Buying a Car/Registration

AuthorJeffrey Wilson
Pages57-62

Page 57

Background

Buying an automobile involves three essential components. First, there are the matters related to the vehicle itself, including product guarantees and warranties. Second, there are the matters relating to transferring ownership of the vehicle from the manufacturer or dealer to the buyer. Third, there are the matters required of the buyer to properly register and insure the vehicle before the buyer may operate it on a public road.

Consumer Protections

Before individuals purchase a vehicle, there are already several federal laws at work that govern the quality and safety of products available for their purchase. Most of these are found under Title 15 (Commerce and Trade) of the U.S. Code.

The federal Automobile Information Disclosure Act, 15 USC 1231 et seq., requires automobile manufacturers and importers of new cars to affix a sticker on the window of each vehicle, called the "Monroney label." The label must list the base price of the vehicle, each option installed by the manufacturer and its suggested retail price, the transportation charge, and the car's fuel economy (in miles per gallon). Only the ultimate user (the buyer) can remove the label.

For used vehicles, the Federal Trade Commission (FTC) has passed its Used Car Rule under 15 USC 41, which applies in all states except Maine and Wisconsin. (These states have adopted their own rules governing used car sales.) Under the Used Car Rule, dealers must prominently post buyer's guides on used vehicles that advises whether the vehicles comes with a warranty and what type or are sold "as is." The buyer's guide must be given to the buyer if the buyer purchases a used vehicle, and it becomes part of the purchase contract, and its terms override any conflicting terms in the contract.

The National Traffic and Motor Vehicle Safety Act of 1966, 15 USC 1381 et seq., has been broken down and re-codified over the years into many legal progeny. The following laws address such matters as motor vehicle or driver safety; minimum standards for motor vehicle emissions, fuel economy, bumper standards, or crash-worthiness; motor vehicle manufacturer recalls or advisories; manufacturer and dealer disclosures, etc.

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The Motor Vehicle Information and Cost Saving Act, 15 USC 1901 et seq., (much of which has been broken down into additional acts and laws, and recodified under Title 49, Transportation) contains numerous provisions for minimum quality and safety standards, disclosure, and reporting requirements.

The federal Truth in Mileage Act of 1986, commonly referred to as the "Anti-Tampering Odometer Law," (PL 99-579) (49 CFR 580) criminalizes any act that falsifies actual odometer readings and mandates that each transferor of a motor vehicle furnish the transferee certain information concerning the vehicle's history.

The Clean Air Act, 42 USC 7401 et seq., addresses minimum standards for exhaust emissions on motor vehicles.

The Anti-Car Theft Act of 1992, 15 USC 2021 et seq., establishes, among other things, a national motor vehicle title information system to disrupt attempts to obtain legitimate vehicle ownership by auto thieves. It also provides for the inspection of exports for stolen vehicles.

Product Warranties

The federal Magnuson-Moss Warranty Act, 42 USC 2301 et seq. (1984) is applicable to warranties for purchases of automobiles. Under the Act, any warranty accompanying a product must be designated as either "full" or "limited." Importantly, if a manufacturer has given a full or limited warranty on a new car, it cannot disclaim any implied warranties. However, some states have laws that effectively void any implied warranty for buyer's guide used vehicles that are checked "As Is-No Warranty."

Implied warranties are exactly that: implied. They follow the sale of certain consumer goods automatically, without any express writing or document. The implied warranty of merchantability basically guarantees that the product is what it is stated to be and is adequate for the purpose for which it is purchased. Under the Uniform Commercial Code (UCC), adopted in all 50 states, this implied warranty only applies to sellers in the business of selling the particular item and does not apply to incidental sales or cross-consumer sales.

However, the implied warranty of fitness for a particular purchase applies to all sellers, even nonprofessionals. Under this warranty, the seller is presumed to guarantee that the car sold (e.g., a restored race car), is fit for the particular purpose for which it is being sold.

Lemon Laws for New and Used Vehicles

All 50 states have enacted "lemon laws" to protect consumers from defective new automobiles. Some states have enacted separate lemon laws to cover used vehicles. While their application and protections vary from state to state, they generally protect consumers from having to keep defective new vehicles. Lemon laws entitle buyers to a replacement new vehicle or a full refund if a dealer cannot fix a...

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