16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00089

Submission Number:
Ronald Burdge
Burdge Law Office Co LPA
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
Over the last 35 years I have worked with both consumers and car dealers involving used and new car sales compliance problems, before the FTC Used Car Rule even existed. I can say with high confidence that the Rule has only helped the industry and consumers alike. But the changes now proposed would hurt both the industry and consumers. Uniform compliance with the Rule only fosters fair and full competition in the used car marketplace. The Buyers Guide is not perfect, but it is certainly much better than the current proposal. For instance, the NAAG is wrong in thinking the rule is archaic and they are out of touch if they think the Buyers Guide is of little value to buyers - it is extremely important and highly valuable to buyers. Buyers are now able to compare quickly and easily who is offering what warranty coverage. And changing the form to insert a statement telling the buyer to get a Vehicle History Report from CarFax, etc, would greatly harm buyers. First, many people already know this in large part, thanks to the incessant media advertising by Carfax and AutoCheck and the constant internet discussions about this very fact. More importantly, putting that advice on the Buyers Guide will actually discourage car dealers from doing what most of them already do - provide free CarFax, etc, information to Buyers - since they would simply revert to telling buyers that the Federal Trade Commission says the Buyer should go do it themselves. And that change would also encourage car dealers who practice deceptive sales tactics the ability to misrepresent a used car and if the consumer returns to complain the dealer can simply point to the Buyers Guide and say "you were told not to believe me and that you should get a vehicle history yourself" and then refuse to correct the very deception the dealer itself created. Using the Buyers Guide to warn buyers to get their own CarFax will enable car dealers to commit greater frauds on the public and do nothing to create a greater honesty in the industry. What the proposal lacks, most of all, however is a requirement that car dealers tell the Buyer what they already know about the vehicle they are selling. For instance, known defects discovered in a dealer's presale inspection but left unrepaired, or a title branding history, these don't have to be disclosed but they obviously should be. Not requiring disclosure of known defects actually encourages a dealer to hide the very problems that the dealer knows will come up after the sale. If anything, the FTC should require that in order to ensure fair and open disclosures by car dealers so buyers are not taken advantage. Changing the "as is" language (to add that the dealer won't pay for any repairs) is also a mistake because that is not the law in every state when the selling car dealer commits fraud. Since the Buyers Guide terms become part of the sales contract, the proposed change could alter the otherwise applicable legal obligations under state laws. This change would actually encourage car dealers to commit fraud, instead of standing behind what they sell and what they say and what they do. Since the government's NMVTIS vehicle history database was created to help prevent the deceptive resale of totaled vehicles, it is only reasonable that the FTC require used car dealers to take the 3 minutes needed to run a vehicle's VIN number through that easily accessible system and simply post on the Buyers Guide the information in the database. Honest disclosure at the point of sale would foster fairer price competition and sales practices in the industry and result in fewer buyer post-sale complaints. Putting the Spanish language sentence at the bottom of the English language form is the only good idea I see in this proposal. Honesty and fairness in the transaction should occur at the point of sale between the dealer and the buyer. That point is the Buyers Guide. Don't make it worse by adopting the current proposal. Make it stronger.