Used Car Industry Best Practices - Better Business Bureau

? Make sure any seeming discrepancies between what was discussed verbally with the consumer and what is written into the contract are explained, or corrected where necessary.

? Provide consumers with the full terms and conditions of any warranty provided or sold with the vehicle purchase, and encourage them to read it carefully.

In regard to the title transfer process

? Take a moment to explain the title transfer process to consumers, advising as to when they should reasonably expect to receive their title, any anticipated delays, and who to contact if they haven't received their title within the specified timeframe.

? Where appropriate, remind Minnesota consumers that they can check on the status of a title through a `Title Lookup' feature on the Minnesota Department of Public Safety's website, at dps.. North Dakota consumers can contact the North Dakota Department of Transportation Motor Vehicle Division at dot..

When performing repair work or service

? Provide consumers with a detailed invoice showing all work completed, making sure they understand all charges.

? Take time to review repair work verbally with the consumer, advising on any `next steps' they may wish to take if a vehicle issue persists.

? Many consumers filing repair-related complaints through BBB believe they are entitled to a full or partial refund when repair attempts are unsuccessful. Make sure any relevant company policies on repairs and labor charges are available for consumers to review, and be prepared to discuss possible resolutions.

For further information on BBB dispute resolution services, complaint trends within the used car industry, or the BBB's free `Prior to Publication' Advertising Review services, please feel free to contact:

Steve Farr, Auto Industry Liaison 651-695-2430 steve.farr@

Used Car Industry Best Practices

Better Business Bureau of Minnesota and North Dakota 220 S. River Ridge Circle, Burnsville, MN 55337

651-699-1111 ? ask@ ?

Better Business Bureau of Minnesota and North Dakota (BBB) held a series of Independent Auto Dealer Industry Group meetings, with the goal of helping used auto dealers better anticipate potential consumer issues, reduce the number of complaints filed against the industry, and build greater trust with consumers. Participating dealers helped BBB create a series of consumer tips for distribution (available in a separate document) and discussed industry best practices. BBB encourages used auto dealers to follow these best practices in an effort to reduce consumer complaints and improve the overall image of the industry:

In advertising, including dealer websites

? When presenting monthly payment amounts in advertising, adhere to FTC rules under the Truth in Lending Act. If the amount of a monthly payment is shown (e.g., "$199 / month"), the length of term, APR and amount of any required down payment must also be provided.

? Claims such as "guaranteed financing" or "we finance everyone" should not be used unless literally true. If guaranteed financing carries significant conditions (e.g., minimum down payment required), these should be noted in the advertising.

? When inventory is presented in advertising or online, ensure the information is as up to date as possible, and be transparent about vehicle condition. Remember consumers may have different interpretations of phrases such as "runs great" or "like new".

When buying, inspecting and reconditioning vehicles

? Many consumers filing complaints through BBB seem to be under the impression that used cars for sale must meet minimum standards of safety and drivability, even when purchased "as is".

? While Minnesota and North Dakota do not have statemandated safety inspections, dealers should familiarize themselves with relevant state statutes on safety concerns such as tire condition, and should be aware that dealers may be held liable if a court of law determines that a dealer was negligent in allowing a safety issue to go unaddressed.

In displaying vehicles on the lot

? All vehicles must display a Buyer's Guide sheet "conspicuously and prominently" to comply with the FTC's Used Car Rule.

? Make sure the Buyer's Guide is filled out completely, clearly indicating whether a vehicle comes with a warranty or is sold "as is". Doing so allows consumers to make an informed purchase decision -- particularly when buying "as is" -- and can help prevent misunderstandings later.

When arranging financing for customers

? As some dealers offer different forms of financing (e.g., `Buy Here Pay Here') with different approval processes, make sure staff is able to explain the finance process clearly and answer any questions about how a customer's personal or financial information is used and stored.

? When accepting finance applications from consumers online, a secure site should be used.

? When collecting information from consumers, dealers must follow the FTC's `Red Flags Rule', which requires businesses to protect consumers by identifying and responding to warning signs of identity theft. Details are available at .

When describing vehicle condition during the sales presentation

? Be fully transparent about vehicle condition, acknowledging not only what is known about a car, but any aspects of a car's condition the dealer cannot speak to with certainty.

? Be as specific as possible when describing any inspection and reconditioning done to a vehicle (e.g., visual vs. mechanical inspection), to give consumers realistic expectations of a vehicle's condition. Consumers hearing "inspected" or "checked over" might assume that a car has undergone multi-point

mechanical inspection and is free of problems, when the salesperson may have been describing a simple visual examination.

? As in dealer advertising, remember that different consumers will hear statements about a car's condition differently (e.g., has "no problems"), and the condition of a car can inadvertently be oversold in this way.

If accepting a deposit to `hold' a vehicle

? BBB has received complaints from consumers claiming that a vehicle was "sold out from under" them after they had put down a deposit. To avoid potential misunderstandings with consumers, have a standard process in place so that all staff are aware if a vehicle has been put on hold.

? Make sure all terms and conditions of the agreement are laid out in writing, from the length of time the vehicle will be held to whether the deposit is refundable, and under what circumstances.

When promising additional items or repair work

? Any commitments made verbally during the sales presentation should be documented in a written "we owe" agreement. This agreement should clearly identify what repair work or additional items (e.g.,

spare keys, owner's manual) have been promised, and the timeframe for honoring these commitments.

? Make sure the consumer understands how to go about scheduling work promised under a "we owe" agreement, and that scheduling in a timely fashion is their responsibility.

When reviewing sales contracts and warranty terms with the buyer

? Make sure the consumer is given ample time to review and understand the documents they're signing, to avoid misunderstandings later

? While the consumer shares responsibility for understanding the terms of their purchase, dealers should review key figures and terms verbally, and encourage the consumer to ask questions.

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