[Federal Register Volume 84, Number 153 (Thursday, August 8, 2019)]
[Notices]
[Pages 38979-38981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16945]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension
AGENCY: Federal Trade Commission.
ACTION: Notice.
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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.
FOR FURTHER INFORMATION CONTACT: Elizabeth Scott, (312) 960-5609,
Attorney, Midwest Region, Federal Trade Commission, 230 South Dearborn
Street, Suite 3030, Chicago, IL 60604.
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,
[[Page 38980]]
and 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\
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\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.
\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.
\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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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.
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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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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 x 50% x 2 minutes per vehicle) and 730,359 hours
for used cars sold under warranty (29,214,371 vehicles x 50% x 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 x 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 x 2% x 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.
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\5\ 16 CFR 455.5.
\6\ Id.
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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
[[Page 38981]]
dealers display Spanish language Buyers Guides when conducting sales in
Spanish is 111,745 hours (2,069,351 hours x 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.
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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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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% x
29,214,371 vehicles sold x 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 x 2,368,993 hours).
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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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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.
Heather Hippsley,
Deputy General Counsel.
[FR Doc. 2019-16945 Filed 8-7-19; 8:45 am]
BILLING CODE 6750-01-P