Final answer:
The terms of the warranty on the Buyer's Guide under the FTC Used Car Rule are enforceable and sellers must comply with them.
Warranties promise to fix or replace the car within a certain time frame, and service contracts can be purchased for extra coverage. Advertisements are regulated by the FTC to prevent outright falsehoods, encouraging consumers to be vigilant.
Step-by-step explanation:
Under the Federal Trade Commission (FTC) Used Car Rule, the terms of the warranty as stated on the Buyer's Guide are legally binding.
This means that the seller must abide by the warranty terms as presented. A warranty in this context is a seller's promise to fix or replace the good, at least for a specified time period. Furthermore, buyers may have the option to purchase a service contract for an additional cost, which typically covers any malfunctions for a set duration.
In terms of advertising and the selling points made by car sellers or manufacturers, the FTC ensures that any factual claims about the product's performance are checked for accuracy.
Advertisements may contain language and imagery that is exaggerated or ambiguous but not explicitly false. However, clear-cut untrue facts are prohibited. Consumers are advised to maintain a 'caveat emptor' or 'let the buyer beware' attitude, which highlights the importance of being informed and cautious when making a purchase.