Federal law requires dealers to provide a written warranty to customers whenever a warranty is offered on a vehicle. Most dealers believe that giving the consumer a signed copy of the FTC sticker fulfills this obligation. Unfortunately, the FTC sticker alone is not enough. To be fully compliant, a dealer should provide a separate document fully disclosing any applicable warranties that may come with the vehicle purchased.
The Warranty Disclosure Rule requires dealers to disclose the warranty coverage offered on the vehicle as well as the consumer’s rights in a separate, single document that is clearly worded. This is in addition to the disclosures made on the FTC sticker. The language for this requirement is clearly stated on the FTC sticker itself:
“Ask the dealer for a copy of the warranty document for a full explanation of warranty coverage, exclusions, and the dealer’s repair obligations.”
Your warranty disclosure document should contain the following:
- Name and address of buyer.
- Information on vehicle purchased (VIN, make, model).
- Duration of limited warranty, both miles and time.
- Limited warranty terms.
- Components covered.
- Excluded items.
- Procedures to obtain warranty services.
- Area for consumer to acknowledge receipt of document (signature and date).
You must be careful when drafting a warranty disclosure document. Not only must you contend with requirements mandated by federal law, but many states also have their own supplemental requirements that may exceed what the federal law demands. For advice on what your warranty disclosure document should say, contact your attorney or whoever assists your dealership with legal compliance. Also, you can find an example of a model warranty disclosure document in the excellent legal resource book for dealers, Auto Dealer Law.