[Federal Register: August 20, 2007 (Volume 72, Number 160)]
[Notices]
[Page 46487-46489]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20au07-69]
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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 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 June 30, 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 October 19, 2007.
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., NW., Washington, DC 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 http://www.regulations.gov, you may also file an
electronic comment through that Web site. The Commission will consider
all comments that regulations.gov forwards to it.
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 Web site, to the extent practicable, at http://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 Web site. 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: Under the Paperwork Reduction Act (``PRA''),
44 U.S.C. 3501-3520, federal agencies must obtain approval from OMB for
each collection of information they conduct or sponsor. ``Collection of
information'' means agency requests or requirements that members of the
public 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 regulations noted herein.
The FTC invites comments on: (1) Whether the required collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information has practical utility;
(2) the accuracy of the agency's estimate of the burden of the required
collection of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of the collection of information on those who are to
respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses. All comments should be filed as prescribed in
the ADDRESSES section above, and must be received on or before October
19, 2007.
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 Guide forms; (2)
entering applicable data on Buyers Guides; (3) posting the Buyers
Guides on vehicles; (4) making any necessary revisions in Buyers
Guides; and (5) complying with the Rule's requirements for sales
conducted in Spanish.
[[Page 46488]]
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, http://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 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 x 50% x 2 minutes per vehicle) and
701,000 hours for used cars sold under warranty (28,029,000 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, p. 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 thus 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 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.\10\ Therefore, staff
estimates that dealers annually will spend approximately 19,000 hours
revising Buyers Guides (28,029,000 x 2% x 2 minutes per vehicle).
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\10\ See note 10.
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5. Spanish Language Sales: The Rule requires that contract
disclosures be made in Spanish if a sale is conducted in Spanish.\11\
The Rule permits displaying both an English and a Spanish language
Buyers Guide to comply with this requirement.\12\ 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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\11\ 16 CFR 455.5.
\12\ 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.\13\ 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
posting). 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, would remain unchanged.
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\13\ 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%
601&-ds_name=ACS_2005_EST_G00_&_-lang=en&-redoLog=false&-CONTEXT=st.
The table indicates that 19.4%
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.
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
\14\ 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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\14\ 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.htmdoLog=false&-CONTEXT=st.
The table indicates that 19.4%
.
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Capital or other non-labor costs: Although the cost of Buyers
Guides can
[[Page 46489]]
vary considerably, based on industry input staff estimates that the
average cost of each Buyers Guide is 20 cents. Buyers Guides for the
28,029,000 used cars sold by dealers in 2006 would cost 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
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associated with the Rule are minimal.
William Blumenthal,
General Counsel.
[FR Doc. E7-16239 Filed 8-17-07: 8:45 am]