Compliance For Used Car Dealers

All car dealers are subject to state and federal compliance laws and regulations. This includes any dealership which sells used cars. In addition to the standard regulations applying to all automotive dealers, used car dealerships must comply with additional regulations.

One critical regulation, which applies to all used car dealers, is the FTC’s Used Car Rule, which requires that dealers post a Buyer’s Guide for every used car offered for sale. The Buyer’s Guide is an important consumer information document, which provides customers with purchasing and warranty information about the vehicle.

A Buyer’s Guide must be posted prominently and conspicuously for all used cars. Acceptable places for the guide to be posted include hanging from the rear-view or side mirrors, or under the windshield wipers. The Buyer’s Guide should include information such as:

  • The major mechanical and electrical systems on the car
  • Some of the major problems that consumers should look out for
  • Whether the vehicle is being sold "as is" or with a warranty
  • What percentage of the repair costs a dealer will pay under warranty
  • That oral promises are difficult to enforce and to get all promises in writing
  • To ask to have the car inspected by an independent mechanic before they buy
  • And more...

In addition to the Buyer’s Guide regulation, another important regulation impacting used car dealers is disclosure on open recalls impacting any vehicles offered for sale. The best practice is not to sell a used car with an open recall. If the dealer does still choose to sell a car with an open recall, the dealer must not claim that the car is safe or has been subjected to rigorous inspections.

These two critical regulations are just examples of the many critical laws and regulations that used car dealers must comply with to avoid fines and penalties. If you own or manage a used car dealership, you must be proactive in researching and implementing compliance procedures. Don’t wait until it’s too late - contact us today to start your used car dealer compliance audit.

About DCS

Dealer Compliance Services will create a compliance plan that works with your daily operations in each department.

Your dealership’s custom solution will include ongoing Auditing, Testing, Training, and Documentation.