The Used Motor Vehicle Trade Regulation Rule, or the Used Car Rule, was put into effect in 1985. Most car dealers who sell, or offer for sale, more than 5 used vehicles in a 12-month period must comply with the rule. The 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. The Rule additionally applies in the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, and American Samoa.

The Rule requires dealerships to display a Buyers Guide on the used cars that are for sale. This sticker discloses whether the dealer offers a warranty and, if so, its terms and conditions. Being transparent with your consumer and following the law, this should include the duration of the coverage, the percentage of total repair costs the dealer will pay, and which vehicle systems the warranty covers. 

You must post a Buyers Guide before displaying a used vehicle that is for sale or let a customer inspect if intending to buy it, even if the car is not fully prepared for delivery. You also must display a Buyers Guide on used vehicles for sale on your lot through consignment, power of attorney, or other agreement. At public auctions, dealers and the auction company must comply. The Rule does not apply at auctions that are closed to consumers.

While the rule seems easy to follow, failing or forgetting to do so puts your dealership at risk of penalties and fines up to $16,000 for each violation. However, Compliance Prep can help eliminate that risk for you and your dealership. Sign up today for immediate access to live webinars, in-depth courses, expert coaching, and all the crucial information you need to know.