RVDA Offers Update on FTC’s ‘Used Car Rule’
Editor’s Note: The following update was issued by the Recreation Vehicle Dealers Association’s (RVDA) Brett Richardson, director of legal and regulatory affairs, on the Federal Trade Commission’s (FTC) used car rule and how it applies to RV dealers.
The Federal Trade Commission (FTC) has recently issued warnings to 11 car dealers the agency says violated its used car rule and did not display FTC Buyers Guides. This is a good time to remind motorized and towable RV dealers the rule may apply to your dealership in two limited circumstances.
First, there is the situation where an RV dealer sells a used motorized RV with a gross vehicle weight rating (GVWR) less than 8,500 pound. It is safe to say that there are very few motorhomes with a GVWR of 8,500 lbs or less. If the RV has a GVWR greater than 8,500 lbs, then you do not have federal compliance obligations. However, if you sell a motorized RV less than 8,500 pounds GVWR, then you do have compliance obligations. The rule does not apply to travel trailers and fifth-wheels since they are not motorized.
A second situation where RV dealers may have FTC used car rule obligations, arises when an RV dealer accepts a used vehicle in trade and decides to display that vehicle for sale. Most automobile dealers who sell used vehicles at their dealership must comply with the FTC’s used car rule. RV dealers who accept used cars or trucks as trades on RVs also need to comply with the rule if they sell more than five used motor vehicles in a 12-month period with a GVWR of less than 8,500 pounds.
In general, RV dealers wholesale used motorized vehicles they receive in trade for an RV. But we all know situations where dealers may display tow vehicles they receive in trade for sale; or when dealers receive luxury vehicles they know will sell quickly in their market and decide to go ahead and display them on the lot. If this happens more than five times a year at your dealership, then you may be obligated to display an FTC Buyer’s Guide on the sixth used vehicle displayed.
The FTC used car rule applies in all states except Maine and Wisconsin. These two states are exempt because they have similar regulations that require dealers to post disclosures on used vehicles. If you are an RV dealer in those states – be sure to check your state requirements – they may be more stringent than the federal rules.
If your dealership displays qualifying used vehicles, you must post a Buyers Guide before “offering” a used vehicle for sale. A vehicle is offered for sale when you display it for sale or let a customer inspect it for the purpose of buying it, even if the car is not fully prepared for delivery.
If you display trade-in vehicles for sale, and would like more information, please review the FTC’s publication, A Dealer’s Guide to the Used Car Rule or send an e-mail to firstname.lastname@example.org for more information.