16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00126

Submission Number:
Michele Peters
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
Regarding the used car market, the goal we all share is improving its effectiveness. The goal of the Buyers Guide should be to deliver as much information as possible into the hands of consumers who are usually unsophisticated buyers. The "everyone must protect themselves attitude" approach suggested in the Notice invites fraud by the more sophisticated upon those with less access to information. Instead of abetting fraud, the FTC should mandate that the Buyers Guide be an information device that conveys to all consumers the necessary information for a vehicle to be properly priced by the market. Providing this information not only protects consumers from fraud but strengthens and enhances our economic system. The following changes should be made to the proposed rule- 1. As currently proposed, the new AS IS statement misrepresents the availability of legal remedies in Virginia and must be altered. In an AS IS sale in Virginia, the seller is disclaiming two common concepts that are ordinarily implied in sales - fitness and merchantability. The legal effect of this notice is to deny responsibility of the seller for repairs, but the actual statement suggests that the car is not fit to be used for its ordinary purpose. In states like mine that allow such sales, the FTC should mandate that the truth be told. Therefore, the AS IS disclosure should first state "THE DEALER DENIES RESPONSIBILITY FOR ANY REPAIRS" in large, bold type. Most consumers are unsophisticated, and do not really know what AS IS means. The Buyers Guide, WHICH THEY RELY UPON, should honestly tell them. 2. The NMVITS should be checked by all car dealers prior to selling any car and then a disclosure made about it. All the dealer must do is accurately represent whether a title brand or damage appears in the database and the date the database was checked. Most unsophisticated buyers do not know how to do this, as they are not in the business of buying and selling cars, unlike the dealers. 3. Dealers should be required to state if a manufacturer's warranty still applies. This information is crucial for the market to properly value the car. As the owner of the car, a car dealer is in a better position to determine this easily, rather than a future owner. 4. The statement about the manufacturer's warranty and the service contract should be on the front of the notice. On the back, further description of any dealer warranty can be provided by combining that disclosure with the list of possible and known defects in a vehicle. The dealer can indicate which part of the possible defects items in the list are covered by the warranty. A few other lines should be added to allow for additional warranty areas to be listed. 5. KNOWN DEFECTS SHOULD BE DISCLOSED ON THE BUYER'S GUIDE. A car that has a known defect should not be sold without disclosure of the defect. This information is necessary for the market to properly price the vehicle. The dealers can use the list of major defects and indicate which of these defects is known to be present, and additional lines can be added for other known defects. Consumers RELY upon the information provided by the dealer - how many buyers of used cars do YOU KNOW, who shop for a car, spend the time and money to get an independent mechanical evaluation of the vehicle (even if the dealership would allow it), research the fair market value, and then make the determination about whether to buy or not? HAve you ever bought a used car? Did you do all this? Even people who KNOW better, and are SOPHISTICATED buyers probably don't do all of this. The way the proposed notice is written will, WITHOUT A DOUBT, increase fraud, difficulties for low-income consumers who need a vehicle to get to their job, and cause dissatisfaction with the used car buying experience. THIS NOTICE IS A VERY BAD IDEA!