Lemon of a used-car ruling
THE Federal Trade Commission has ruled that American used-car buyers need not be told what's wrong with autos on car lots; car sellers may continue to withhold information about known defects.
How disappointing! The more complicated automobiles become, the more difficult for car buyers to tell what's wrong with them. The commission originally proposed a useful assist: It was going to require used-car dealers to post any defects they knew about on the price sticker affixed to the car window. That would have been a proper sharing of known information. It didn't require the dealers to inspect the cars according to a prescribed checklist, but merely to write down what they already knew - presumably dealers make some assessment of the condition of cars when they accept them for resale.
But the used-car industry objected. The commission then signaled its intention to withdraw the requirement. This past week it formally did, with the three members appointed by President Reagan voting for the switch, while the holdover from a previous administration voted for the tougher standard.
We favor a different approach that simultaneously would offer more protection to both buyer and seller: We would require a dealer to inspect each car before resale, according to a checklist of major working parts and safety equipment, and to post the results of that inspection on the window sticker. That way a consumer would know as precisely as possible the condition of the automobile. Similarly, the auto dealer would be protected against any future charge that he was hiding information about the car's condition.
As approved by the commission this week, the rule does give modest help to consumers. It requires used-car sellers to provide more precise information about warranty terms, notes that consumers must pay for all repairs if the car is sold ''as is,'' and suggests that they have the auto inspected independently before final purchase. That is fine as far as it goes.
But the most important assistance is omitted: What's known to be wrong with the car. The Federal Trade Commission could have helped consumers in this instance, at virtually no expense to anyone. It is a missed opportunity, which does nothing to boost consumers' opinions of the commission, of government regulation in general, or of the sellers of used automobiles, to whose pressure the commission yielded.