The Federal Trade Commission's (FTC) Used Car Rule requires dealers to display a “Buyers Guide” on used vehicles offered for sale. An Arkansas auto dealer, Abernathy Motor Company, and its two principals, are charged with failing to do so and could be facing civil penalties of up to $16,000.
“Used car dealers are required to post a Buyers Guide providing warranty and other important information on the cars they offer for sale. That’s the law,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Consumers have a right to receive this information up-front to help them make an informed buying decision.”
The rule -- which took effect in 1985 -- specifically requires used car dealers to disclose whether the car comes with a dealer’s warranty or is being sold “as is.” If the car is sold with a dealer’s warranty, the Buyers Guide must list its basic terms and conditions, 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.
Warnings issued and not heeded
In January 2013, the FTC announced that its Southwest Region Office had warned 11 used car dealerships in Jonesboro, Arkansas, that their sales practices violated the Used Car Rule. All but Abernathy Motor Company subsequently came into compliance.
Abernathy has four used car sales locations in Arkansas: two in Blytheville, one in West Memphis, and one in Jonesboro. The FTC’s complaint also names the company’s owners, Wesley Abernathy and David Abernathy, and an affiliated dealership, Ab’s Best Buys AMC Inc., as defendants.
Failure to display
According to the complaint, the FTC visited the Abernathy dealership in Jonesboro in November 2012, and found that none of the vehicles offered for sale displayed a Buyers Guide. The agency informed the dealership of that fact, and sent the dealership a copy of the Guide and the FTC publication, A Dealer’s Guide to the Used Car Rule.
In May 2013, the FTC re-visited the Abernathy dealership, and visited Ab’s Best Buys AMC Inc., and found both dealerships were offering used vehicles for sale that did not display a Buyers Guide.