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AGs Say Used Car Rule Needs a Tune-Up

November 25, 2008

SEATTLE – Forty-two attorneys general are seeking a tune-up for the federal "Used Car Rule." They are asking the Federal Trade Commission to add additional disclosures about a vehicle's history to the "Buyer’s Guide" notice displayed on cars available for purchase from dealers.

"Laws are like cars, they need regular maintenance to make sure they're operating effectively," Attorney General Rob McKenna said. "The federal 'Used Car Rule' is rusty and needs tuning to perform properly for consumers."

The current Used Car Rule requires that Buyer's Guide notices be posted on used vehicles offered for sale at dealerships. The notices indicate whether a car is covered by a warranty or sold "as-is."

But the law doesn't require additional information about a vehicle's history to be printed on the guide, such as whether cars have been assigned titles that would indicate damage from a flood or crash or if the car was repurchased by a manufacturer under a state's Lemon Law.

A Washington state law requires dealers to disclose a vehicle’s history – but only if the buyer requests this additional information.

"Nothing diminishes the market value of a used vehicle more than detrimental history," the attorneys general stated in their comments. Damaged vehicles may also pose safety hazards, they added.

Amending the Buyer's Guide to require prior-damage information would help prevent fraud and omissions of material fact, they said, noting that Wisconsin already requires such information to be disclosed on its Buyer’s Guide and the FTC approved the regulation.

"There simply is no excuse for the national Buyer's Guide to fail to include vehicle history and title brand information," the AGs wrote. "That information is readily available to dealers through private data sources and through title records accompanying vehicle 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."

The comments to the FTC were written by Iowa's attorney general and signed by the following attorneys general: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, the District of Columbia and the Northern Mariana Islands. They also incorporate comments from the International Association of Lemon Law Administrators.

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