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Consumer Sourcebook

Preface | User's Guide | Table of Contents | Print Sourcebook Adobe Acrobat Reader Symbol

Autos: Used

Every year, thousands of people buy "previously owned" cars. The majority of used car buyers are satisfied with their purchases. However, used car buyers can run into problems that do not exist in the new car market. Some problems may be similar to those of new car buyers, such as misleading advertising and oral promises. Used car buyers should take special care to "shop smart." This section covers some of the rights and protections you have as a used car consumer in New Hampshire.

Used car buyers can have as many problems with so-called "spot delivery" sales as new car buyers. For more information on "spot delivery sales," refer to Autos: New, Watch Out For … Spot Delivery Sales.

New Hampshire has neither a "cooling off period" to cancel a used car sale, nor a used car "lemon law." Although some states have such laws, New Hampshire's "lemon law" applies only to new cars (refer to the section on Autos: Lemon Law, and a "cooling off" period is nonexistent in either new or used car sales. New Hampshire does offer protection for the used car buyer by regulating the sale of "unsafe" used cars (i.e., cars that cannot pass state inspection), in addition to warranty protection under the Uniform Commercial Code (UCC). Further protection is extended by a Federal Trade Commission (FTC) rule requiring used car dealers to provide certain information to their customers about the cars they sell.

The Law

New Hampshire, unlike many other states, permits the sale of so-called "unsafe" vehicles which cannot pass state inspection when sold. New Hampshire's Unsafe Vehicle Act (RSA 358 F) gives consumers several important legal rights in the sale of such used vehicles. An "unsafe" vehicle is one whose brakes, frame, exhaust system, or lights will not pass the state's safety inspection.

Before a dealer can sell an unsafe used car, the dealer must:

  • Disclose that the car will not pass the state safety inspection; and
  • Offer the buyer the opportunity to have the car inspected for safety (the dealer may charge a "reasonable" amount for the inspection).

If the consumer still wants to buy the car, knowing it is considered "unsafe," the dealer may sell the car but must list the safety defects for the buyer along with a notice stating:

This motor vehicle will not pass a New Hampshire inspection and is unsafe for operation. The following defects must be corrected before an inspection sticker will be issued.

Example: Bondough's Best, a used car dealer, receives a used Porcine Troughmaster in trade. While getting it ready for resale, Clyde Bondough notices that the Troughmaster's frame and exhaust pipes are rusted through. Harvey Parsley comes to the lot the next day and says "Porcines are the best! I especially love the Troughmaster." Before Bondough's can sell Harvey the Troughmaster, it must tell him that the car probably will not pass a state safety inspection, and offer him a chance to get the car inspected. Harvey may still buy the Troughmaster if he gets a list of all the items that did not pass inspection and the warning stated in the text.

Any violation of RSA 358-F is considered to be an unfair and deceptive trade practice which triggers certain rights and remedies under the New Hampshire Consumer Protection Act.

RSA 266:8 also gives the used car buyer protective rights. When a dealer licensed by the New Hampshire Department of Safety finds that a car will not pass the state safety inspection, the dealer must:

  • Destroy the inspection sticker on the car
  • Fill out a form distributed by the Department of Safety
  • Have the buyer sign the form to acknowledge that the buyer is aware the car will not pass inspection
  • Provide the buyer and the Department with a copy of the form, and keep a copy of the form in the dealer's files

Uniform Commercial Code

New Hampshire used car buyers are also protected when the dealer wants to sell a used car without any warranty. Such sales are traditionally made using the words "As Is" on the bill of sale, receipt, or contract. New Hampshire's version of the Uniform Commercial Code (for more information about the UCC, refer to Warranties states that when a seller is selling goods (including used cars) without any warranty, the contract should employ the following language:

  • That the goods are being sold "as is" or with "all faults
  • That the buyer assumes all risks as to good's quality and performance
  • That if the goods prove defective after purchase, the buyer, not the seller or manufacturer, must absorb any service or repair costs

Example: Candy Voltaire goes to Prince's Used AutoGems, a "licensed" dealer, and buys a 1999 Porcine Windbucket. The Windbucket will not pass inspection. The purchase order says "As Is As Shown." The purchase order does not have the language or signature as required by the UCC, the previous inspection sticker is still on the windshield, and there is no signed form as required by RSA 266:8. Sam Speed, the salesperson who sold Candy the car, agrees that he never told her about her right to a safety inspection, but claims that Candy waived her rights when she took delivery of the car "As Is As Shown." Speed is probably wrong, and it is very likely that a court would find the sale violated the UCC, RSA 358-F, and RSA 266:8.

This rule applies to used car transactions and may be a source of problems for buyers where the "As Is" paperwork does not conform to the UCC safeguards.

FTC Buyers Guide

The FTC has a very helpful set of rules called the "Buyer's Guide" rules, which apply to used car sales and advertising. The nationally required rules apply to all used car dealers who sell more than four used cars per year.

Example: Candy Voltaire goes to Prince's Used AutoGems and buys a 1998 Porcine Windbucket with 130,000 miles showing on the odometer. The Windbucket's clutch melts down and must be replaced two hours after Candy drives the Windbucket off the lot. The Buyer's Guide says "As Is." Sam Speed, the salesperson who sold Candy the car, agrees with Candy's claim that he told her that the car should go "another 30,000 miles with no problem, easy," contradicting the Buyer's Guide and violating the FTC rule. Speed, and Prince's, by violating the Buyer's Guide rule, have probably committed an unfair or deceptive trade practice that should give rise to the private remedies provided under the NH Consumer Protection Act.

The FTC rules require used car dealers to give potential buyers certain information about the cars. The used car dealer is required to post a window sticker called a "Buyer's Guide" on each used car stating whether the car is being sold with a warranty or "as is." If the sticker states that the car is being sold "as is," the dealer is prohibited from making any contradictory statements in advertisements, sales pitches, or sales documents.

Any statements contradicting what appears on the FTC Buyer's Guide posted on the vehicle are prohibited. The Buyer's Guide information, however, should put the careful consumer on notice to disregard any warranty statements the dealer or salesperson makes.

Example: Candy Voltaire goes to Prince's Use AutoGems and buys a 1999 Porcine Windbucket. The Windbucket will not pass inspection. The purchase order says "As Is As Shown." The purchase order has the language and signature as required by the UCC, and the previous inspection sticker was removed from the windshield, and there is a signed form as required by RSA 266:8. Sam Speed, the salesperson who sold Candy the car, agrees with her claim that he never told her about her rights to a safety inspection, and said the various disclaimer forms were "just a little formality," but claims she waived her rights when she took delivery of the car "As Is As Shown." A court would likely find that the sale violated the UCC, RSA 358-F, and RSA 266:8 because Candy was induced to waive her rights before she had a clear idea of what they were.

A dealer's violation of the FTC Buyer's Guide rules is not a direct violation of New Hampshire law. Nevertheless, if a dealer violates the Buyer's Guide rule, it provides strong and persuasive evidence that the practice also constitutes an unfair and deceptive practice as defined by New Hampshire's Consumer Protection Act.

"New" Used Cars

A growing number of car dealers are selling "program" cars. Program cars have been used in fleet leasing programs (such as to car rental companies) and usually have at least a part of the original manufacturer's warranty remaining at the time of sale. These cars can be good values since they may have low mileage, may still have warranty coverage, and may have less short term depreciation. Also, program cars which turn out to have problems, may, under certain circumstances, qualify for arbitration under New Hampshire's New Car Lemon Law (refer to Autos: Lemon Law for more information). They can also be bad values due to possible abuse by previous owners and unknown operating conditions.

New Hampshire's Consumer Protection Act expressly prohibits a seller from "[r]epresenting that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand." Any advertisements, sales pitches, or other documents that represent program cars as new cars are of interest to the New Hampshire Consumer Protection & Antitrust Bureau. Although the Bureau cannot take action in every case, the Bureau is interested in monitoring the trends in this area. If you can demonstrate that a dealer misrepresented a used car as new, then you have a strong case to rescind the sales contract because the dealer used deceptive methods to make the sale.

Watch out for … Odometer Tampering

Both federal and state laws make tampering with (disconnecting, rolling back) motor vehicle odometers illegal. Used car dealers and persons selling their own cars are prohibited from tampering with the odometer to make it appear that the vehicle has fewer miles on it (with fewer miles, the vehicle can usually be sold at a higher price). Both federal and New Hampshire state laws impose severe penalties for tampering with an odometer with the intent to defraud

Points To Remember

  • Check newspaper ads and used car guides at your local library to get an idea of what a fair price is for the car you are considering.
  • Shop during daylight hours so that you can thoroughly inspect the car and take a test drive. Check all the parts of the car to make sure they work including the signals, heater, air conditioner, and lights.
  • Make notes about the characteristics of all the cars you look at (so remember to take a notepad and pen or pencil with you). What extras does it have? What repairs need to be made? What is the price? You will be able to compare the notes later.
  • Ask about the previous owner and the car's mechanical history. Contact the former owner if possible to find out if the car was in an accident or had any other major problems. Ask if the car's repair and maintenance records are available to you.
  • Have a mechanic inspect the car you want to purchase. Get a written list of all the things that need to be repaired. (The fee you will have to pay the mechanic for this inspection outweighs the trouble of purchasing a "lemon.") Ask the salesperson to either make any necessary repairs or deduct the repair cost from the selling price.
  • Read all documents carefully. Don't sign anything you don't understand. Negotiate changes you want and get them written into the contract.
  • Get all promises in writing (signed by the person making the promise) and date it.
  • Remember that the laws described in this section apply only to used car dealers, not to individuals selling their own vehicles.
  • Only make a deposit on a vehicle you are absolutely certain of purchasing. (Refer to Autos: New for more information about deposits.)
  • The sale of the vehicle and the financing agreement are two separate agreements.
  • If you take possession of a used vehicle on a spot delivery plan, and you are later told that you have to return the vehicle because financing fell through, call the finance company to verify that credit was denied. For more about spot delivery sales, refer to Autos: New, Watch Out For … Spot Delivery Sales.

Where To Go If You Have A Problem

If you have a problem with a new car purchase, contact the NH Consumer Protection and Antitrust Bureau:

NH Consumer Protection & Antitrust Bureau
33 Capitol Street
Concord, NH 03301-6397

If you believe the Buyer's Guide rule has been violated, contact the FTC.

Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
877-FTC-HELP (877-382-4357) Toll-free
TDD: 202-326-2502

The Better Business Bureau may also assist in mediating or arbitrating a dispute:

Better Business Bureau
25 Hall Street, Suite 102
Concord, NH 03301
603-224-1991
E-mail: info@bbbnh.org

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New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301
Telephone: 603-271-3658