Protect buyers of used cars
Action is under way in the Federal Trade Commission that is likely to be good for the business profits of used-car dealers, at least in the short run. But for millions of used-car buyers, it is bad business.
At issue is the proposal of a majority of the FTC to reconsider a rule with a checkered past - the one requiring that used-car dealers tell potential buyers any major defects they have discovered in their cars. The FTC adopted this rule two years ago, but it has never taken effect due first to a congressional veto (later voided in court) and subsequently to court suits.
Now it looks as though it never will take effect. Almost surely the FTC will substitute for this rule one that simply spells out terms of the warranty, leaving a consumer to find out for himself what is wrong with the auto he is thinking of buying - and permitting a dealer to hide what he knows.
That is unfortunate. The consumer is entitled - for reasons both of safety and simple fairness - to know about any major defect the dealer is aware of. The average consumer is unable, on the basis of a visual inspection or even a short test drive, to know as much about a car as someone who deals in used cars every day.
Whatever ultimately is decided, many Americans will be affected. For years consumer organizations have said they receive more complaints about car purchases, new and used, than about any other subject.
Nearly three times as many used cars (about 17 million) are sold every year as new ones (some six million). Ironically, in many states there is considerable consumer pressure for state ''lemon'' laws, to require in essence that new cars which come with defects be repaired within a reasonable amount of time or have the car's cost refunded if the buyer so desires. A number of states have adopted such laws.
There is far less organized consumer pressure for state laws governing used-car defects; consumer activists say that only Wisconsin has a comprehensive and effective law on the issue. In most states jousting on the issue between consumers and the lobbyists for used-car dealers would be an unequal contest, with the almost certain result that few additional states - if any - would enact laws. On a national level the used-car dealers were strong enough to pressure Congress last year to override the FTC ruling, the congressional action which the courts earlier this year threw out.
For consumers the problem which led to the ruling in the first place remains - namely, that promises about the splendid condition of used cars too often are made orally with nothing on paper, thus giving consumers no redress if major repairs soon are required. The original FTC ruling is an effort to right this inequity, requiring that dealers disclose any major defect they happen to know about, but not requiring that they actually inspect each car to ferret out the condition of all of its major parts. This seems fair enough; the FTC ought not to change it. And the Congress ought not to succumb to auto dealers' pressures and try again to overturn it.