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States Want Stronger Used Car Rule

Buyers should be told if vehicles have been wrecked or flooded

By Mark Huffman
ConsumerAffairs.com

November 22, 2008

• Auto Bailout Chief: GM's CEO Had To Go • Taxpayers Unlikely To Recover Full Auto Industry Investment • GMAC Changing Name to Ally Bank • New Car Sales Show Improvement From May • April Dismal For U.S. And Foreign Carmakers • Chrysler Files for Bankruptcy, GMAC Takes Over Financing • Auto Sales Stagnant, But Hope Appears • What Would a Chrysler Bankruptcy Mean For You? • U.S. Carmakers Getting More Federal Aid • GM Cuts More Jobs, Eyes China • New Car Sales Plunge in February • Car Buyers Seeking Higher Fuel Economy • Video: Do Women Really Hate Car Shopping? • GM Plans New Minicar, Electric Cadillac • GMAC Becomes a Bank • White House to Loan Carmakers $17.4 Billion • Chrysler Closing Car Plants for 30 Days • What Would a Washington-Designed Car Industry Look Like? • States Want Stronger Used Car Rule • Industry Troubles Cloud LA Car Show • Carmakers Get Neither Love Nor Money From Congress • Taxpayers Headed For Automotive Bailout • Time May Be Running Short for U.S. Carmakers • Feds Move Closer to Carmaker Bailout • New-Vehicle Buyers Turn to the Web in Record Numbers --- • More about Auto Sales ...

Attorneys general from 42 states are asking the U.S. Federal Trade Commission to strengthen "Buyer's Guide" notices to indicate if used cars, trucks or SUVs that are for sale have suffered prior damage from collisions or floods.

"Nothing diminishes the market value of a used vehicle more than a history of crashes or flood damage," said Iowa Attorney General Tom Miller. "Consumers should be entitled to know instantly if a vehicle has been damaged by flood or collision."

Miller led a group of 42 attorneys general in asking the FTC to strengthen its "Used Car Rule," which requires used car dealers to post "Buyer's Guide" sticker notices on vehicles for sale.

The current Rule requires used-car Buyer's Guide notices to tell prospective buyers whether a vehicle is offered with a warranty, or is being sold "as-is," without a warranty.

"The Rule should go farther," Miller said. "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."

The states said the rule should be strengthened in order to help prevent fraud and omissions of material fact. Vehicle history is "about the most material fact one can know about a used vehicle – its damage, title, and Lemon Law history," the states told the FTC.

The appeal was contained in a comment letter submitted to the FTC this week. The letter noted that Wisconsin already requires prior-damage information to be disclosed on their Buyer's Guide, and that the FTC approved the Wisconsin regulation.

"There simply is no excuse for the national Buyer's Guide to fail to include vehicle history and title brand information" as in Wisconsin, the states said.

"That information is readily available to dealers through private data sources and through title records accompanying vehicles 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."

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