26 QUESTION 13: What does the FTC used car rule generally provide? The used car rule, which became effective in 1985, requires a dealer to post a window sticker, called the Buyer’s Guide, on every used car or light truck offered for sale. The Buyer’s Guide must be in the exact format required by the rule and must be filled in according to the directions. In addition, the Buyer’s Guide, or a copy, must be provided to the purchaser at the time of sale, and the information contained therein must be incorporated into the Contract for Sale. Any dealer who offers six or more used vehicles for sale in 12 months is covered by this rule. However, sales to other dealers are excluded. Demonstrators are specifically covered. You should further note that if a used car transaction is conducted in Spanish, a Spanish-language version of the Buyer’s Guide must be provided to the consumer. Finally, if your dealership enters into a service contract with a consumer either at the time of sale or within 90 days thereafter, federal law prohibits you from disclaiming or modifying any implied warranty to the consumer. QUESTION 14: May I obtain a consumer’s credit report without written permission? Yes. The dealer may always obtain a credit report if the dealer has signed permission from the consumer. However, the FTC has recently interpreted the revised Fair Credit Reporting Act to provide for a two-part test for obtaining a consumer’s credit report without a signature. Those two parts are: 1. The consumer clearly understands that he or she is initiating the purchase or lease of a vehicle; and 2. The seller has a legitimate business need for the consumer report to complete the transaction. Accordingly, a dealer may not obtain a credit report without written permission when a consumer is requesting only a test drive or asking questions about prices or financing, or if it is solely for the purpose of negotiating with a customer. There are inherent risks in taking credit applications over the phone. Penalties can run to $2,500 per violation. When in doubt, written permission is always recommended, and such permission should be retained by dealers for three years. QUESTION 15: My customer purchased a vehicle and executed all the paperwork. Now, two days later, he has returned the vehicle to my dealership and claimed that he is rescinding the sale under the Federal Trade Commission’s “Cooling-Off Rule.” Can he do this? No. The Cooling-Off Rule, which provides three days to cancel purchases of $25 or more, applies to sales at the buyer’s home, workplace or dormitory, or at facilities rented by the seller on a temporary or short-term basis, such as hotel or motel
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