16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00098

Submission Number:
Mark  Steinbach
O'Toole Rothwell
District of Columbia
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
I very much appreciate the FTC’s interest in making the Used Car Rule more meaningful for consumers. Unfortunately, despite the FTC’s best intentions, the current proposal falls short of that goal. Indeed, there is a very real question as to whether the public would be better off if the whole FTC Buyer’s Guide was simply eliminated. If the issue came down to amending the Rule in the fashion proposed by the FTC or eliminating the Rule, I would not hesitate to vote in favor of abandoning the Rule. I come at this from the perspective of an attorney whose law practice for over 30 years has emphasized representing consumers misled and damaged by car dealers in connection with the sale and financing of new and used motor vehicles. I have seen at close range the tremendous harm done to consumers when they are stuck with rebuilt wrecks, lemon buy-backs, flood damaged cars, odometer roll-backs and poorly repaired vehicles. In my view, the FTC should be most concerned about the most vulnerable consumers and its Used Car Rule should be designed to protect them. These are persons who cannot afford a new vehicle. These are persons who often lack the experience or education to understand something as complicated as purchasing a used vehicle. These are persons for whom dealers frequently say something like “Here, this is the only vehicle you qualify for, based on your credit score” (a vehicle which too often has some undisclosed but undesirable characteristic such as frame or other vehicle damage, prior short-term rental use, etc.). Especially in large cities, these often are persons for whom English is not their native language. One characteristic shared by many of these consumers is they lack the time, education or resources to thoroughly research and evaluate the desirability of purchasing any given used car. They are extremely unlikely to pay $100 or more to have an independent mechanic evaluate a car, or to delay their purchase by arranging for an independent inspection, even if they could afford it; they again are unlikely to come out of their own pocket to purchase a Carfax or Autocheck report. Indeed, given the exigencies of their circumstances, they are going to buy a vehicle TODAY; they are not going to have the luxury of going to their computer to order a vehicle history report or taking the car to a mechanic. For these car buyers, the FTC Used Car Guide is only something that gets thrown in their face in the unlikely event they ever find a lawyer willing to sue a dealer in the event they later learn they have been the victim of a willful fraud. If the FTC wishes to amend the Rule in a meaningful way, it should require dealers to disclose whether they have inspected the vehicle for signs of accident damage and whether they have a vehicle history report available for inspection (many of the largest dealers in major urban centers are “Carfax dealers” or otherwise routinely have Autocheck or other vehicle history reports in their possession or posted on their websites (yet the most vulnerable consumers typically don’t visit websites before visiting a dealership’s lot). The FTC should require that dealers – as in California – run a NMVTIS report and disclose on a Window Sticker any material adverse information about the used vehicle in question. It should require dealers to provide a meaningful vehicle history report to buyers without charge while simultaneously cautioning prospective buyers that these reports are incomplete and do not contain authoritative information about the prior history of the vehicle, and that they may negotiate with the dealer for the dealer to pay up to $xxx (an amount set by the FTC, indexed for inflation) for inspection of the vehicle by an independent mechanic of the customer’s choosing. Thank you for your work on behalf of the public. I urge you to re-evaluate what the FTC hopes to accomplish, measured against the limitations of the most vulnerable segment of the public whose interests you seek to serve. Please substantially re-write the Used Car Rule in a manner which truly meets those needs, or eliminate it. If the FTC finds that most motor vehicle dealers and/or their trade associations support the FTC’s proposed amendment, but that most consumer groups and consumer advocates oppose the proposed amendment, that is a pretty large red flag. Please reconsider.