The Used Car Buyer's Guide
The Federal Trade Commission's (FTC) Used Car Rule requires car dealers to post a Buyer's Guide in every used car they offer for sale. Buyer's Guides do not have to be posted on motorcycles and most recreational vehicles. Anyone car dealer who sells less than six cars a year doesn't have to post a Buyer's Guide.
The Used Car Buyer's Guide Must Tell You the Following:
- Whether the vehicle is being sold "as is" or with a warranty.
- What percentage of the repair costs a car dealer will pay under the warranty.
- That spoken promises are difficult to enforce;
- To get all promises in writing.
- To keep the Buyer's Guide for reference after the sale.
- The major mechanical and electrical systems on the car, including some of the major problems you should look out for.
- To ask to have the car inspected by an independent mechanic before you buy.
When you buy a used car from a car dealer, get the original Buyer's Guide that was posted in the vehicle, or a copy. The Guide must reflect any negotiated changes in warranty coverage. It also becomes part of your sales contract and overrides any contrary provisions. For example, if the Buyer's Guide says the car comes with a warranty and the contract says the car is sold "as is," the car dealer must give you the warranty described in the Guide.
As Is - No Warranty
When the car dealer offers a vehicle "as is," the box next to the "As Is - No Warranty" disclosure on the Buyer's Guide must be checked. If the box is checked but the dealer promises to repair the vehicle or cancel the sale if you're not satisfied, make sure the promise is written on the Buyer's Guide.
Otherwise, you may have a hard time getting the car dealer to make good on his word. Some states, including Connecticut, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New York, Rhode Island, Vermont, West Virginia and the District of Columbia, don't allow "as is" sales for many used vehicles.
Three states - Louisiana, New Hampshire, and Washington - require different disclosures than those on the Buyer's Guide. If the car dealer fails to provide proper state disclosures, the sale is not "as is." To find out what disclosures are required for "as is" sales in your state, contact your state's Attorney General.
State laws hold car dealers responsible if cars they sell don't meet reasonable quality standards. These obligations are called implied warranties - unspoken, unwritten promises from the seller to the buyer. However, car dealers in most states can use the words "as is" or "with all faults" in a written notice to buyers to eliminate implied warranties. There is no specified time period for implied warranties.
Warranty of Merchantability
The most common type of implied warranty is the warranty of merchantability: The seller promises that the product offered for sale will do what it's supposed to. That a car will run is an example of a warranty of merchantability. This promise applies to the basic functions of a car. It does not cover everything that could go wrong.
Breakdowns and other problems after the sale don't prove the seller breached the warranty of merchantability. A breach occurs only if the buyer can prove that a defect existed at the time of sale. A problem that occurs after the sale may be the result of a defect that existed at the time of sale or not. As a result, a car dealer's liability is judged case-by-case.
Warranty of Fitness for a Particular Purpose
A warranty of fitness for a particular purpose applies when you buy a vehicle based on the car dealer's advice that it is suitable for a particular use. For example, a dealer who suggests you buy a specific vehicle for hauling a trailer in effect is promising that the vehicle will be suitable for that purpose.
If you have a written warranty that doesn't cover your problems, you still may have coverage through implied warranties. That's because when a car dealer sells a vehicle with a written warranty or extended auto warranty, implied warranties are included automatically. The dealer can't delete this protection. Any limit on an implied warranty's time must be included on the written warranty.
In states that don't allow "as is" sales, an "Implied Warranties Only" disclosure is printed on the Buyer's Guide in place of the "as is" disclosure. The box beside this disclosure will be checked if the car dealer decides to sell the car with no written warranty.
In states that do allow "as is" sales, the "Implied Warranties Only" disclosure should appear on the Buyer's Guide if the car dealer decides to sell a vehicle with implied warranties and no written warranty.
Car dealers who offer a written warranty must complete the warranty section of the Buyers Guide. Because terms and conditions vary, it may be useful to compare and negotiate coverage.
Car dealers may offer a full or limited warranty on all or some of a vehicle's systems or components. Most used car warranties are limited and their coverage varies. A full warranty includes the following terms and conditions:
- Anyone who owns the vehicle during the warranty period is entitled to warranty service.
- Warranty service will be provided free of charge, including such costs as removing and reinstalling a covered system.
- You have the choice of a replacement or a full refund if, after a reasonable number of tries if the car dealer cannot repair the vehicle or a covered system.
- You only have to tell the car dealer that warranty service is needed in order to get it, unless the dealer can prove that it is reasonable to require you to do more.
- Implied warranties have no time limits.
If any of these statements don't apply, the warranty is limited. A full or limited warranty doesn't have to cover the entire vehicle. The car dealer may specify that only certain systems are covered. Some parts or systems may be covered by a full warranty; others by a limited warranty.
The car dealer must check the appropriate box on the Buyer's Guide to indicate whether the warranty is full or limited and the dealer must include the following information in the "Warranty" section:
- The percentage of the repair cost that the dealer will pay. For example, "the dealer will pay 100 percent of the labor and 100 percent of the parts."
- The specific parts and systems - such as the frame, body, or brake system - that are covered by the warranty. The back of the Buyer's Guide lists the major systems where problems may occur.
- The warranty term for each covered system. For example, "30 days or 1,000 miles, whichever comes first."
- Whether there's a deductible and, if so, how much.
You have the right to see a copy of the car dealer's warranty before you buy. Review it carefully to determine what is covered. The warranty gives detailed information, such as how to get repairs for a covered system or part.
It also tells who is legally responsible for fulfilling the terms of the warranty. If it's a third party, investigate their reputation and whether they're insured. Find out the name of the insurer, and call to verify the information. Then check out the third-party company with your local Better Business Bureau. That's not foolproof, but it is prudent. Make sure you receive a copy of the car dealer's warranty document if you buy a car that is offered with a warranty.
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