[Federal Register Volume 59, Number 87 (Friday, May 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10937]
[[Page Unknown]]
[Federal Register: May 6, 1994]
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FEDERAL TRADE COMMISSION
16 CFR Part 455
Regulatory Flexibility Act and Periodic Review of Used Motor
Vehicle Trade Regulation Rule
AGENCY: Federal Trade Commission.
ACTION: Request for public comments.
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SUMMARY: The Federal Trade Commission (the ``Commission'') is
soliciting comments on the Used Motor Vehicle Trade Regulation Rule
(the ``Used Car Rule'' or ``Rule''). Specifically, the Commission is
requesting comments about the overall costs and benefits of the Rule
and its overall regulatory and economic impact as a part of its
systematic review of all current Commission regulations and guides.
Additionally, in accordance with the Regulatory Flexibility Act, the
Commission is soliciting comments and data on whether the Used Car rule
has had a significant economic impact on small entities, and if it has,
whether the Rule should be amended to minimize any such economic impact
on small entities. The Commission also is soliciting comments on two
nonsubstantive amendments the Commission proposes to make to the
Spanish language version of the Buyers Guide.
DATES: All comments and data should be received by the Commission no
later than July 5, 1994.
ADDRESSES: Comments and data should be sent to Secretary, Federal Trade
Commission, Washington DC 20580. Submissions should be identified as
``Used Car Rule--``Review Comment.''
FOR FURTHER INFORMATION CONTACT:
George Brent Mickum IV, Attorney, Federal Trade Commission, Division of
Enforcement, Bureau of Consumer Protection, Washington, DC 20580, (202)
326-3132.
SUPPLEMENTARY INFORMATION:
I. Background
The Commission promulgated the Used Car Rule, 16 CFR part 455,
under the authority of the Federal Trade Commission Act, 15 U.S.C. 41
et seq. (``FTC Act''), and the Magnuson Moss Warranty Act, 15 U.S.C.
2309, on November 19, 1984. 49 FR 45692 (1984). The Rule became
effective on May 9, 1985. Any violation of the Rule constitutes an
unfair or deceptive act or practice under the FTC Act, and is subject
to civil penalties of up to $10,000 per violation.
The Used Car Rule is primarily intended to prevent oral
misrepresentations and unfair omissions of material facts by used car
dealers concerning warranty coverage. The Rule provides a uniform
method for written disclosure of warranty information on a window
sticker called the ``Buyers Guide.'' The Rule requires clear disclosure
on the Buyers Guide of the basic terms and conditions of any warranty
offered in connection with the sale of a used car, including the
duration of coverage, the percentage of total repair costs to be paid
by the dealer, and the exact systems covered by the warranty.
The Rule also requires other disclosures that must be printed
directly on the Buyers Guide, including:
(1) A suggestion that consumers ask the dealer if a pre-purchase
inspection is permitted;
(2) A warning against reliance on spoken promises that are not
confirmed in writing; and
(3) A list of fourteen major systems of an automobile and the major
problems that may occur in these systems. The Rule also provides that
the Buyers Guide disclosures are to be incorporated by reference into
the sales contract, and are to govern in the event of an inconsistency
between the Buyers Guide and the sales contract. When used car dealers
conduct sales in the Spanish language, Spanish language Buyers Guides
are required.
II. Rule Reviews
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (the ``RFA''),
requires that the FTC conduct a periodic review of rules that have or
may have a significant economic impact on a substantial number of small
entities. In addition, as part of its oversight responsibilities, the
Commission has determined to review rules and guides periodically. See
59 FR 2955 (Jan. 20, 1994). Both reviews will seek information about
the costs and benefits of the Commission's rules and guides and their
regulatory impact. The information obtained will assist the Commission
in identifying rules and guides that warrant modification or
rescission.
The purpose of the RFA review is limited to determining whether the
Rule should be continued without change, or should be amended or
rescinded, consistent with the state objectives of applicable statutes,
to minimize any significant economic impact of the Rule upon a
substantial number of small entities. For the purpose of the RFA
review, a ``small entity'' is a used motor vehicle dealer with less
than $11.5 million in annual sales, as defined by the Small Business
Size Standards, 13 CFR 121.601. The purpose of the Commission's
periodic review is to solicit comment on issues relating to the
operation of the Rule. This review is not limited to the Rule's impact
on small entities, but encompass all affected entities.
III. Request for Comment
The Commission solicits comment on the following questions and
requests that any factual data (e.g., economic and accounting
information, statistical analysis, surveys, studies, etc.) upon which
submitted comments are based be included with the comments.
1. Is there a continuing need for the Rule?
a. What benefits has the Rule provided to purchasers of the
products or services affected by the Rule?
b. Has the Rule imposed costs on purchasers?
2. What changes, if any, should be made to the Rule to increase the
benefits of the Rule to purchasers?
a. How would these changes affect the costs the Rule imposes on
firms subject to its requirements?
3. What significant burdens or costs, including costs of
compliance, has the Rule imposed on firms subject to its requirements?
a. Has the Rule provided benefits to such firms?
4. What changes, if any, should be made to the Rule to reduce the
burdens or costs imposed on firms subject to its requirements?
a. How would these changes affect the benefits provided by the
Rule?
5. Does the Rule overlap or conflict with other federal, state, or
local laws or regulations?
6. Since the Rule was issued, what effects, if any, have changes in
relevant technology or economic conditions had on the Rule?
7. What significant burdens or costs, including costs of
compliance, has the Rule imposed on small firms subject to its
requirements?
a. How do these burdens or costs differ from those imposed on
larger firms subject to the Rule's requirements?
8. To what extent are the burdens or costs that the Rule imposes on
small firms similar to those that small firms would incur under
standard and prudent business practices?
9. What changes, if any, should be made to the Rule to reduce the
burdens or costs imposed on small firms?
a. How would these changes affect the benefits of the Rule?
b. Would such changes adversely affect the competitive position of
larger firms?
10. How many used vehicles (as defined by Sec. 455.1(d)(2) of the
Rule) are sold annually in the United States?
11. How many used car dealers have under $11.5 million in annual
sales?
12. Should the Rule's requirement that the Buyers Guide be posted
in a side window of a used vehicle, as set forth in Sec. 455.2(a)(1) of
the Rule, be modified to allow posting in a different location (for
example, in the rear window of a pickup truck or other vehicle without
side rear windows), as long as the Buyers Guide is conspicuous and both
sides may be readily viewed?
13. What changes to the format of the Buyers Guide should be
considered in order to reduce compliance costs or burdens? Would such
changes have any detrimental effect on the benefits provided by the
Rule? Is there any empirical or other evidence to support opinions that
such changes would or would not have a detrimental effect on benefits?
14. What changes to the format of the Buyers Guide should be
considered in order to increase its benefits? What effect would such
changes have on the costs or burdens imposed by the Rule? Is there any
empirical or other evidence to support opinions that such changes would
or would not increase costs or burdens?
IV. Non-Substantive Amendments to the Rule
The Commission also solicits comment on two non-substantive
amendments the Commission proposes to the Rule involving the Spanish
language version of the Buyers Guide, Sec. 455.5 of the Rule. The first
proposed change is grammatical: The ``As Is'' (``Como Esta-Sin
Garantia'') section of the Buyers Guide reads ``El vendedor no asume
ninguna responsabilidad por cualquier las reparaciones * * *''
(emphasis added). This language will be amended to read: ``El vendedor
no asume ninguna responsabilidad por cualquier reparacione * * *'' The
second suggested modification appears in the ``Warranty''
(``Garantia'') section of the Buyers Guide. The word ``vendedo'' in the
second full sentence will be amended to read ``Pida al vendedor una
copia del documento * * *.''
List of Subjects in 16 CFR Part 455
Motor vehicles, Trade practices.
Authority: The Regulatory Flexibility Act, 5 U.S.C. 601 et seq.
(1980).
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 94-10937 Filed 5-5-94; 8:45 am]
BILLING CODE 6750-01-M
