[Federal Register Volume 72, Number 243 (Wednesday, December 19, 2007)]
[Notices]
[Pages 71911-71912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24671]



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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA''). The 
Federal Trade Commission (``FTC'' or ``Commission'') is seeking public 
comments on its proposal to extend through December 31, 2010, the 
current OMB clearance for information collection requirements contained 
in its Used Motor Vehicle Trade Regulation Rule (``Used Car Rule'' or 
``Rule''). That clearance expires on December 31, 2007.

DATES: Comments must be filed by January 18, 2008.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Used Car Rule: FTC Matter No. P067609,'' to 
facilitate the organization of comments. A comment filed in paper form 
should include this reference both in the text and on the envelope and 
should be mailed or delivered, with two complete copies, to the 
following address: Federal Trade Commission, Room H-135 (Annex J), 600 
Pennsylvania Ave., N.W., Washington, D.C. 20580. Because paper mail in 
the Washington area and at the Commission is subject to delay, please 
consider submitting your comments in electronic form, as prescribed 
below. However, if the comment contains any material for which 
confidential treatment is requested, it must be filed in paper form, 
and the first page of the document must be clearly labeled 
``Confidential.''\1\
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by following 
the instructions on the web-based form at https://secure.commentworks.com/ftc-UsedCarRule. To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the https://secure.commentworks.com/ftc-UsedCarRule weblink. If this 
notice appears at www.regulations.gov, you may also file an electronic 
comment through that website. The Commission will consider all comments 
that regulations.gov forwards to it.
    Comments also should be submitted to: Office of Management and 
Budget, ATTN: Desk Officer for the Federal Trade Commission. Comments 
should be submitted by facsimile to (202) 395-6974 because U.S. Postal 
Mail is subject to lengthy delays due to heightened security 
precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments will be 
considered by the Commission and will be available to the public on the 
FTC website, to the extent practicable, at www.ftc.gov. As a matter of 
discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to John C. Hallerud, Attorney, Midwest Region, 
Federal Trade Commission, 55 West Monroe, Suite 1825, Chicago, Illinois 
60603, (312) 960-5634.

SUPPLEMENTARY INFORMATION: On August 20, 2007, the FTC sought comment 
on the information collection requirements associated with the Used Car 
Rule. 16 CFR Part 455. See 72 FR 46487. No comments were received. 
Pursuant to the OMB regulations, 5 CFR Part 1320, that implement the 
PRA, 44 U.S.C. 3501-3521, the FTC is providing this second opportunity 
to comment while seeking OMB approval to extend the existing paperwork 
clearance for the Rule. All comments should be filed as prescribed in 
the ADDRESSES section above, and must be received on or before January 
18, 2008.
    The Used Car Rule facilitates informed purchasing decisions by 
requiring used car dealers to disclose information about warranty 
coverage, if any, and the mechanical condition of used cars that they 
offer for sale. The Rule requires 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.

Burden statement:

    Estimated total annual hours burden: 2,250,000 hours
    The Rule has no recordkeeping requirements. The estimated burden 
relating solely to disclosure requirements is 2,250,000 hours. As 
explained in more detail below, this estimate is based on the number of 
used car dealers (approximately 63,000 \2\), the number of used cars 
sold by dealers annually (approximately 28,029,000\3\ ), and the time 
needed to fulfill the information collection tasks required by the 
rule.\4\
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    \2\ CNW Marketing Research, Inc. CNW lists franchised outlets 
with used car operations as 19,017 and independent used car outlets 
as 43,521 in June 2007, for a total of 62,538 outlets. Staff rounded 
that figure to 63,000.
    \3\ Id.
    \4\ 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 cost 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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    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,\5\ which 
are readily available from many commercial printers or can be produced 
by an office word-processing or desk-top publishing system.\6\ Based on 
a population of 63,000 dealers, the annual hours burden for producing 
or obtaining and stocking Buyers Guides is 126,000 hours.
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    \5\ In the FTC's 2004 PRA notice staff estimated the time needed 
to purchase Buyers Guides as one hour per year. 69 FR 63535, 63536 
(Nov. 2, 2004) (addressing comments). Based on industry input, staff 
believes that more time may be spent purchasing Buyers Guides than 
previously estimated because dealers periodically may change the 
warranty coverage that they offer and the corresponding preprinted 
Buyers Guides that they purchase.
    \6\ Buyers Guides are also available online from the FTC's Web 
site, www.ftc.gov, as links to A Dealer's Guide to the Used Car Rule 
at http://www.ftc.gov/bcp/conline/pubs/buspubs/usedcarc.shtm.
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    2. Entering Data on Buyers Guides: The amount of time required to 
enter applicable data on Buyers Guides may vary substantially, 
depending on

[[Page 71912]]

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 this task will require an average of two minutes per 
Buyers Guide.\7\ 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.
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    \7\ The 2004 PRA notice estimated the average time spent for 
this task as one-and-one half minutes. 69 FR at 63536. Based upon 
comments received at that time and additional industry input in 
preparing this notice, staff has revised its estimate upward to 2 
minutes.
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    Staff estimates that approximately fifty percent of used cars sold 
by dealers are sold ``as is,'' with the other one half sold under 
warranty.\8\ Therefore, staff estimates that the overall time required 
to enter data on Buyers Guides consists of 467,000 hours for used cars 
sold without a warranty (28,029,000 vehicles x 50% x 2 minutes per 
vehicle) and 701,000 hours for used cars sold under warranty 
(28,029,000 vehicles x 50% x 3 minutes per vehicle) for a cumulative 
estimated total of 1,168,000 hours.
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    \8\ The 2004 PRA notice estimated that sixty percent of sales 
were ``as is.'' 69 FR at 63536. Industry input suggests that more 
used cars are now sold with warranties because of an increase in the 
availability of manufacturers' certified used car programs and a 
longer duration of manufacturers' original new car warranties. See 
also Manheim Market Report, at 35 (citing Autodata Corporation 
(Table noting that 1.6 million certified pre-owned used cars were 
sold in 2006, which constitutes a two percent increase in certified 
used car sales from 2004 and approximately six percent of the used 
cars sold by dealers in 2006)). Staff therefore has decreased its 
estimate of the number of ``as is'' sales from the prior PRA notice.
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    3. Displaying Buyers Guides on Vehicles: Although the time required 
to display the Buyers Guides on each used car may vary substantially, 
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.\9\ The estimated burden associated with this 
task is approximately 818,000 hours for the 28,029,000 vehicles sold in 
2006 (28,029,000 vehicles x 1.75 minutes per vehicle).
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    \9\ The 2004 PRA notice also stated this estimate. See 69 FR at 
63536. Absent specific industry estimates to the contrary, staff 
continues to believe this estimate is reasonable.
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    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 the 
Buyers Guide will be revised 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 19,000 hours revising 
Buyers Guides (28,029,000 vehicles x 2% x 2 minutes per vehicle).
    5. Spanish Language Sales: The Rule requires that contract 
disclosures be made in Spanish if a sale is conducted in Spanish.\10\ 
The Rule permits displaying both an English and a Spanish language 
Buyers Guide to comply with this requirement.\11\ Many dealers with 
large numbers of Spanish-speaking customers likely will post both 
English and Spanish Buyers Guides to avoid potential compliance 
violations.
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    \10\ 16 CFR 455.5.
    \11\ Id.
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    Calculations from United States Census Bureau surveys indicate that 
approximately six percent of the United States population speaks 
Spanish at home, without also speaking fluent English.\12\ Staff 
therefore projects that approximately six percent of used car sales 
will be conducted in Spanish. Dealers will incur the additional burden 
of completing and displaying a second Buyers Guide in six 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 posting Buyers Guides is 1,986,000 hours 
(1,168,000 hours for entering data on Buyers Guides + 818,000 hours for 
displaying Buyers Guides). Therefore, staff estimates that the 
additional burden caused by the Rule's requirement that dealers display 
Spanish language Buyers Guides when conducting sales in Spanish is 
119,000 hours (6% x 1,986,000 hours). The other components of the 
annual hours burden, i.e., purchasing Buyers Guides and revising them 
for changes in warranty coverage, remain unchanged.
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    \12\ U.S. Census Bureau, Table S1601. Language Spoken at Home. 
2005 American Community Survey, available at: http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2005_EST_G00_S1601&-ds_name=ACS_2005_EST_G00_&-_lang=en&-redoLog=false&-CONTEXT=st. The table indicates that 19.4% 
of the U.S. population do not speak English at home, 62% of this 
group speaks Spanish at home, and 47.8% of those home Spanish 
speakers speak English less than ``very well.''
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    Estimated annual cost burden: $32,876,000, consisting of 
$27,270,000 in labor costs and $5,606,000 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, are typically done by clerical or low-level 
administrative personnel. Using a clerical cost rate of $12.12 per hour 
\13\ and an estimated burden of 2,250,000 hours for disclosure 
requirements, the total labor cost burden would be approximately 
$27,270,000.
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    \13\ The hourly rate is based on Bureau of Labor Statistics 
estimate of the mean hourly wage for office clerks, general, No. 43-
9061. National Occupational Employment and Wage Estimates, May 2006 
available at: http://www.bls.gov/oes/current/oes439061.htm.
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    2. Capital or other non-labor costs: Although the cost of Buyers 
Guides can vary considerably, based on industry input staff estimates 
that the average cost of each Buyers Guide is 20 cents. The estimated 
cost of Buyers Guides for the 28,029,000 used cars sold by dealers in 
2006 is approximately $5,606,000. In making this estimate, staff 
conservatively assumes that all dealers will purchase preprinted forms 
instead of producing them internally, although dealers may produce them 
at minimal expense using current office automation technology. Capital 
and start-up costs associated with the Rule are minimal.

William Blumenthal
General Counsel
[FR Doc. E7-24671 Filed 12-18-07: 8:45 am]
[BILLING CODE 6750-01-S]