Details
December 13, 2016
11:00AM - 12:00PM
The "New" Used Car Rule: What Has Changed (and What Hasn't)
OADA Webinar
While there are many aspects to a motor vehicle sale, the creation and disclaimer of warranties is one area that continues to pose significant legal compliance issues for motor vehicle dealers. While the concepts in this area seem relatively straightforward, the issue becomes complicated because of the various Federal and state laws that often have an overlapping effect on the disclosure obligations. The Uniform Commercial Code, the Magnuson-Moss Warranty Act, and the Federal Trade Commission’s (FTC) Used Car Rule each impose specific requirements on dealerships when offering or disclaiming warranties. To add to the confusion, on November 10, 2016, the FTC announced final amendments to its Used Car Rule that will change both the layout and content of the Buyers Guides.
The FTC’s Used Car Rule was enacted to prevent and discourage oral misrepresentations and unfair omissions of material facts concerning warranty coverage by dealers selling used vehicles. The “new” Buyers Guides will reflect the FTC’s position that consumers are entitled to even more information regarding a used vehicle’s condition and prior use than has historically been provided before the sale. Some of those changes include:
- revisions to the description of an As-Is Sale;
- the addition of “Non-Dealer” Warranty Boxes;
- the inclusion of additional major components and potential defects that can occur;
- the addition of information on how to obtain vehicle history and open safety recall reports; and
- a disclosure on the English version of the Buyers Guide for Spanish-speaking consumers.
These amendments become effective on January 27, 2017; however, dealers may continue to use their existing stock of Buyers Guides for up to one year after the effective date. That doesn’t mean efforts to comply with the new requirements should be delayed. Dealers are well advised to begin working with their vendors, advisors, and staff now to ensure that the updated versions of the revised Buyers Guides will be available and properly completed when the time comes to start using them. The new Rules are likely to spur another round of enforcement activity on the part of the FTC and local enforcement agencies. In addition, as of August 1, 2016, the potential civil penalties for failing to display or properly complete the Used Car Buyers Guide increased from $16,000 to $40,000 per violation!
If you are interested in learning more about the new Buyers Guides, SIGN UP for OADA’s webinar on December 13, 2016. Deanna Stockamp, a partner with the law firm of Stockamp & Brown LLC, will discuss the new disclosure requirements, as well as dealer obligations for complying with other Federal and state laws when offering a limited warranty or other guaranty.
There is a $25 connection fee for OADA member dealers, and a $50 connection fee for non-member dealers. Remember, if you are a member of DAADA, your first registration is free!
Printer-Friendly Version
Add to Calendar
aCLuDhaqizCaPxAftmqF167204
12/13/2016 11:00 AM
12/13/2016 12:00 PM
false
The "New" Used Car Rule: What Has Changed (and What Hasn't)
REGISTER HERE!
While there are many aspects to a motor vehicle sale, the creation and disclaimer of warranties is one area that continues to pose significant legal compliance issues for motor vehicle dealers. While the concepts in this area seem relatively straightforward, the issue becomes complicated because of the various Federal and state laws that often have an overlapping effect on the disclosure obligations. The Uniform Commercial Code, the Magnuson-Moss Warranty Act, and the Federal Trade Commission’s (FTC) Used Car Rule each impose specific requirements on dealerships when offering or disclaiming warranties. To add to the confusion, on November 10, 2016, the FTC announced final amendments to its Used Car Rule that will change both the layout and content of the Buyers Guides.
The FTC’s Used Car Rule was enacted to prevent and discourage oral misrepresentations and unfair omissions of material facts concerning warranty coverage by dealers selling used vehicles. The “new” Buyers Guides will reflect the FTC’s position that consumers are entitled to even more information regarding a used vehicle’s condition and prior use than has historically been provided before the sale. Some of those changes include:
revisions to the description of an As-Is Sale;
the addition of “Non-Dealer” Warranty Boxes;
the inclusion of additional major components and potential defects that can occur;
the addition of information on how to obtain vehicle history and open safety recall reports; and
a disclosure on the English version of the Buyers Guide for Spanish-speaking consumers.
These amendments become effective on January 27, 2017; however, dealers may continue to use their existing stock of Buyers Guides for up to one year after the effective date. That doesn’t mean efforts to comply with the new requirements should be delayed. Dealers are well advised to begin working with their vendors, advisors, and staff now to ensure that the updated versions of the revised Buyers Guides will be available and properly completed when the time comes to start using them. The new Rules are likely to spur another round of enforcement activity on the part of the FTC and local enforcement agencies. In addition, as of August 1, 2016, the potential civil penalties for failing to display or properly complete the Used Car Buyers Guide increased from $16,000 to $40,000 per violation!
If you are interested in learning more about the new Buyers Guides, SIGN UP for OADA’s webinar on December 13, 2016. Deanna Stockamp, a partner with the law firm of Stockamp & Brown LLC, will discuss the new disclosure requirements, as well as dealer obligations for complying with other Federal and state laws when offering a limited warranty or other guaranty.
There is a $25 connection fee for OADA member dealers, and a $50 connection fee for non-member dealers. Remember, if you are a member of DAADA, your first registration is free!
OADA Webinar
