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     This year, more than 16 million Americans will buy a used

car. If that's what you are planning, this guide may help you.

It explains your protections under the FTC's Used Car Rule and offers some

shopping suggestions, even if you are not buying from a used

car dealer.

     Before you begin looking at used cars, think about what

car models and options you want and how much you are able or

willing to spend. You can learn about car models, options, and

prices by reading newspaper ads, both display and classified.

Also, your local library and book stores have magazines that

discuss and compare car models, options, and costs, as well as

provide information about frequency-of-repair records, safety

tests, and mileage. The U.S. Department of Transportation Auto

Safety Hotline (800-424-9393) will tell you if a car model has

ever been recalled and send you information about that recall.

Before You Look For a Used Car, Consider

     Costs. Remember, the real cost of a car includes more than

the purchase price: it includes loan terms, such as interest

rates and the length of the loan. If you plan to finance the

car, you need to know how much money you can put down and how

much you can pay monthly. Dealers and lending institutions

offer a variety of interest rates and payment schedules, so you

will want to shop for terms. If, for example, you need low

monthly payments, consider making a large down payment or

getting financing that will stretch your payments over five

years, rather than the usual three. Of course, this longer

payment period means paying more interest and a higher total


     Reliability. You can learn how reliable a model is by

checking in publications for the frequency-of-repair records.

Find out what models have repair facilities in a location

convenient to you and if parts are readily available at the

repair facility.

     Dealer Reputation. Find out from experienced people whose

opinions you respect which dealers in your area have good

reputations for sales and service. You may wish to call your

local consumer protection office and the Better Business Bureau

to find out if they have any complaints against particular


If You Buy a Used Car From a Dealer

     If you go to a dealer for a used car, look for a "Buyers

Guide" sticker on the window of each car. The Buyers Guide,

required by the Federal Trade Commission's Used Car Rule, gives

you important information and suggestions to consider. The

Buyers Guide tells you:

     Whether the vehicle comes with a warranty and, if

      so, what specific protection the dealer will provide;

     Whether the vehicle comes with no warranty ("as

      is") or with implied warranties only;

     That you should ask to have the car inspected by

      an independent mechanic before you buy;

     That you should get all promises in writing; and

     What some of the major problems are that may occur in any


     The Used Car Rule requires dealers to post the Buyers

Guide on all used vehicles, including automobiles, light-duty

vans, and light-duty trucks. "Demonstrator" cars also must have

Buyers Guides. But Buyers Guides do not have to be posted on

motorcycles and most recreational vehicles. Individuals selling

fewer than six cars a year are not required to post Buyers


     Whenever you purchase a used car from a dealer, you should

receive the original or an identical copy of the Buyers Guide

that appeared in the window of the vehicle you bought. The

Buyers Guide must reflect any changes in warranty coverage that

you may have negotiated with the dealer. It also becomes a part

of your sales contract and overrides any contrary provisions

that may be in that contract.

     As you read this brochure, you can refer to the Buyers

Guide, shown on pages 6 through 8.

"As Is--No Warranty"

     About one-half of all used cars sold by dealers come

"as is," which means there is no express or implied warranty.

If you buy a car "as is" and have problems with it, you must

pay for any repairs yourself. When the dealer offers a vehicle

for sale "as is," the box next to the "As Is--No Warranty"

disclosure on the Buyers Guide will be checked. If this box is

checked but the dealer makes oral promises to repair the

vehicle, have the dealer put those promises in writing on the

Buyers Guide.

     Some states (Connecticut, Kansas, Maine, Maryland,

Massachusetts, Minnesota, Mississippi, New York, Rhode Island,

Vermont, West Virginia and the District of Columbia) do not

permit "as is" sales for most or all used motor vehicles.

"Implied Warranties Only"

     Implied warranties exist under all state laws and come

with almost every purchase from a used car dealer, unless the

dealer tells you in writing that implied warranties do not

apply. Usually, dealers use the words "as is" or "with all

faults" to disclaim implied warranties. Most states require the

use of specific words.

     "If the dealer makes oral promises, have the dealer put

those promises in writing."

     The "warranty of merchantability" is the most common type

of implied warranty. This means that the seller promises that

the product will do what it is supposed to do. For example, a

car will run, a toaster will toast.

     Another type of implied warranty is the "warranty of

fitness for a particular purpose." This applies when you buy a

vehicle on the dealer's advice that it is suitable for a

particular use. For example, a dealer who suggests that you buy

a specific vehicle for hauling a trailer warrants, in effect,

that the vehicle will be suitable for hauling a trailer.

     If you buy a vehicle with a written warranty, but problems

arise that the warranty does not cover, you may still be

protected by implied warranties. Any limitation on the duration

of implied warranties must appear on the written warranty.

     In those states that do not permit "as is" sales by

dealers, or if the dealer offers a vehicle with only implied

warranties, a disclosure entitled "Implied Warranties Only"

will be printed on the Buyers Guide in place of the "As Is"

disclosure. The box next to this disclosure would be checked if

the dealer chooses to sell the car with implied warranties and

no written warranty. A copy of the Buyers Guide with the

"Implied Warranties Only" disclosure is shown on page 7.

Dealer Warranties

     When dealers offer a written warranty on a used vehicle,

they must fill in the warranty portion of the Buyers Guide.

Because the terms and conditions of written warranties can vary

widely, you may find it useful to compare warranty terms on

cars or negotiate warranty coverage.

     Dealers may offer a full or limited warranty on all or

some of the systems or components of the vehicle. A "full"

warranty provides the following terms and conditions:

     Warranty service will be provided to anyone who owns the

      vehicle during the warranty period when a problem is


     Warranty service will be provided free of charge,

      including such costs as returning the vehicle or removing

      and reinstalling a system covered by the warranty, when


     At your choice, the dealer will provide either a

      replacement or a full refund if the dealer is unable,

      after a reasonable number of tries, to repair the vehicle

      or a system covered by the warranty.

     Warranty service is provided without requiring you to

      perform any reasonable duty as a precondition for

      receiving service, except notifying the dealer that

     service is needed.

     No limit is placed on the duration of implied warranties.

     If any one of the above statements is not true, then the

warranty is "limited." A "full" or "limited" warranty need not

cover the entire vehicle. The dealer may specify only certain

systems for coverage under a warranty. Most used car warranties

are "limited," which usually means you will have to pay some of

the repair costs. By giving a "limited" warranty, the dealer is

telling you that there are some costs or responsibilities that

the dealer will not assume for systems covered by the warranty.

     If the dealer offers a full or limited warranty, the

dealer must provide the following information in the "Warranty"

section of the Buyers Guide:

     The percentage of the repair cost that the dealer

      will pay. For example, "the dealer will pay 100% of

      the labor and 100% 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 Buyers Guide contains a list of descriptive names for the

      major systems of an automobile where problems may occur;

     The duration of the warranty for each covered system. For

      example, "30 days or 1,000 miles, whichever occurs first"; and

     Whether a deductible applies.

     Under another federal law, the Magnuson-Moss Warranty Act,

you have a right to see a copy of the dealer's warranty before

a purchase. Examine the warranty carefully before you buy to

see what is covered and what is not. It contains more detailed

information than the Buyers Guide, such as a step-by-step

explanation of hoax to obtain repairs if a covered system or

component malfunctions. Also check who is legally responsible

for fulfilling the terms of the warranty. If a third party is

responsible, the best way to avoid potential problems is to

make sure that the third party is reputable and insured. You

can do this by asking the company for the name of their insurer

and then checking its performance record with your local Better

Business Bureau.

Unexpired Manufacturer's Warranties

     If the used vehicle is still covered by the manufacturer's

original warranty, the dealer may include it in the "systems

covered/duration" section of the Buyers Guide. This does not

necessarily mean that the. dealer offers a warranty in addition

to the manufacturer's. In some cases, a manufacturer's original

warranty can be transferred to a second owner only upon payment

of a fee. If you have any questions, ask the dealer to let you

examine any unexpired warranty on the vehicle.

Service Contracts

     When you buy a car, you may be offered a service contract,

which you can buy for an extra cost. In deciding whether you

want a service contract, consider:

     Whether the warranty that comes with your car already

      covers the same repairs that you would get under the

      service contract or whether the service contract

      protection begins after the warranty runs out. Does the

      service contract extend longer than the time you expect to

      own the car? If so, is the service contract transferable

      or is a shorter contract available?

     Whether the vehicle is likely to need repairs and their

      potential costs. The value of a service contract is determined

      by whether the cost of repairs is likely to be greater than the

      price you pay for the service contract protection.

     Whether the service contract covers all parts and systems

      of the car. Check out all claims carefully. Claims that coverage

      is "bumper to bumper" may not be entirely accurate.

     Whether there is a deductible required, and, if so,

      consider the amount and terms of the deductible.

     Whether the contract covers incidental expenses, such as

      towing and the costs of a rental car while your car is

      being serviced.

     Whether repairs and routine maintenance, such as oil

      changes, can be performed at locations other than the

      dealership from which you purchased the contract.

     Whether there is a cancellation and refund policy for the

      service contract, and what the costs are if you cancel.

     Whether the dealer or company offering the service

      contract is reputable. Read the contract carefully to

      determine who is legally responsible for fulfilling the

      terms of the contract. Some dealers sell service contracts

      that are backed by a third party. If a third party is

      responsible, you may wish to ask if the company is insured

      and to check the company's performance with your local

      Better Business Bureau.

     If a service contract is offered, the dealer must mark the

box provided on the Buyers Guide, except in those states that

regulate service contracts under their insurance laws. If the

Buyers Guide does not include a reference to a service

contract, and you are interested, ask the salesperson whether

one is available.

     When you purchase a service contract from the dealer

within 90 days of buying the vehicle, federal law prohibits the

dealer from disclaiming implied warranties on the systems

covered in that service contract. For example, if you buy a car

"as is," the car normally will not be covered by implied


     But if you buy a service contract covering the engine, you

automatically get implied warranties on the engine, which may

give you protection beyond the scope of the service contract.

Make sure you receive a written confirmation that your service

contract is in effect.

Spoken Promises

     The Buyers Guide warns consumers not to rely on spoken

promises. Oral promises are difficult, if not impossible, to

enforce. Make sure all promises you want are written into the

Buyers Guide and keep it.

Pre-Purchase Independent Inspection

     The Buyers Guide also suggests you ask the dealer whether

you may have the vehicle inspected by your own mechanic. Some

dealers will let you take the car off the lot to get an

independent inspection. Others may have reasons, such as

insurance restrictions, for denying this request. In such a

case, the dealer may permit you to bring an independent

mechanic to the used car on the lot. A dealer who refuses to

allow any independent inspection may be telling you something

about the condition of the car.

     Remember, a good-looking car, or a car that comes with a

warranty, does not necessarily run well. An independent

inspection lets you find out about the mechanical condition of

the vehicle before you buy it. Although an inspection fee by a

mechanic may seem high, when you compare it to the price of the

car, it can be worth the cost.

Vehicle Systems

     The Buyers Guide includes a list of the 14 major systems

of an automobile and some of the major problems that may occur

in these systems. You may find this list helpful to evaluate

the mechanical condition of the vehicle. The list also may be

useful when comparing warranties offered on different cars or

by different dealers.

Dealer Identification and Consumer Complaint Information

     On the back of the Buyers Guide, you will find the name

and address of the dealership. In the space below that, you

will find the name and telephone number of the person at the

dealership to contact if you have any complaints after the


Spanish Language Sales

     If you buy a used car and the sales talk is conducted in

Spanish, you are entitled to see and keep a Spanish-language

version of the Buyers Guide.

If You Buy a Used Car From a Private Party

     Many cars are available privately, such as through

classified ads in a newspaper. If you are shopping for a car

from an individual, you should understand several differences

between sales made by individuals and by dealers.

     Private sellers generally are not covered by the Used Car

      Rule and therefore, do not have to use the Buyers Guide.

      However, you still can follow the Guide's suggestions. For

      example, you can refer to the list of potential problems

      displayed on the back of the Buyers Guide shown in this

      brochure. In addition, ask the seller whether you may have

      the vehicle inspected by your own mechanic and whether you

      may take it on a test drive.

     Private sales usually are not covered by the "implied

      warranties" of state law. So, a private sale probably will

      be on an "as is" basis, unless your contract with the

      seller specifically provides otherwise. If you have a

      written contract, the seller must live up to the promises

      stated in the contract.

     "An independent inspection lets you find out about the

mechanical condition of the vehicle before you buy it."

     Depending on its age, the car also may be covered by a

      manufacturer's warranty or a separately purchased service

      contract. However, warranties and service contracts may

      not be transferable, or there may be limitations or costs

      for a transfer. Before you purchase the car, ask the

      seller to let you examine any warranty or service contract

      on the vehicle.

     Many states require that dealers, but not individuals,

      ensure that their vehicles will pass state inspection or

      carry a minimum warranty before they offer them for sale.

      Ask your state's attorney general's office or a local

      consumer protection office about the requirements on

      individuals and on dealers in your state.

Before You Buy Any Used Car

    If you are interested in a particular car, ask the dealer

or owner if you can take it on a test drive. Try to drive the

car under many different conditions, such as on hills,

highways, and in stop-and-go traffic.

     You also may want to ask the dealer or owner whether the

car has ever been in an accident. Find out as much as you can

about the car's prior history and maintenance record. Getting

an independent inspection by an experienced mechanic is a good

idea before purchasing any used car.

     Be prepared to negotiate. Many dealers and individuals are

willing to bargain on price and/or on warranty coverage.

If You Have Problems

     If something goes wrong with your car and you think that

it is covered by a warranty (either express or implied) or a

service contract, refer to the terms of the warranty or

contract for instructions on how to get service. If a dispute

arises concerning the problem, there are several steps you can


Try To Work It Out With The Dealer

     First, try to resolve the problem with the salesperson or,

if necessary, speak with the owner of the dealership. Many

problems can be resolved at this level. However, if you believe

that you are entitled to service, but the dealer disagrees, you

can take other steps.

     If your warranty is backed by a car manufacturer and you

have a dispute about either service or coverage, contact the

local representative of the manufacturer. This local or "zone"

representative has the authority to adjust and make decisions

about warranty service and repairs to satisfy customers.

     Some manufacturers also are willing to repair certain

problems in specific models free of charge, even if the

manufacturer's warranty does not cover the problem. Ask the

manufacturer's zone representative or the service department of

a franchised dealership that sells your car model whether there

is such a policy.

Other Approaches You Can Try

     If you cannot get satisfaction from the dealer or from a

manufacturer's zone representative, contact the Better Business

Bureau or a state agency, such as the office of the attorney

general, the department of motor vehicles, or a consumer

protection office. Many states also have county and city

offices that intervene or mediate on behalf of individual

consumers to resolve complaints.

     You also might consider using a dispute resolution

organization to arbitrate your disagreement if you and the

dealer are willing. Under the terms of many warranties, this

may be a required first step before you can sue the dealer or

manufacturer. 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 mediation through the Automotive Consumer Action

Program (AUTOCAP), a dispute resolution program coordinated

nationally by the National Automobile Dealers Association and

sponsored through state and local dealer associations in many

cities. Check with the dealer association in your area to see

if they operate a mediation program.

     If none of these steps is successful, you can consider

going to small claims court, where you can resolve disputes

involving small amounts of money for a low cost, often without

an attorney. The clerk of your local small claims court can

tell you how to file a suit and what the dollar limit is in

your state.

     The Magnuson-Moss Warranty Act also may be helpful. Under

this federal law, you can sue based on breach of express

warranties, implied warranties, or a service contract. If

successful, consumers can recover reasonable attorney's fees

and other court costs. A lawyer can advise you if this law

applies to your situation.

For Further Help

     If you want additional information about warranties or

service contracts or about new car leasing or buying, send for

these free FTC brochures:


     Service Contracts

     Car Ads: Low-Interest Loans and Other Offers

     New Car Buying Guide

     A Consumer Guide to Vehicle Leasing

     Write: Public Reference, Federal Trade Commission,

Washington, DC 20580.

     If you have additional questions about the Used Car Rule,

contact the Federal Trade Commission Office nearest you.

Federal Trade Commission Headquarters

6th & Pennsylvania Avenue, N.W.

Washington, DC 20580

(202) 326-2222

TDD: (202) 326-2502

Federal Trade Commission Regional Offices

1718 Peachtree Street, N.W.

Atlanta, Georgia 30367

(404) 347-4836

10 Causeway Street

Boston, Massachusetts 02222

(617) 565-7240

55 East Monroe Street

Chicago, Illinois 60603

(312) 353-4423

668 Euclid Avenue

Cleveland, Ohio 44114

(216) 522-4207

100 N. Central Expressway

Dallas, Texas 75201

(214) 767-5501

1405 Curtis Street

Denver, Colorado 80202

(303) 844-2271

11000 Wilshire Boulevard

Los Angeles, California 90024

(213) 209-7575

150 William Street

New York, New York 10038

(212) 264-1207

901 Market Street

San Francisco, California 94103

(415) 744-7920

915 Second Avenue

Seattle, Washington 98174

(206) 553-4656

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