The Used-Car Rule

Pick one issue that you think members of Congress would not dare to side with the business lobby against consumers. Chances are that you would choose siding with used-car salesmen against used-car buyers. Well, last November, 216 representatives signed on a bill to veto the used-car disclosure rule which the Federal Trade Commission (FTC) issued in watered-down fashion after five years of study.

Many of those politicians–180 of them to be exact–received a total of more than $500,000 in campaign contributions during the past three years from the National Automobile Dealers Association (NADA).

National poll after national poll of occupations shows that used-car salesmen rank very low in public opinion. Not all, but too many such dealers and salesmen deceive or mislead buyers about the condition of the used car that is purchased. The FTC record was replete with evidence about used-car defects not being disclosed and other deceptive practices that cost motorists money, injuries, lost time and aggravation.

It is hard to understand why anybody, including car dealers, would object to the FTC rule. All it does is require used-car dealers to put in writing, by filling out a stickeron the car window, any guarantees they offer and any major defects they know about in the automobile. The rule does not require any guarantees or inspections for defects. All it does is make dealers who do offer warranties or know about defects in their cars tell consumers about them. This standard is far less than a used-car lot Golden Rule. In fact, an association of used-car lot owners supported such an approach in 1979. But the mainstream auto dealers’ association, NADA, is in a panting rage and is determined to buy the two-house veto of the rule now on Capitol Hill. Under the two-house veto provision governing the FTC (a provision many scholars believe is unconstitutional) , the House and Senate are expected to vote between the middle of April and the middle of May.

The present rule is so mild, compared to its two earlier versions, that President Reagan’s consumer adviser, Virginia Knauer, has come out in support. In probably the only visible initiative she has taken all year, she wrote to Congressman James Florio that the disclosure requirement is a “reasonable, straightforward and uncomplicated approach geared toward alleviating a pervasive problem in the used-car industry….” Knauer went on to say that the “rule may serve as a positive marketing device for honest…members of the industry who provide truthful information to consumers only to be undersoldby less scrupulous competition.”

But the most searing rebuttal to the dealers came in congressional testimony of Pat Goss, a veteran of 23 years’ experience in the diagnosis, repair, sale and appraisal of passenger cars and light trucks. Often seen on Washington area television shows, Goss runs his own automotive business in suburban Washington (5301 Kenilworth Ave., Riverdale, Md. 20840).

Describing as “unconscionable” the position of opponents that the motorist should be responsible for trying to determine if a safety problem exists, Goss takes on the assertion that the FTC rule is too ambiguous: “The frame of the car is either damaged or it is not; an engine either leaks oil or it does not; the differential either makes noise or vibrates or it does not; the steering wheel either has too much play or it does not. These are conclusions that are arrived at every day by thousands of mechanics.”

Goss went down the list of NADA objections and rejected them item by item, including the one that said the rule would cost too much.

There are growing signs that car owners are hearing about the influence-peddling on Capitol Hill to veto the used-car rule. If people would call the local office of their representative or senator, or write a letter, to inquire as to whose side the legislator is on, you can be guaranteed that the politicians will turn their antennae in your direction. What is enough? About 300 or 400 calls and letters per lawmaker will do in most cases; some will require far fewer reminders.

If there is one thing politicians do not want to happen is for automobiles to be motoring around their districts this election year with bumper stickers saying “Would you buy a used car from Rep. X or Sen. Y?”