Buying A Used Car: A Consumer Guide From The Federal Trade Commission
Buying A Used Car: A Consumer Guide From The Federal Trade Commission
Used Car
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PAYMENT OPTIONS
You have two choices: pay in full or finance over time. If you
finance, the total cost of the car increases. That’s because you’re
also paying for the cost of credit, which includes interest and
other loan costs. You’ll also have to consider how much you can
put down, your monthly payment, the length of the loan, and the
annual percentage rate (APR). Keep in mind that annual percent-
age rates usually are higher and loan periods generally are shorter
on used cars than on new ones.
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If you decide to finance, make sure you understand the fol-
lowing aspects of the loan agreement before you sign any docu-
ments:
the exact price you’re paying for the vehicle;
S GUID
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this form.
the amount you’re financing;
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Used cars are sold through a variety of outlets: franchise and in-
dependent dealers, rental car companies, leasing companies, and
used car superstores. You can even buy a used car on the Inter-
net. Ask friends, relatives, and co-workers for recommendations.
You may want to call your local consumer protection agency,
state Attorney General (AG), and the Better Business Bureau
(BBB) to find out if any unresolved complaints are on file about a
The Federal particular dealer.
2
Buyers Guides do not have to be posted on motorcycles and most
recreational vehicles. Anyone who sells less than six cars a year
doesn’t have to post a Buyers Guide.
As Is — No Warranty
When the dealer offers a vehicle “as is,” the box next to the
“As Is — No Warranty” disclosure on the Buyers 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 STATE
the promise is written on the Buyers Guide. Otherwise, you may
have a hard time getting the dealer to make good on his word.
Some states, including Connecticut, Kansas, Maine, Maryland,
ABC 123
Massachusetts, Minnesota, Mississippi, New Jersey, New York,
Rhode Island, Vermont, West Virginia, and the District of Co-
lumbia, don’t allow “as is” sales for many used vehicles.
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
If you have a defect that existed at the time of sale or not. As a result, a deal-
er’s liability is judged case by case.
written
Warranty of Fitness for a Particular Purpose
warranty that A warranty of fitness for a particular purpose applies when you
buy a vehicle based on the dealer’s advice that it is suitable for
doesn’t cover a particular use. For example, a dealer who suggests you buy a
specific vehicle for hauling a trailer in effect is promising that the
your problems, vehicle will be suitable for that purpose.
you still may If you have a written warranty that doesn’t cover your prob-
have coverage lems, you still may have coverage through implied warranties.
That’s because when a dealer sells a vehicle with a written war-
through ranty or service contract, implied warranties are included auto-
matically. The dealer can’t delete this protection. Any limit on an
implied implied warranty’s time must be included on the written war-
ranty.
warranties.
In states that don’t allow “as is” sales, an “Implied Warran-
ties Only” disclosure is printed on the Buyers Guide in place of
the “As Is” disclosure. The box beside this disclosure will be
checked if the dealer decides to sell the car with no written war-
ranty.
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In states that do allow “as is” sales, the “Implied Warranties
Only” disclosure should appear on the Buyers Guide if the dealer
decides to sell a vehicle with implied warranties and no written
warranty. A copy of the Buyers Guide with the “Implied Warran-
ties Only” disclosure is on page 13.
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of the Buyers 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”; and
whether there’s a deductible and, if so, how much.
Spoken Promises
The Buyers Guide cautions you not to rely on spoken promises.
They are difficult to enforce because there may not be any way
for a court to determine with any confidence what was said. Get
all promises written into the Guide.
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An inspection is a good idea even if the car has been “certified”
and inspected by the dealer and is being sold with a warranty
or service contract. A mechanical inspection is different from a
safety inspection. Safety inspections usually focus on conditions
that make a car unsafe to drive. They are not designed to deter-
mine the overall reliability or mechanical condition of a vehicle.
Vehicle Systems
The Buyers Guide lists an auto’s 14 major systems and some seri-
ous problems that may occur in each. This list may help you and
your mechanic evaluate the mechanical condition of the vehicle.
The list also may help you compare warranties offered on differ-
ent cars or by different dealers.
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Dealer Identification & Consumer Complaint Information
The back of the Buyers Guide lists the name and address of the
dealership. It also gives the name and telephone number of the
person you should contact at the dealership if you have problems
or complaints after the sale.
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Many states do not require individuals to ensure that their
vehicles will pass state inspection or carry a minimum war-
ranty before they offer them for sale. Ask your state Attorney
General’s office or local consumer protection agency about
the requirements in your state.
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Contact your local Better Business Bureau, state Attorney
General, or state Department of Motor Vehicles. You also
might consider using a dispute resolution organization to
arbitrate your disagreement if you and the dealer are willing. Check
Under the terms of many warranties, this may be a required
first step before you can sue the dealer or manufacturer. out these
Check your warranty to see if this is the case. If you bought
your car from a franchised dealer, you may be able to seek
publications
mediation through the Automotive Consumer Action Program from the FTC:
(AUTOCAP), a dispute resolution program coordinated na-
tionally by the National Automobile Dealers Association and Auto Service
sponsored through state and local dealer associations in many Contracts
cities. Check with the dealer association in your area to see if
they operate a mediation program.
Buying a New
Car
If none of these steps is successful, small claims court is
an option. Here, you can resolve disputes involving small Car Ads:
amounts of money, often without an attorney. The clerk of Reading
your local small claims court can tell you how to file a suit Between the
and what the dollar limit is in your state. Lines
The Magnuson-Moss Warranty Act also may be helpful. Un- Taking the Scare
der this federal law, you can sue based on breach of express Out of Auto
warranties, implied warranties, or a service contract. If suc- Repair
cessful, consumers can recover reasonable attorneys’ fees and
other court costs. A lawyer can advise you if this law applies.
ftc.gov
1-877-FTC-HELP
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Front Side of Buyers Guide
Be wary
if a BUYERS GUIDE
IMPORTANT: Spoken promises are difficult to enforce. Ask the dealer to put all promises in writing. Keep this form.
dealer
won’t put
___________________________________________________________________________________________________________
promises
VEHICLE MAKE MODEL YEAR VIN NUMBER
in _____________________________________________________
DEALER STOCK NUMBER (Optional)
writing.
WARRANTIES FOR THIS VEHICLE:
AS IS - NO WARRANTY
YOU WILL PAY ALL COSTS FOR ANY REPAIRS. The dealer assumes no responsibility for any repairs regardless of
any oral statements about the vehicle.
WARRANTY
FULL LIMITED WARRANTY. The dealer will pay ____% of the labor and ____% of the parts for the covered
systems that fail during the warranty period. Ask the dealer for a copy of the warranty document for
a full explanation of warranty coverage, exclusions, and the dealer’s repair obligations. Under state
law, “implied warranties” may give you even more rights.
SERVICE CONTRACT. A service contract is available at an extra charge on this vehicle. Ask for details as to
coverage, deductible, price, and exclusions. If you buy a service contract within 90 days of the time of sale, state law
“implied warranties” may give you additional rights.
PRE PURCHASE INSPECTION: ASK THE DEALER IF YOU MAY HAVE THIS VEHICLE INSPECTED BY YOUR
MECHANIC EITHER ON OR OFF THE LOT.
SEE THE BACK OF THIS FORM for important additional information, including a list of some major defects that may
occur in used motor vehicles.
BUYERS GUIDE
IMPORTANT: Spoken promises are difficult to enforce. Ask the dealer to put all promises in writing. Keep this form.
___________________________________________________________________________________________________________
VEHICLE MAKE MODEL YEAR VIN NUMBER
_____________________________________________________
DEALER STOCK NUMBER (Optional)
WARRANTY
FULL LIMITED WARRANTY. The dealer will pay ____% of the labor and ____% of the parts for the covered
systems that fail during the warranty period. Ask the dealer for a copy of the warranty document for
a full explanation of warranty coverage, exclusions, and the dealer’s repair obligations. Under state
law, “implied warranties” may give you even more rights.
SERVICE CONTRACT. A service contract is available at an extra charge on this vehicle. Ask for details as to
coverage, deductible, price, and exclusions. If you buy a service contract within 90 days of the time of sale, state law
“implied warranties” may give you additional rights.
PRE PURCHASE INSPECTION: ASK THE DEALER IF YOU MAY HAVE THIS VEHICLE INSPECTED BY YOUR
MECHANIC EITHER ON OR OFF THE LOT.
SEE THE BACK OF THIS FORM for important additional information, including a list of some major defects that may
occur in used motor vehicles.
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The back of the Buyers Guide alerts you to
the problems that may occur in used vehicles.
Below is a list of some major defects that may occur in used motor vehicles.
__________________________________________________________________________________________________
DEALER
__________________________________________________________________________________________________
ADDRESS
__________________________________________________________________________________________________
__________________________________________________________________________________________________
SEE FOR COMPLAINTS
IMPORTANT: The information on this form is part of any contract to buy this vehicle. Removal of this label
before consumer purchase (except for purpose of test-driving) is a violation of federal law (16 C.F.R. 455).
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Federal Trade Commission
Bureau of Consumer Protection
Division of Consumer and Business Education
June 2008
SOLD