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Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

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AGENCY:

Federal Trade Commission.

ACTION:

Notice.

SUMMARY:

The Federal Trade Commission (“FTC” or “Commission”) is seeking public comment on its proposal to extend for an additional three years the current Paperwork Reduction Act (“PRA”) clearance for information collection requirements in its “Used Motor Vehicle Trade Regulation Rule” (“Used Car Rule” or “Rule”), which applies to used vehicle dealers. That clearance expires on December 31, 2019.

DATES:

Comments must be filed by October 7, 2019.

ADDRESSES:

Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write “Used Car Rule, PRA Comment, FTC File No. [P137606]” on your comment, and file your comment online at https://www.regulations.gov by following the instructions on the web-based form. If you prefer to file your comment on paper, mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 20024.

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FOR FURTHER INFORMATION CONTACT:

Elizabeth Scott, (312) 960-5609, Attorney, Midwest Region, Federal Trade Commission, 230 South Dearborn Street, Suite 3030, Chicago, IL 60604.

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SUPPLEMENTARY INFORMATION:

The Used Car Rule promotes informed purchasing decisions by requiring that used car dealers display a form called a “Buyers Guide” on each used car offered for sale that, among other things, discloses information about warranty coverage, Start Printed Page 38980and other information to assist purchasers.

Burden Statement

Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must obtain OMB approval for each collection of information they conduct or sponsor. “Collection of information” includes agency requests or requirements to submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before requesting that OMB extend the existing paperwork clearance for the Used Car Rule, 16 CFR part 455 (OMB Control Number 3084-00108).

The Rule has no recordkeeping or reporting requirements. As detailed further under the Request for Comment, the FTC seeks clearance for the Rule's disclosure requirements and the estimated PRA burden for them.

Estimated total annual hours burden: 2,368,993.

As explained in more detail below, this total is based on estimates of the number of used car dealers (53,779 [1] ), the number of used cars sold by dealers annually (approximately 29,214,371 [2] ), and the time needed to fulfill the information collection tasks required by the Rule.[3]

The Rule requires that used car dealers display a one-page, double-sided Buyers Guide on each used car that they offer for sale. The component tasks associated with the Rule's required display of Buyers Guides include: (1) Ordering and stocking Buyers Guides; (2) entering data on Buyers Guides; (3) displaying the Buyers Guides on vehicles; (4) revising Buyers Guides as necessary; and (5) complying with the Rule's requirements for sales conducted in Spanish.

1. Ordering and Stocking Buyers Guides: Dealers should need no more than an average of two hours per year to obtain Buyers Guides, which are readily available from many commercial printers or can be produced by an office word-processing or desk-top publishing system.[4] Based on an estimated population of 53,779 dealers, the annual hours burden for producing or obtaining and stocking Buyers Guides is 107,558 hours.

2. Entering Data on Buyers Guides: The amount of time required to enter applicable data on Buyers Guides may vary substantially, depending on whether a dealer has automated the process. For used cars sold “as is,” copying vehicle-specific data from dealer inventories to Buyers Guides and checking the “No Warranty” box may take two to three minutes per vehicle if done by hand, and only seconds for those dealers who have automated the process or use pre-printed forms. Staff estimates that dealers will require an average of two minutes per Buyers Guide to complete this task. Similarly, for used cars sold under warranty, the time required to check the “Warranty” box and to add warranty information, such as the additional information required in the Percentage of Labor/Parts and the Systems Covered/Duration sections of the Buyers Guide, will depend on whether the dealer uses a manual or automated process or Buyers Guides that are pre-printed with the dealer's standard warranty terms. Staff estimates that these tasks will take an average of one additional minute, i.e., cumulatively, an average total time of three minutes for each used car sold under warranty.

Staff estimates that dealers sell approximately fifty percent of used cars “as is” and the other half under warranty. Therefore, staff estimates that the overall time required to enter data on Buyers Guides consists of 486,906 hours for used cars sold without a warranty (29,214,371 vehicles × 50% × 2 minutes per vehicle) and 730,359 hours for used cars sold under warranty (29,214,371 vehicles × 50% × 3 minutes per vehicle) for a cumulative estimated total of 1,217,265 hours.

3. Displaying Buyers Guides on Vehicles: Although the time required to display the Buyers Guides on each used car may vary, FTC staff estimates that dealers will spend an average of 1.75 minutes per vehicle to match the correct Buyers Guide to the vehicle and to display it on the vehicle. The estimated burden associated with this task is approximately 852,086 hours for the estimated 29,214,371 vehicles sold annually (29,214,371 vehicles × 1.75 minutes per vehicle).

4. Revising Buyers Guides as Necessary: If negotiations between the buyer and seller over warranty coverage produce a sale on terms other than those originally entered on the Buyers Guide, the dealer must revise the Buyers Guide to reflect the actual terms of sale. According to the original rulemaking record, bargaining over warranty coverage rarely occurs. Staff notes that consumers often do not need to negotiate over warranty coverage because they can find vehicles that are offered with the desired warranty coverage online or in other ways before ever contacting a dealer. Accordingly, staff assumes that dealers will revise the Buyers Guide in no more than two percent of sales, with an average time of two minutes per revision. Therefore, staff estimates that dealers annually will spend approximately 19,476 hours revising Buyers Guides (29,214,371 vehicles × 2% × 2 minutes per vehicle).

5. Spanish Language Sales: The Rule requires dealers to make contract disclosures in Spanish if the dealer conducts a sale in Spanish.[5] The Rule permits displaying both an English and a Spanish language Buyers Guide to comply with this requirement.[6] Many dealers with large numbers of Spanish-speaking customers likely will post both English and Spanish Buyers Guides to avoid potential compliance violations.

Calculations from United States Census Bureau surveys indicate that approximately 5.4 percent of the United States population speaks Spanish at home, without also speaking fluent English.[7] Staff therefore projects that dealers will conduct approximately 5.4 percent of used car sales in Spanish. Dealers will incur the additional burden of completing and displaying a second Buyers Guide in 5.4 percent of sales assuming that dealers choose to comply with the Rule by posting both English and Spanish Buyers Guides. The annual hours burden associated with completing and displaying Buyers Guides is 2,069,351 hours (1,217,265 hours for entering data on Buyers Guides + 852,086 hours for displaying Buyers Guides). Therefore, staff estimates that the additional burden caused by the Rule's requirement that Start Printed Page 38981dealers display Spanish language Buyers Guides when conducting sales in Spanish is 111,745 hours (2,069,351 hours × 5.4% of sales). The other components of the annual hours burden, i.e., purchasing Buyers Guides and revising them for changes in warranty coverage, remain unchanged.

6. Optional Disclosures of Non-Dealer Warranties: The Rule does not require dealers to disclose information about non-dealer warranties, but provides dealers with the options to disclose such warranties on Buyers Guides. FTC staff has estimated that dealers will make the optional disclosures on 25% of used cars offered for sale. Staff believes that checking the optional boxes to disclose a non-dealer warranty should require dealers no more than 30 seconds per vehicle. Accordingly, based on 29,214,371 used cars sold, staff estimates that making the optional disclosures entails a burden of 60,863 hours (25% × 29,214,371 vehicles sold × 1/120 hour per vehicle).

Estimated annual cost burden: $40,083,362 in labor costs and $8,764,311 in non-labor costs.

1. Labor costs: Labor costs are derived by applying appropriate hourly cost figures to the burden hours described above. Staff has determined that all of the tasks associated with ordering forms, entering data on Buyers Guides, posting Buyers Guides on vehicles, and revising them as needed, including the corresponding tasks associated with Spanish Buyers Guides and providing optional disclosures about non-dealer warranties, are typically done by clerical or low-level administrative personnel. Using a clerical cost rate of $16.92 per hour [8] and an estimated burden of 2,368,993 hours for disclosure requirements, the total labor cost burden is $40,083,362 ($16.92 per hour × 2,368,993 hours).

2. Capital or other non-labor costs: Although the cost of Buyers Guides may vary, staff estimates that the average cost of each Buyers Guide is thirty cents based on industry input. Therefore, the estimated cost of Buyers Guides for the 29,214,371 used cars sold by dealers in 2017 is approximately $8,764,311. In making this estimate, staff assumes that all dealers will purchase pre-printed forms instead of producing them internally, although dealers may produce them at lower expense using their own office automation technology. Capital and start-up costs associated with the Rule are minimal.

Request for Comment: Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites comments on: (1) Whether the disclosure, recordkeeping, and reporting requirements are necessary, including whether the resulting information will be practically useful; (2) the accuracy of our burden estimates, including whether the methodology and assumptions used are valid; (3) how to improve the quality, utility, and clarity of the disclosure requirements; and (4) how to minimize the burden of providing the required information to consumers.

You can file a comment online or on paper. For the FTC to consider your comment, we must receive it on or before October 7, 2019. Write “Used Car Rule, PRA Comment, FTC File No. [P137606]” on your comment. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online, or to send them to the Commission by courier or overnight service. To make sure that the Commission considers your online comment, you must file it through the https://www.regulations.gov website by following the instructions on the web-based form provided. Your comment—including your name and your state—will be placed on the public record of this proceeding, including the https://www.regulations.gov website. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the regulations.gov site.

If you file your comment on paper, write “Used Car Rule, PRA Comment, FTC File No. [P137606]” on your comment and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.

Because your comment will be placed on the publicly accessible website at www.regulations.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “trade secret or any commercial or financial information which . . . is privileged or confidential”—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted publicly at www.regulations.gov, we cannot redact or remove your comment unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before October 7, 2019. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/​site-information/​privacy-policy.

Start Signature

Heather Hippsley,

Deputy General Counsel.

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Footnotes

1.  37,026 independent dealers. NIADA Used Car Industry Report (2014), at 16. 16,753 franchised new car dealers in 2018. NADA Data 2018: Annual Report, at 5.

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2.  The estimated number of used car sold annually is based on records for calendar year 2017 from the NIADA. NIADA Used Car Industry Report (2018), at 22.

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3.  Some dealers opt to contract with outside contractors to perform the various tasks associated with complying with the Rule. Staff assumes that outside contractors would require about the same amount of time and incur similar costs as dealers to perform these tasks. Accordingly, the hour and cost burden totals shown, while referring to “dealers,” incorporate the time and cost borne by outside companies in performing the tasks associated with the Rule.

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4.  Buyers Guides are also available online from the FTC's website, www.ftc.gov, at http://business.ftc.gov/​selected-industries/​automobiles.

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7.  U.S. Census Bureau, TableB16001. Language Spoken at Home. 2017 American Community Survey 1-Year Estimates, available at: https://factfinder.census.gov/​faces/​tableservices/​jsf/​pages/​productview.xhtml?​pid=​ACS_​11_​1YR_​B16001&​prodType=​table (last visited June 7, 2019) (5.4% of the United States population 5 years or older who speaks Spanish or Spanish Creole in the home speaks English less than “very well.”).

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8.  The hourly rate is based on the Bureau of Labor Statistics estimate of the mean hourly wage for office clerks, general. Occupational Employment and Wages, May 2018, 43-9061 Office Clerks, General, available at: https://www.bls.gov/​oes/​current/​oes439061.htm#nat.

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[FR Doc. 2019-16945 Filed 8-7-19; 8:45 am]

BILLING CODE 6750-01-P