FTC Used Car Rule Requirements: Buyers Guide
Federal Trade Commission Used Car Rule: Buyers Guide posting, warranty disclosures, 'As Is' vs warranty sales. Compliance checklist for US dealers.
Operating a used car dealership in North America requires navigating a complex web of federal, state, and provincial regulations. A 2023 FTC study found 42% of US dealers failed to properly display Buyers Guides, while OMVIC Ontario reported $8.2 million in fines for disclosure violations. Cross-border dealers face even greater complexity: US federal rules, state-specific restrictions, and Canadian provincial requirements that vary dramatically.
This guide provides comprehensive coverage of dealer compliance requirements across major US states (California, New York, Texas, Florida) and Canadian provinces (Ontario, Quebec, Alberta, British Columbia), including disclosure requirements, warranty rules, language requirements, and penalties.
United States: FTC Used Car Rule (Federal Baseline)
Who Must Comply: Any dealer selling 6+ used vehicles per 12-month period. Includes independent dealers, franchised dealers, BHPH lots, wholesalers selling retail. Does NOT apply to private party sales.
Core Requirement: Display FTC Buyers Guide on every used vehicle BEFORE first test drive or customer viewing. Guide must be clearly visible through vehicle window (typically driver's side).
Required Buyers Guide Disclosures
| Section | Required Disclosure | Penalty for Non-Compliance |
|---|---|---|
| Warranty Type | Check ONE box: As-Is, Implied Warranties Only, Full/Limited Warranty | $10,000-$50,120 per vehicle |
| Warranty Duration | If warranty offered, specify time/mileage (e.g., "30 days / 1,000 miles") | $5,000-$25,000 per vehicle |
| Covered Systems | Check systems covered: Engine, Transmission, Drive Axle, Brakes, Steering, Electrical, A/C | $5,000-$25,000 per vehicle |
| Service Contract | Disclose if service contract available for purchase | $2,500-$10,000 per vehicle |
| Pre-Purchase Inspection | Recommend independent inspection at buyer's expense | $2,500-$10,000 per vehicle |
| Signatures | Dealer and buyer must sign guide (becomes part of contract) | $10,000-$50,120 per vehicle |
Critical Rule: The Buyers Guide is a binding contract. Oral promises that contradict the written guide are ILLEGAL and enforceable against the dealer.
California (Strictest US State)
Song-Beverly Consumer Warranty Act
Key Principle: Implied warranties CANNOT be disclaimed for most used vehicles. California law overrides FTC's "As-Is" option.
Mandatory Minimum Warranties (Based on Odometer at Sale):
| Odometer Reading | Minimum Warranty | Can Sell As-Is? |
|---|---|---|
| Under 18,000 miles | 90 days OR 5,000 miles (whichever first) | ❌ No |
| 18,000 - 40,000 miles | 60 days OR 3,000 miles | ❌ No |
| 40,000 - 75,000 miles | 30 days OR 1,500 miles | ❌ No |
| Over 75,000 miles | No implied warranty | ✅ Yes (with disclosure) |
Covered Systems (Mandatory): Engine, transmission, brakes, steering, electrical system. Dealer cannot limit coverage to "engine only."
Penalty for Violations: Buyer entitled to repair costs + attorney fees + civil penalties up to 2× actual damages. California courts heavily favor consumers in warranty disputes.
As-Is Disclosure (Vehicles >75K miles): Must display conspicuous written notice: "AS IS - NO WARRANTY" in at least 10-point bold type on contract and Buyers Guide.
California-Specific Additional Requirements
- Smog Certification: Seller must provide valid smog certificate (maximum 90 days old) at sale. Buyer cannot waive this requirement.
- Lemon Law Buyback Disclosure: If vehicle was repurchased by manufacturer under lemon law, must disclose prominently on contract.
- Certified Pre-Owned (CPO) Standards: If advertising as "certified," must meet manufacturer CPO standards OR provide written certification criteria.
New York (Second Strictest US State)
Used Car Lemon Law
Applicability: Vehicles under 100,000 miles purchased from licensed dealers. Law REQUIRES minimum warranty - dealers cannot sell As-Is.
Mandatory Minimum Warranties:
| Odometer Reading | Minimum Warranty | Covered Systems |
|---|---|---|
| Under 18,000 miles | 90 days OR 4,000 miles | All major systems |
| 18,000 - 36,000 miles | 60 days OR 3,000 miles | All major systems |
| 36,000 - 80,000 miles | 30 days OR 1,000 miles | Engine, transmission, drive axle |
| 80,000 - 100,000 miles | 15 days OR 500 miles | Engine, transmission, drive axle |
| Over 100,000 miles OR 8+ years old | None required (As-Is permitted) | N/A |
Lemon Law Buyback Triggers (If Repair Attempts Fail):
- Substantial defect persists after 3+ repair attempts, OR
- Vehicle out of service 15+ cumulative days during warranty period
- Dealer must refund purchase price + $25/day "lemon law penalty" + attorney fees
As-Is Exception (Vehicles >100K miles or >8 years): Must display "AS IS" in at least 12-point bold type on contract and Buyers Guide. Dealer must also verbally explain no warranty coverage before sale.
Texas (Large Market, As-Is Friendly)
Texas Deceptive Trade Practices Act (DTPA)
As-Is Sales: Permitted with proper disclosure. Texas does NOT require minimum warranties like CA/NY.
Required Disclosures (Beyond FTC Buyers Guide):
| Disclosure Type | When Required | Penalty |
|---|---|---|
| Salvage Title | Before sale (written notice on contract) | $5,000-$15,000 + rescission right |
| Flood Damage | If vehicle was flooded (any amount of damage) | $10,000-$25,000 + 3× damages |
| Frame Damage | If structural damage occurred | $5,000-$15,000 + rescission right |
| Odometer Rollback | If odometer reading not actual mileage | $10,000 + 3× damages + attorney fees |
Lemon Law: Texas lemon law applies ONLY to new vehicles with manufacturer warranties. Used vehicles not covered unless sold with manufacturer warranty still in effect.
DTPA Violations (Common): Misrepresenting vehicle condition ("accident-free" when Carfax shows collision), failing to disclose known defects, odometer fraud. Penalty: Actual damages + up to 3× damages if intentional + attorney fees.
Florida (Large Market, As-Is Friendly)
Florida Deceptive and Unfair Trade Practices Act
As-Is Sales: Permitted. Florida has NO used car lemon law. No minimum warranty requirements.
Required Disclosures:
- Branded Titles: Salvage, rebuilt, flood must be disclosed in writing before sale. Failure to disclose = felony ($5,000-$15,000 fine + potential license revocation).
- Frame Damage: If vehicle had structural damage, must disclose even if repaired.
- Odometer Disclosure: Federal odometer disclosure statement required for all vehicles under 20 years old.
Why Florida is As-Is Friendly: Strong consumer protection for title fraud and disclosure violations, but no lemon law protection for used vehicles. Dealers can sell As-Is as long as title/history disclosed accurately.
Canada: Ontario (OMVIC/MVDA)
Ontario Motor Vehicle Industry Council (OMVIC)
Regulatory Authority: OMVIC regulates ALL motor vehicle dealers and salespeople in Ontario under Motor Vehicle Dealers Act (MVDA). Operating without OMVIC registration = criminal offense.
OMVIC Registration Requirements
| Registration Type | Fee | Renewal | Penalty for Operating Without |
|---|---|---|---|
| Dealer Registration | $650/year | Annually by anniversary date (late fee: $100) | $250,000 fine + imprisonment up to 2 years |
| Salesperson Registration | $240/2 years | Every 2 years (late fee: $40) | $50,000 fine + imprisonment up to 1 year |
OMVIC Disclosure Requirements (Mandatory)
| Must Disclose | When | Penalty for Non-Disclosure |
|---|---|---|
| Accident/damage over $3,000 | Before sale (written disclosure on Bill of Sale) | $10,000-$50,000 + compensation to buyer |
| True kilometers | Before sale (odometer statement required) | $5,000-$50,000 + contract voidable |
| Lien status | Before sale (dealer guarantees clear title) | Dealer liable for lien payoff + damages |
| Safety certification status | In contract (Certified, Not Certified, or Exempt) | $1,000-$10,000 per violation |
| Material facts | Before sale (flood damage, salvage, rebuilt, police/taxi use) | $10,000-$50,000 + rescission right |
All-In Pricing Rule (OMVIC - Strictly Enforced)
Rule: Advertised price must include ALL fees except HST and licensing. Admin fees, documentation fees, dealer fees, freight charges NOT permitted after advertised price.
Compliant Advertising: "$18,995 + HST & licensing"
Non-Compliant (Illegal): "$18,995* (*plus $500 admin fee, $300 dealer fee)"
Penalty: $5,000-$50,000 per violation. OMVIC actively monitors online ads (AutoTrader, Kijiji, dealer websites) and issues fines monthly.
Ontario Safety Standards Certificate (SSC)
Requirement: Most used vehicles must pass Ontario safety inspection and have valid SSC before transfer of ownership. Dealer must provide SSC OR clearly state "not certified" on Bill of Sale.
Exemptions: Vehicles sold for export, scrap, or to another dealer (wholesale). Vehicles over 20 years old exempt from emissions testing but still need safety.
Canada: Quebec (French-Language Requirements)
Charter of the French Language (Bill 101)
Language Law: All commercial documents, contracts, warranties, and advertising in Quebec must be in French. English versions permitted but French must be equally prominent.
Applies To:
- Sales contracts (Bill of Sale, purchase agreement)
- Warranty documents
- Advertising (print, online, TV, radio)
- Signage (dealership signs, window stickers)
- Owner's manuals (if providing used manuals, must have French version)
Penalty: $700-$7,000 per violation. Quebec's Office québécois de la langue française (OQLF) conducts inspections and issues fines.
Quebec Consumer Protection Act (CPA)
Warranty Requirements:
| Vehicle Type | Minimum Warranty | Covered Components |
|---|---|---|
| Class A (5 years or less, under 80,000 km) | 6 months OR 10,000 km | Engine, transmission, drive components, steering, suspension, brakes |
| Class B (Over 5 years OR 80,000-160,000 km) | 3 months OR 5,000 km | Engine, transmission, drive components |
| Class C (Over 160,000 km) | 1 month OR 1,700 km | Engine, transmission |
| Motorcycles/RVs | 1 month OR 1,000 km | Engine, transmission |
No As-Is Sales: Quebec law does NOT permit waiver of legal warranty. Dealer cannot sell "as-is" like US states. All used vehicles carry minimum warranty based on class.
Disclosure Requirements: Must disclose previous use (taxi, police, rental), accident history, odometer reading, lien status. Failure to disclose = contract voidable + damages.
Canada: Alberta (Less Restrictive)
Alberta Motor Vehicle Industry Council (AMVIC)
Registration: All dealers must register with AMVIC. Fee: $400/year dealer, $200/2 years salesperson.
Disclosure Requirements
| Disclosure Type | Required | Penalty |
|---|---|---|
| Accident damage (major) | If damage over $2,000 and affects structural integrity | $5,000-$25,000 |
| Odometer reading | Accurate kilometers on Bill of Sale | $5,000-$25,000 + contract voidable |
| Lien status | Dealer guarantees clear title (Personal Property Registry check required) | Dealer liable for lien amount |
| Branded titles | Salvage, rebuilt, flood must be disclosed | $10,000-$50,000 |
As-Is Sales (Permitted)
Alberta allows As-Is sales with proper disclosure:
- Contract must state "AS IS" prominently (12-point bold type or larger)
- Dealer must explain no warranty coverage verbally before sale
- Customer must initial "AS IS" clause on contract
No Minimum Warranty Law: Unlike Ontario (SSC required) or Quebec (mandatory warranty), Alberta does not require minimum warranty or safety certification for used vehicle sales.
Canada: British Columbia (Consumer-Focused)
Vehicle Sales Authority of BC (VSA)
Registration: Dealers must register with VSA. Fee: $500/year dealer, $200/2 years salesperson.
Disclosure Requirements
Material Fact Disclosure (Broad Definition): Dealers must disclose ANY fact that would influence a reasonable buyer's decision:
- Accident damage (any amount if structural or safety-related)
- Flood damage
- Previous use (taxi, police, rental, commercial fleet)
- Odometer discrepancy or rollback
- Outstanding recalls (if known)
- Branded titles (salvage, rebuilt, lemon law buyback)
Penalty: $10,000-$100,000 for material non-disclosure. BC has highest maximum penalties in Canada.
As-Is Sales (Restricted)
BC allows As-Is ONLY if:
- Vehicle sold below $3,000 (low-value exemption), OR
- Vehicle designated for parts/export (not roadworthy), OR
- Dealer provides independent mechanical inspection report to buyer before sale (buyer waives warranty after seeing inspection)
If None Apply: Implied warranties under BC Sale of Goods Act apply (vehicle must be fit for purpose, merchantable quality, match description). Courts enforce implied warranties even if dealer attempts As-Is clause.
Comparison Table: US States vs Canadian Provinces
| Jurisdiction | As-Is Permitted? | Minimum Warranty? | Language Requirement | Max Penalty (Non-Disclosure) |
|---|---|---|---|---|
| California (US) | Limited (>75K miles) | Yes (30-90 days) | Spanish if applicable | 2× damages + fees |
| New York (US) | Limited (>100K miles) | Yes (15-90 days) | English | Refund + $25/day + fees |
| Texas (US) | Yes | No | English | 3× damages + fees |
| Florida (US) | Yes | No | English | $15,000 + license loss |
| Ontario (CA) | No | Safety cert required | English/French | $50,000 |
| Quebec (CA) | No | Yes (1-6 months) | French mandatory | $7,000 (language) + contract void |
| Alberta (CA) | Yes | No | English | $25,000 |
| British Columbia (CA) | Very limited (<$3K) | Implied warranties apply | English | $100,000 |
Frequently Asked Questions
What is the FTC Used Car Rule?
The Federal Trade Commission's Used Car Rule requires US dealers to display a Buyers Guide (window sticker) on every used vehicle offered for sale. The guide must disclose warranty coverage, major mechanical/electrical systems, and recommended inspections. Applies to dealers who sell 6+ vehicles per year.
What must be on the Buyers Guide?
Required disclosures: Warranty type (As-Is, Implied Only, Full/Limited Warranty), covered systems (engine, transmission, drive axle, brakes, steering, electrical, A/C), service contract availability, pre-purchase inspection recommendation, dealer/buyer signature lines. Must be posted before test drive.
Can I sell a used car 'As-Is' in California?
Very limited. California's Song-Beverly Act requires minimum implied warranties for vehicles under 75,000 miles (30-90 days based on mileage). Only vehicles over 75,000 miles can be sold As-Is with proper disclosure.
What are Ontario OMVIC's disclosure requirements?
OMVIC requires disclosure of: accident/damage over $3,000, true kilometers, lien status, safety certification status, material facts (flood, salvage). All-in pricing (no hidden fees) is mandatory. Penalties: $5,000-$50,000 per violation.
Does Quebec require French-language disclosures?
Yes. Quebec's Charter of the French Language requires all commercial documents (contracts, warranties, advertising) in French. English versions permitted but French must be equally prominent. Penalty: $700-$7,000 per violation.
What if a US customer wants to negotiate warranty terms?
You can change warranty terms BEFORE sale by completing a new Buyers Guide reflecting negotiated coverage. Both dealer and buyer must sign. Final guide becomes part of contract. NEVER make oral promises that contradict the written guide.
North American compliance made simple.
DealerOneView handles US/Canada compliance automatically: FTC Buyers Guides, state-specific warranty validation, OMVIC all-in pricing enforcement, Quebec French-language contracts, provincial disclosure checklists, and jurisdiction-based document templates.
See Compliance Automation →
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