[Federal Register Volume 87, Number 107 (Friday, June 3, 2022)]
[Notices]
[Pages 33790-33792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11944]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
seeking public comment on its proposal to extend for an additional 
three years the current Paperwork Reduction Act (``PRA'') clearance for 
information collection requirements in its ``Used Motor Vehicle Trade 
Regulation Rule'' (``Used Car Rule'' or ``Rule''), which applies to 
used vehicle dealers. That clearance expires on January 31, 2023.

DATES: Comments must be filed by August 2, 2022.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Used Car Rule, PRA 
Comment, FTC File No. [P137606]'' on your comment, and file your 
comment online at https://www.regulations.gov by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
J), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Elizabeth Scott, (312) 960-5609, 
Attorney, Midwest Region, Federal Trade Commission, 230 South Dearborn 
Street, Suite 3030, Chicago, IL 60604.

SUPPLEMENTARY INFORMATION: 
    Title of Collection: The Used Car Rule, 16 CFR part 455.
    OMB Control Number: 3084-0108.
    Type of Review: Extension without change of currently approved 
collection.
    Affected Public: Private Sector: Businesses and other for-profit 
entities.
    Estimated Annual Burden Hours: 3,338,568.
    Estimated Annual Labor Costs: $60,628,394.
    Non-Labor Costs: $12,242,100.

Abstract

    Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must obtain 
OMB approval for each collection of information they conduct or 
sponsor. ``Collection of information'' includes agency requests or 
requirements to submit reports, keep records, or provide information to 
a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). As required by 
section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity 
for public comment before requesting that OMB extend the existing 
paperwork clearance for the Used Car Rule, 16 CFR part 455 (OMB Control 
Number 3084-0108).
    The Used Car Rule promotes informed purchasing decisions by 
requiring that used car dealers display a form called a ``Buyers 
Guide'' on each used car offered for sale that, among other things, 
discloses information about warranty coverage and other information to 
assist purchasers. The Rule has no recordkeeping or reporting 
requirements. The FTC seeks clearance for the Rule's disclosure 
requirements and the estimated PRA burden for those requirements.

Burden Statement

    Estimated total annual hours burden: 3,338,568.
    As explained in more detail below, this total is based on estimates 
of the number of new car and used car dealers that sell used cars 
(46,525 \1\), the number of used cars sold by dealers annually 
(approximately 40,807,000 \2\), and the time needed to fulfill the 
information collection tasks required by the Rule.\3\
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    \1\ See U.S. Census Bureau, All Sectors: County Business 
Patterns, including ZIP Code Business Patterns, by Legal Form of 
Organization and Employment Size Class for the U.S., States, and 
Selected Geographies: 2019, available at https://data.census.gov/
cedsci/
table?q=CBP2019.CB1900CBP&n=44111%3A44112&tid=CBP2019.CB1900CBP&hideP
review=true&nkd=EMPSZES~001,LFO~001 (listing 21,427 establishments 
for ``new car dealers,'' NAICS code 44111, and 25,098 establishments 
for ``used car dealers,'' NAICS code 44112).
    \2\ U.S. Dept. of Trans., Bureau of Trans. Stat., New and Used 
Passenger Car and Light Truck Sales and Leases, https://www.bts.gov/content/new-and-used-passenger-car-sales-and-leases-thousands-vehicles (last visited Oct. 8, 2021) (listing 40,807,000 used 
vehicle sales in 2019).
    \3\ Some dealers opt to contract with outside contractors to 
perform the various tasks associated with complying with the Rule. 
Staff assumes that outside contractors would require about the same 
amount of time and incur similar costs as dealers to perform these 
tasks. Accordingly, the hour and cost burden totals shown, while 
referring to ``dealers,'' incorporate the time and cost borne by 
outside companies in performing the tasks associated with the Rule.
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    The Rule requires that used car dealers display a one-page, double-
sided Buyers Guide on each used car that they offer for sale. The 
component tasks associated with the Rule's required display of Buyers 
Guides include: (1) Ordering and stocking Buyers Guides; (2) entering 
data on Buyers Guides; (3) displaying the Buyers Guides on vehicles; 
(4) revising Buyers Guides as necessary; and (5) complying with the 
Rule's requirements for sales conducted in Spanish.
    1. Ordering and Stocking Buyers Guides: Dealers should need no more 
than an average of two hours per year to obtain Buyers Guides, which 
are readily available from many commercial printers or can be produced 
by an office word-processing or desktop publishing system.\4\ Based on 
an estimated population of 46,525 dealers, the annual hours burden for 
producing or obtaining and stocking Buyers Guides is 93,050 hours 
(46,525 dealers x 2 minutes).
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    \4\ Buyers Guides are also available online from the FTC's 
website, www.ftc.gov, at http://business.ftc.gov/selected-industries/automobiles.
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    2. Entering Data on Buyers Guides: The amount of time required to 
enter applicable data on Buyers Guides may vary substantially, 
depending on whether a dealer has automated the process. For used cars 
sold ``as is,'' copying vehicle-specific data from dealer inventories 
to Buyers Guides and checking the ``No Warranty'' box may take two to 
three minutes per vehicle if done by hand, and only seconds for those 
dealers who have automated the

[[Page 33791]]

process or use pre-printed forms. Staff estimates that dealers will 
require an average of two minutes per Buyers Guide to complete this 
task. Similarly, for used cars sold under warranty, the time required 
to check the ``Warranty'' box and to add warranty information, such as 
the additional information required in the Percentage of Labor/Parts 
and the Systems Covered/Duration sections of the Buyers Guide, will 
depend on whether the dealer uses a manual or automated process or 
Buyers Guides that are pre-printed with the dealer's standard warranty 
terms. Staff estimates that these tasks will take an average of one 
additional minute, i.e., cumulatively, an average total time of three 
minutes for each used car sold under warranty.
    Staff estimates that dealers sell approximately fifty percent of 
used cars ``as is'' and the other half under warranty. Therefore, staff 
estimates that the overall time required to enter data on Buyers Guides 
consists of 680,117 hours for used cars sold without a warranty 
(40,807,000 vehicles x 50% x 2 minutes per vehicle) and 1,020,175 hours 
for used cars sold under warranty (40,807,000 vehicles x 50% x 3 
minutes per vehicle) for a cumulative estimated total of 1,700,292 
hours.
    3. Displaying Buyers Guides on Vehicles: Although the time required 
to display the Buyers Guides on each used car may vary, FTC staff 
estimates that dealers will spend an average of 1.75 minutes per 
vehicle to match the correct Buyers Guide to the vehicle and to display 
it on the vehicle. The estimated burden associated with this task is 
approximately 1,190,204 hours (40,807,000 vehicles x 1.75 minutes per 
vehicle).
    4. Revising Buyers Guides as Necessary: If negotiations between the 
buyer and seller over warranty coverage produce a sale on terms other 
than those originally entered on the Buyers Guide, the dealer must 
revise the Buyers Guide to reflect the actual terms of sale. According 
to the original rulemaking record, bargaining over warranty coverage 
rarely occurs. Staff notes that consumers often do not need to 
negotiate over warranty coverage because they can find vehicles that 
are offered with the desired warranty coverage online or in other ways 
before ever contacting a dealer. Accordingly, staff assumes that 
dealers will revise the Buyers Guide in no more than two percent of 
sales, with an average time of two minutes per revision. Therefore, 
staff estimates that dealers annually will spend approximately 27,205 
hours revising Buyers Guides (40,807,000 vehicles x 2% x 2 minutes per 
vehicle).
    5. Spanish Language Sales: The Rule requires dealers to make 
contract disclosures in Spanish if the dealer conducts a sale in 
Spanish.\5\ The Rule permits displaying both an English and a Spanish 
language Buyers Guide to comply with this requirement.\6\ Many dealers 
with large numbers of Spanish-speaking customers likely will post both 
English and Spanish Buyers Guides to avoid potential compliance 
violations.
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    \5\ 16 CFR 455.5.
    \6\ Id.
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    Calculations from United States Census Bureau surveys indicate that 
approximately 13.4 percent of the United States population speaks 
Spanish at home, and 8.4 percent of the population speak English less 
than very well.\7\ Staff therefore estimate that dealers will conduct 
approximately 8.4 percent of used car sales in Spanish. Accordingly, 
dealers will incur the additional burden of completing and displaying a 
second Buyers Guide in approximately 3,427,788 sales assuming that 
dealers choose to comply with the Rule by posting both English and 
Spanish Buyers Guides. Moreover, as noted above, FTC staff estimates 
that approximately 50% of used cars are sold as-is without a warranty, 
while the remainder are sold with a warranty. As a result, staff 
estimates that the annual hours burden associated with entering data on 
Buyers Guides for sales in Spanish of cars without a warranty is 57,130 
hours (1,713,894 sales x 2 minutes). The estimated annual hours burden 
associated with completing Spanish language buyers guides for vehicles 
with a warranty is 85,695 hours (1,713,894 sales x 3 minutes). In 
addition, staff estimates that the additional burden caused by the 
Rule's requirement that dealers display Spanish language Buyers Guides 
when conducting sales in Spanish is 99,977 hours (3,427,788 sales x 
1.75 minutes).
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    \7\ U.S. Census Bureau, https://www.census.gov/acs/www/about/why-we-ask-each-question/language/ (last visited March 7, 2022).
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    6. Optional Disclosures of Non-Dealer Warranties: The Rule does not 
require dealers to disclose information about non-dealer warranties, 
but provides dealers with the options to disclose such warranties on 
Buyers Guides. FTC staff has estimated that dealers will make the 
optional disclosures on 25% of used cars offered for sale. Staff 
believes that checking the optional boxes to disclose a non-dealer 
warranty should require dealers no more than 30 seconds per vehicle. 
Accordingly, based on 40,807,000 used cars sold, staff estimates that 
making the optional disclosures entails a burden of 85,015 hours (25% x 
40,807,000 vehicles sold x 1/120 hour per vehicle).

Estimated Annual Cost Burden

    1. Labor costs: Labor costs are derived by applying appropriate 
hourly cost figures to the burden hours described above. Staff has 
determined that all of the tasks associated with ordering forms, 
entering data on Buyers Guides, posting Buyers Guides on vehicles, and 
revising them as needed, including the corresponding tasks associated 
with Spanish Buyers Guides and providing optional disclosures about 
non-dealer warranties, are typically done by clerical or low-level 
administrative personnel. Using a clerical cost rate of $18.16 per hour 
\8\ and an estimated annual burden of 3,338,568 hours for disclosure 
requirements, the total labor cost burden is $60,628,394 ($18.16 per 
hour x 3,338,568 hours).
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    \8\ The hourly rate is based on the Bureau of Labor Statistics 
estimate of the mean hourly wage for office clerks, general. 
Occupational Employment and Wages, May 2020, 43-9061 Office Clerks, 
General, available at: https://www.bls.gov/oes/current/oes439061.htm#nat.
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    2. Capital or other non-labor costs: Although the cost of Buyers 
Guides may vary, staff estimates that the average cost of each Buyers 
Guide is thirty cents based on industry input. Therefore, the estimated 
cost of Buyers Guides for the estimated 40,807,000 used cars sold by 
dealers is approximately $12,242,100 (40,807,000 vehicles sold x 30 
cents). In making this estimate, staff assumes that all dealers will 
purchase pre-printed forms instead of producing them internally, 
although dealers may produce them at lower expense using their own 
office automation technology. Capital and start-up costs associated 
with the Rule are minimal.
    Request for Comment: Pursuant to Section 3506(c)(2)(A) of the PRA, 
the FTC invites comments on: (1) Whether the disclosure, recordkeeping, 
and reporting requirements are necessary, including whether the 
resulting information will be practically useful; (2) the accuracy of 
our burden estimates, including whether the methodology and assumptions 
used are valid; (3) how to improve the quality, utility, and clarity of 
the disclosure requirements; and (4) how to minimize the burden of 
providing the required information to consumers.
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before August 2, 2022. Write 
``Used Car Rule, PRA Comment, FTC File No. [P137606]'' on your comment. 
Your comment, including your name and your state--will be placed on the 
public

[[Page 33792]]

record of this proceeding, including the https://www.regulations.gov 
website.
    Due to the public health emergency in response to the COVID-19 
outbreak and the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We encourage you 
to submit your comments online through the https://www.regulations.gov 
website.
    If you prefer to file your comment on paper, write ``Used Car Rule, 
PRA Comment, FTC File No. [P137606]'' on your comment and on the 
envelope, and mail it to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite 
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex 
J), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website at www.regulations.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at www.regulations.gov, we cannot redact or remove 
your comment unless you submit a confidentiality request that meets the 
requirements for such treatment under FTC Rule 4.9(c), and the General 
Counsel grants that request.
    The FTC Act and other laws that the Commission administers permit 
the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments that it receives on or before August 2, 
2022. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2022-11944 Filed 6-2-22; 8:45 am]
BILLING CODE 6750-01-P