The “Magnuson-Moss Warranty—Federal Trade Commission Improvement Act” is a Federal law, US Code, Title 15 § 2301, Public Law 93-637, signed into law by President Gerald Ford on January 4, 1975. It covers aftermarket auto parts in these ways:
- “Simply using an aftermarket or recycled part does not void your warranty,” according to the Federal Trade Commission (FTC). An automobile dealer can’t refuse to honor the warranty that came with a new car if someone else does routine maintenance or repairs.
- It’s illegal for an automobile dealer to deny warranty coverage just because routine maintenance or repairs were performed by another person or business. “Routine maintenance” generally includes things like an oil change, rotating tires, replacing belts, fluid checks and flushes, installing new brake pads and inspections.
- According to the FTC, using aftermarket or recycled/re-manufactured parts doesn’t void a vehicle warranty. The Magnuson-Moss Warranty Act makes it illegal for companies to void a warranty or deny coverage under the warranty because an aftermarket or recycled part was used.
- The FTC defines an aftermarket part as a part manufactured by a company other than the original vehicle manufacturer/original equipment manufacturer (OEM).
The FTC’s “Rule on Disclosure of Written Consumer Product warranty Terms and Conditions,” also known as the Disclosure Rule, requires a written warranty on a consumer product to be clear and easy to read. It also contain specified items of information about its coverage. These requirements only apply if the product costs more than $15. If you’re an auto parts manufacturer or retailer concerned about warranties, the FTC encourages you to read “Writing Readable Warranties,” an FTC manual available from the Government Printing Office or hosted online by the University of Chicago Urbana-Champaign (scroll down to the link at the bottom).
How to write a warranty: Information required by FTC under Magnuson-Moss for auto parts warranties
The Federal Trade Commission (FTC) Disclosure Rule has five basic aspects of coverage that a warranty must describe. The FTC suggests thinking of these as five questions when creating a warranty for an aftermarket part or accessory, or for any product that includes a warranty:
1. What does the warranty cover/not cover? This question is simple when a warranty covers every type of defect that may appear in all parts of a product. This question is more difficult if some of the parts or not all kinds of defects are covered in the warranty. The scope of coverage has to be described in detail.
2. What is the period of warranty coverage? If coverage begins at a point in time other than the date of purchase, then the warranty must specify what triggers coverage. For example, if the product is installed, the warranty coverage may be different from when the product is purchased. The warranty must also make it clear if something would terminate warranty coverage. An example would be if the first purchaser transfers the product to someone else.
3. What will be done to correct problems? This requires the warranty to explain what remedy is offered under the warranty. Examples could be repair or replacement of an auto part, a refund of the purchase price, or a credit toward future purchases. The FTC also recommends explaining what a company will not do, if it’s required for clarity. This may include a description of the types of expenses, if any, that aren’t covered. For example, labor charges, consequential damages (costs of repairing or replacing other property that is damaged), or incidental damage. Examples could include the costs to obtain warranty service, such as towing charges, transportation costs, or the cost of renting something to replace the warranted product.
4. How can the consumer get warranty service? A warranty must tell customers where to go for warranty service. It also has to specify how to reach those companies. The warranty must to include the name and address of the company offering the warranty, and any person or office customers should contact if there is a problem. If they can call locally or toll-free, the warranty must give the phone number instead of the address. If customers should contact a service centers first, then the warranty must explain how this should be done.
5. How will state laws affect customers’ rights under the warranty? A warranty must answer this because implied warranty rights and certain other warranty rights will change from state to state. The FTC has recommended this disclosure to cover this question, rather than include every possible variation state by state, and this sentence must be included in every consumer product warranty: “This warranty gives you specific legal rights, and you may also have other rights which vary from state to state.”
How Magnuson-Moss defines warranties and brands
Under WARRANTY PROVISIONS, Section 201, Paragraph C, Magnuson-Moss states,
No Warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name; except that the prohibition of this subsection may be waived by the Commission if—
(1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and
(2) the Commission finds that such a waiver is in the public interest.
The Act also gives the FTC wide latitude in how it may write rules to follow the intent of the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act.
Learn more about how Magnuson-Moss affects consumers’ rights to install aftermarket parts:
FTC Validates Right to Install Aftermarket Parts from SEMA’s website.
Can an Aftermarket Part Void My Car Warranty? from Consumer Reports.
Magnuson-Moss Warranty Act from Auto Care Association.
Magnuson-Moss Warranty Act from Wikipedia.
Warranty and Aftermarket Parts from Autoblog.
Urge Strong Enforcement of the Magnuson-Moss Warranty Act from Tire Industry Association.
Writing Readable Warranties published by the FTC hosted at the University of Illinois Urbana-Champaign.
Marketing parts with warranties to consumers
If you are marketing auto parts to consumers and interested in vehicle owner mailing lists, read this post.
Sources used for this article
Sources: FTC Business Person’s Guide to Federal Warranty Law, and FTC Auto Warranties & Routine Maintenance, retrieved Sept. 1, 2017
Government Publishing Office, retrieved January 24, 2018.