the left

hand column, you must specify each system 

that’s covered by the warranty. The Rule 

prohibits the use of shorthand phrases such 

as “drive train” or “power train” because 

it’s not always clear what specific components are included in the “power train” or 

“drive train.”

In the right hand column, you must state

the length of the warranty for each system. 

If all systems are covered for the same

length of time, you may state the duration 

once.

What if the Manufacturer’s Warranty 

Still Applies?

If the manufacturer’s warranty hasn’t

expired, you may disclose this fact by 

checking the “Warranty” box and including

this disclosure in the “systems covered/duration” section: “MANUFACTURER’S

WARRANTY STILL APPLIES. The

manufacturer’s original warranty has not 

expired on the vehicle. Consult the manufacturer’s warranty booklet for details as to 

warranty coverage, service location, etc.” 

The disclosure must be stated in the exact 

language quoted above. Using phrases such

as “balance of factory warranty” are not 

sufficient.

If the consumer must pay to get coverage

under the manufacturer’s warranty, you 

may not check the “Warranty” box. Such

coverage is considered a service contract. 

However, you may check the “warranty” 

box if you pay for coverage from the manufacturer and the consumer doesn’t have to 

pay anything more than the price of the 

vehicle to get the coverage. If you provide

a warranty in addition to the unexpired 

manufacturer’s warranty, explain the terms 

of your warranty on the Buyers Guide. (See 

page 8.)

Where Should Negotiated Warranty 

Changes Be Included?

If you and the consumer negotiate changes

in the warranty, the Buyers Guide must

reflect the changes. For example, if you offer to cover 50 percent of the cost of parts 

and labor for certain repairs, but agree to 

cover 100 percent of the cost of parts and 

labor after negotiating with the customer, 

you must cross out the “50 percent” disclosure and write in “100 percent.” Similarly,

if you first offer the vehicle “as is” but then 

agree to provide a warranty, you must cross 

out the “As Is-No Warranty” disclosure

and complete the “Warranty” section of the

Buyers Guide properly.

What About Service 

Contracts?

If you offer a service contract for repairs,

check the box next to the words “Service

Contract.” However, if your state regulates 

service contracts as the “business of insurance,” you don’t have to check this box. 

Check with your Attorney General or state

insurance commissioner to find out if your 

state regulates service contracts as insurance.

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5

What Do I Have to Give 

the Buyer At the Sale?

You must give the buyer the original or a 

copy of the vehicle’s Buyers Guide at the

sale. The Guide must reflect all final 

changes. (Completed samples are shown on

pages 8 and 9.) If you include a signature

line on your Buyers Guides, make sure the

buyer signs the Guide that reflects all final

changes.

If you offer a written warranty, or if the

manufacturer’s warranty still applies, you 

also must comply with the Magnuson-Moss 

Warranty Act and other FTC Rules, including the “Warranty Disclosure Rule.”

The Warranty Act contains provisions that

establish consumers’ rights with respect to 

written warranties. For example, the Act 

prohibits you from eliminating implied 

warranties when you provide a written warranty.

The Warranty Disclosure Rule requires that

you disclose certain information about the 

coverage of your warranty and consumers’ 

rights under state law. This information 

must be included in a single document that 

is clear and easy to read.

Can the Buyers Guide 

Serve As My Written 

Warranty?

The warranty information you provide on 

the Buyers Guide is not sufficient to meet

the requirements of the Warranty Disclosure Rule. Therefore, your written warranty 

and the Buyers Guide must be two separate

documents.

Another federal rule — the FTC’s Rule on 

Pre-Sale Availability of Written Warranty

Terms — requires that you display written 

warranties in close proximity to the vehicle 

or make them available to consumers, upon 

request, before they buy.

Two publications are available to help you 

comply with these and other federal regulations on warranties: A Businessperson’s

Guide to Federal Warranty Law and A legal

Supplement to Federal Warranty Law. Both 

are available from the FTC. Call toll-free 

1-877-FTC-HELP (382-4357), or write:

Consumer Response Center, Federal Trade 

Commission, Washington, DC 20580. You

also will find the full text of these publications at www.ftc.gov.

What Disclosures Should I Make if 

I Offer a 50/50 Warranty or Another 

Type of Split Cost Warranty?

Split cost warranties are those under which

the dealer pays less than 100% of the cost 

for a warranty repair. This type of warranty 

includes 50/50 warranties where the dealer 

pays 50% of the cost for a covered repair 

and the buyer pays the remaining 50%. 

Another type of split cost warranty is one 

under which the buyer pays a deductible 

amount and the dealer pays the remaining 

cost for the repair.

If you offer a split cost warranty that requires you to pay a percentage of the repair 

cost for covered repairs, you should include 

the following disclosures in your warranty 

document:

•	 The percentage of the total repair cost

you will pay.

•	 The percentage of the total repair cost

the buyer must pay.

•	 How the total cost of the repair will be

determined. For example, your warranty 

might state: “The total cost of a warranty repair will be the retail price ABC 

motors charges for the same job.” As

another example, your warranty might 

state: “The total cost of a warranty 

repair will be determined by adding 

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 34 of 53
6

the dealer’s cost for parts to the labor 

cost. Labor will be billed at a rate of

________ per hour for the actual time 

required to complete the repair.” As 

a final example, your warranty might 

state: “If the work is done by an outside

repair shop, total cost of a repair will be 

the same price ABC Motors is charged 

by the outside shop. If the work is done

by ABC Motors, the total cost of the repair will be the same price ABC Motors 

charges non-warranty customers for the 

same job.”

If your warranty requires buyers to pay a

deductible, your warranty document should 

disclose the deductible amount and the 

details as to when and under what circumstances the deductible must be paid.

Dealers offering split cost warranties can 

require that buyers return to the dealer for 

warranty repairs. If your warranty includes this restriction, however, you should 

provide an estimate of the total repair cost 

before work is started. This will allow the 

buyer to decide whether to approve the 

repair or have the work done elsewhere.

Where Can I Get Copies of the Guides?

You can get Buyers Guides from businessform companies or trade associations, or 

you can download the Buyers Guide from

the FTC’s Web site. You also can generate them yourself on a computer. However, 

you must use the wording, type style, type 

sizes, and format specified in the Rule. You 

are not allowed to place any other wording 

or symbols (including logos) on the Buyers Guide. The Guides must be printed in

100% black ink on white paper cut to at 

least 11” x 71⁄4.” These requirements cannot be modified in any way. You may use 

colored ink to fill in the blanks.

How Am I Doing?

	Do you complete a Buyers Guide

properly for each used vehicle offered for sale?

	Do you post the Buyers Guide

prominently and conspicuously on 

each used vehicle you offer for sale?

	If you choose to include a signature

line for the buyer’s signature, do 

you include the following required

disclosure language:

I hereby acknowledge receipt of

the Buyers Guide at the closing

of this sale.

 Do you put the following required

disclosure in your sales contract:

	 The information you see on the

window form for this vehicle is

part of this contract. Information

on the window form overrides

any contrary provisions in the

contract of sale.

 Do you give the vehicle’s Buyers 

Guide or a copy to the purchaser

at the time of sale and make sure it 

states the final negotiated warranty 

coverage accurately?

 If a sale is conducted in Spanish, do

you use the Spanish language Buyers

Guide?

 If you offer a written warranty, do

you prepare a warranty document 

that complies with federal law? Is

the warranty document available for 

examination by potential buyers?

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 35 of 53
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What If I Don’t Comply?

Dealers who violate the Used Car Rule may

be subject to penalties of up to $16,000

per violation in FTC enforcement actions. 

Many states have laws or regulations that 

are similar to the Used Car Rule. Some

states incorporate the Used Car Rule by reference in their state laws. As a result, state 

and local law enforcement officials may 

have the authority to ensure that dealers 

post Buyers Guides and to fine them or sue

them if they do not comply.

Where Can I Get More 

Information?

If you have questions about the Used Car

Rule, contact the FTC and request a free 

copy of the Rule or staff compliance guidelines for the Used Car Rule; both documents explain some aspects of the Rule in 

more detail. You also can download these 

documents from the FTC’s Web site. The

FTC works for the consumer to prevent 

fraudulent, deceptive, and unfair business 

practices in the marketplace and to provide 

information to help consumers spot, stop, 

and avoid them. To file a complaint or 

to get free information on consumer issues, visit www.ftc.gov or call toll-free, 

1-877-FTC-HELP (1-877-382-4357); TTY:

1-866-653-4261. The FTC enters Internet,

telemarketing, identity theft, and other 

fraud-related complaints into Consumer 

Sentinel, a secure, online database available

to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Your Opportunity to 

Comment

The National Small Business Ombudsman

and 10 Regional Fairness Boards collect 

comments from small businesses about 

federal compliance and enforcement 

activities. Each year, the Ombudsman 

evaluates the conduct of these activities and 

rates each agency’s responsiveness to small 

businesses. Small businesses can comment

to the Ombudsman without fear of reprisal. 

To comment, call toll-free 1-888-REGFAIR

(1-888-734-3247) or go to www.sba.gov/

ombudsman.

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 36 of 53
8

Example of a Completed Buyers Guide

BUYERS GUIDE

IMPORTANT: Sp pref

______________________________________________________________________________________________________________

V

_______________________________________________________

DEAER

WARRANTIES FOR THIS VEHICLE:

AS IS - NO WARRANTY

YWILPAY

ar

WARRANTY

FULMITED ANTY. 

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law,i

SYSTEMS COVERED: DURATION:

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

_______________________________________ ___________________________________

SERV. 

coverae,blece

“id

PRE PUCHSPCT

MI

SEHEK 

or

Differential

Engine

Transmission & Drive Shaft

* A $50 deductible applies to 

 each repair visit.

100* 100*

90 days or 3,000 miles, whichever

comes first.

MANUFACTURER’S WARRANTY STILL APPLIES. The manufacturer’s original

warranty has not expired on the vehicle. Consult the manufacturer’s warranty 

booklet for details as to warranty coverage, service location, etc.

Chevrolet Cavalier 1995 IGIAD27P6DJ123456

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 37 of 53
9

Frame & Body

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____________________________________________________________________________________________________

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1000 Downtown Expressway

Lakeside, KS 02143

Reliable Used Cars

Stan Jones, General Manager, 202-916-4554

Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 38 of 53
10

Use this Buyers Guide if your state limits or prohibits “as is” sales.

BUYERS GUIDE

IMPORTANT: Sp pref

______________________________________________________________________________________________________________

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WARRANTIES FOR THIS VEHICLE:

IMPLIED WARRANTIES ONLY

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SYSTEMS COVERED: DURATION:

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SERV. 

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Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 39 of 53
11

Frame & Body

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Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 40 of 53
12

Buyers Guide in Spanish

GUíA DEL COMPRADOR

IME: L

esi

GARANTíA

NMEO DE

M

GAANT

 

SISTEMAS CUBIERTOS POR LA GARANTIA: DURACION:

 CONTRATO DE SERVICIO. Este vehículo tiene disponible un contrato de servicio a un precio adicional. 

Pida los detailes en cuanto a cobertura, deducible, precio y exclusiones. Si adquiere usted un contrato de 

servicio dentro de los 90 días del momento de la venta, las “garantías implícitas” de acuerdo a la ley del 

estado pueden concederle derechos adicionales.

INSPECCIÓN PREVIA A LA COMPRA: PREGUNTE AL VENDEDOR SI PUEDE USTED TRAER UN MECANICO 

PARA QUE INSPECCIONE EL AUTOMÓVIL O LLEVAR EL AUTOMÓVIL PARA QUE ESTE LO INSPECCIONE EN 

SU TALLER.

VéASE EL DORSO DE ESTE FORMULARIO donde se proporciona información adicional importante, 

incluyendo una lista de algunos de los principales defectos que pueden ocurrir en vehículos usados.

VéA EL OTRO LADO PARA INFORMACIÓN ADICIONAL.

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COMO ESTá - SIN GARANTíA

USED PAGAODOS 

a n

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Case 3:14-cv-00063-BRW Document 36 Filed 06/23/15 Page 41 of 53
13

VéASE PARA RECLAMACIONES

IMPORTANTE: La información contenida en este formulario forma parte de todo contrato de compra de 

este vehículo. Constituye una contravención de la ley federal (16 C.F.R. 455) quitar este rótulo antes de la 

compra del vehículo por el consumidor (salvo para conducir el automóvil en calidad de prueba).

Chasis y carrocería

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Accesorios averiados

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Sistema de Escape

A continuación presentamos una lista de algunos de los principales defectos que pueden ocurrir en vehículos 

usados.

VENDEDOR

DIRECCIÓN

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1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION ftc.gov

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