A car dealership must display a great deal of information for employees and customers under federal law. Some items are required of all businesses. Others are unique to car dealerships. They all have one thing in common: failure to display them will be easily noticed by someone who is looking – whether it is a federal government investigator or a lawyer for a customer or employee who is working on a claim or defense. So pay attention to the things that your business must display.
EMPLOYMENT POSTERS. From time to time, it is a good idea to make sure that posters required by federal law are properly displayed in one or more common locations where employees are likely to see them. You may have separate posters, or you may purchase “all-in-one” posters from a supplier. Here is what must be displayed under federal law.
- The minimum wage rights notice, “Employee Rights Under the Fair Labor Standards Act,” required by the U.S. Department of Labor, Wage and Hour Division, last revised July 2009 (but the July 2007 revision is permitted);
- “Equal Employment Opportunity is the Law” poster required by the U.S. Equal Employment Opportunity Commission, last revised August 2008;
- “Job Safety and Health: It’s the Law” poster required by the Occupational Safety and Health Administration;
- The notice to workers with disabilities required by the U.S. Department of Labor, Employment Standards Administration, last revised July 2007;
- The Employee Polygraph Protection notification required by the U.S. Department of Labor, Wage and Hour Division;
- “Employee Rights and Responsibilities under the Family and Medical Leave Act” poster required by the U.S. Department of Labor, updated to show the changes for families of covered service personnel, last revised January 16, 2009; and
- “Your Rights Under USERRA,” the Uniformed Services Employment and Re-Employment Rights Act poster. This was last revised in October 2008, but the July 2008 version is also acceptable.
Virginia law also requires easily-viewed posters about workers’ rights.
RIGHT TO KNOW. Federal law requires employers to inform employees about the chemical hazards to which they may be exposed to in the workplace. A dealer must keep chemical product information sheets in an accessible manner and must train personnel to properly handle the hazardous materials that they work with.
FUEL ECONOMY GUIDES. Federal law requires that new car dealers display EPA/DOE Fuel Economy Guide booklets at each location where new vehicles are offered for sale and to make them available to the public at no charge. The booklets and related information are available at www.fueleconomy.gov.
NHTSA INSURANCE COST INFORMATION BOOKLETS. New car dealers must display NHTSA’s most recent “Relative Collision Insurance Cost Information Booklet.” This booklet compares differences in insurance costs for vehicles within a similar class on the basis of damage susceptibility, and it is updated each year. One booklet is generally mailed to each new car dealer annually. Or the booklet is available at
http://www.nhtsa.dot.gov/. Reproduce and maintain a sufficient number of copies of the booklet so that it is available to prospective purchasers of new vehicles
MONRONEY LABELS. The Automobile Information Disclosure Act, or the Monroney Act as it is commonly known, was passed in June 1958, and requires a sticker to be placed on a new vehicle prior to sale indicating the sticker price and other relevant information. The Monroney label cannot be removed or altered prior to the first retail sale. Each new vehicle delivered to a dealer has the label affixed (or it may be provided later in the event of vehicles delivered before official introduction), but a dealer may have in inventory vehicles missing Monroney labels removed by dealership employees for the purpose of demonstrating a vehicle (which should be prohibited unless absolutely necessary for safety) or by customers when vehicles are spot delivered but the sale falls through. In those cases, the dealer should request a substitute Monroney label from the manufacturer to be placed in the window.
DEALER ADD-ONS TO NEW CARS. Dealer add-ons are a perennial favorite subject for plaintiffs’ lawyers who are looking for an excuse to force a dealer to cancel a sale or for reasons to sue a dealer. Dealer add-ons that are properly disclosed and that provide value to the customer are generally not the issue. However, where a plaintiff’s lawyer can allege that the add-ons have not been properly disclosed or that they provide little or no value compared to price, there is a possibility of a lawsuit.
Add-ons to new cars should be clearly disclosed on a supplemental sticker on the window of the vehicle. While there is no federal law governing where this should be affixed and when it should be removed, it should be clearly visible to prospective purchasers who are shopping for the vehicle.
USED CAR BUYERS GUIDES. Will an FTC investigator who may walk onto your lot find Buyers Guides (commonly known as the FTC sticker) on every used car available for retail sale? The FTC Used Car Rule was initially announced in 1976 and contained provisions requiring a mandatory inspection and a mandatory warranty. After a tortured history, on July 10, 1984, the FTC adopted the present rule that requires, primarily, disclosure of the warranty and related information applicable to a used vehicle.
The terms and format of the Buyers Guide are strictly specified. The Used Car Rule contains form disclosure window labels, and the version used by a dealer must meet the defined requirements.
The required label has four principal elements:
- A disclosure of whether the vehicle is offered for sale as-is or with a warranty. If a warranty is offered, the duration and the coverage of the warranty must be listed. In states where “as is” sales are prohibited, an alternate label form disclosing that a vehicle is being sold with implied warranties only must be used to accommodate state law.
- The availability of a service contract must be disclosed.
- The label invites a consumer to ask the dealer whether the vehicle may be inspected by a mechanic of the consumer’s choice, either on or off the lot.
- The label warns that spoken promises are difficult to enforce and suggests that the consumer obtain all promises in writing.
The window label must be affixed to a used motor vehicle available for sale to a consumer at retail by a dealer. A used motor vehicle is any vehicle that has been titled, is a demonstrator, or has been driven more than 100 miles in excess of mileage accumulated in delivery of the vehicle to the dealership.
- The guide must be displayed prominently on a vehicle so that both sides of the label can be read, with the side titled “Buyers Guide” facing the outside.
- The label must be affixed before the dealer offers a used vehicle for sale to a consumer.
- In filling out the label, the dealer must insert the make, model, year and vehicle identification number, plus a description of any available warranty. It must be filled out to identify the dealer and the person at the dealership (which may be done by title and phone number) to whom a complaint may be directed.
An FTC investigator who visits a dealership will look at all used cars on the dealer’s lot and all demonstrators to see if guides are appropriately affixed. If you regularly store used cars that are not for sale (such as vehicles on hold that will be wholesaled) soap the windshield or otherwise prominently identify it as “not for retail sale”.
WARRANTIES. The Magnuson-Moss Warranty Act requires the seller of a consumer product with a written warranty ("a promise made in connection with the sale of a consumer product") to make a text of the warranty readily available for examination by a prospective buyer.
The requirement is satisfied if the dealer either displays the warranty in close proximity to the warranted car or places signs, reasonably calculated to elicit the attention of prospective buyers, in prominent locations in the dealership advising prospective buyers of the availability of warranties upon request. If the dealer opts for the latter option, the dealer must furnish the warranty upon request.
Remember: the description of a warranty on the FTC window sticker is not the warranty itself. A used car with a warranty must be delivered with the actual warranty document.