Federal Used Car Laws

For those of you who are interested in buying or selling a used car in the United States, you should know that the Federal Trade Commission has laws concerning used vehicles. The state-specific guidelines might be more in depth and/or stringent in comparison to the ones of FTC, but the states have to enforce the federal laws for used vehicles.

According to the rules established by FTC, the Buyers Guide has to be posted on every single car that is for sale on a used car lot. This guide must be available as to give potential customers all the necessary information about the car. FTC states that this guide has to contain specific info that must include whether the car is sold “as is” or it comes bundled with a warranty. In addition, it must say how much (%) the dealer will pay for the repairs under that stated warranty, along with a reminder for the buyer to keep this guide. This guide must also inform the client that spoken promises are in most cases significantly more difficult to enforce and for this reason; the buyer should get everything in writing in order to avoid any problems after the sale.

The federal used car laws regarding the aforementioned “as is” law is not allowed in certain states in the U.S. In these states, FTC requires that used car dealers must provide at least a limited warranty for the ones up for sale. The specific details of the warranty have to be spelled out in a clear way by the car dealer and may include information regarding the percentage of the costs for repairs covered by the dealer. In addition, it may include the number of miles the buyer can do before the warranty is no longer valid, along with the length of time before it expires.

In addition, the Federal Trade Commission has mentioned that these buyers guide have to inform the client regarding any major mechanical and/or electrical problems of the car, along with mentioning any other potential issues that might occur. The warranty provided can be either limited or full and the specifications have to be stated clearly in the guide.

For those of you who won’t be buying a car from a used car dealer, you need to understand that private sellers are not covered by the used car rule and they are not obligated to use the buyers guide. In addition, these private sales aren’t covered in most of the situations by the implied warranties, which means that the private seller will most likely sell the car “as is”, unless the purchase agreement mentions something else. A written contract must be respected by both parties. Keep in mind that although a used car comes with warranty, it may not be transferable so the moment its owner sells it, the warranty is no longer valid since the car has a new owner.

Last, there are lots of states in the U.S. that do not force individual car sellers to ensure that their car must pass the state inspection or come with some sort of warranty before the sell.

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