Senators push dealers on recalled used cars
Two U.S. senators pressed the National Automobile Dealers Association’s top leaders to drop opposition to requiring the repair of recalled used cars before they are sold.
Congress has been grappling with the issue of buyers being unaware that they getting a recalled vehicle that hasn’t been repaired in the wake of deaths attributed to unrepaired used cars. The head of the National Highway Traffic Safety Administration has also prodded dealers to do more.
In letters sent Friday to NADA and the National Independent Automobile Dealers Association, U.S. Sens. Bill Nelson, D-Fla., and Richard Blumenthal, D-Conn., questioned whether dealers are placing economic concerns ahead of customers’ safety.
NADA spokesman Jared Allen said most recalls don’t require the immediate halt of driving. “There is no evidence that a blanket grounding of all used vehicles with open recalls will make the roads or consumers any safer. It would, however, severely depress the value of trade-ins with unremedied recalls, especially when parts aren’t available or whenever a consumer wants to trade in one make for another. This would cost consumers money, keep many stuck in older cars, and push more used cars into the private-sale market, making it less likely that those vehicles ever get fixed,” he said.
NADA wants all recalls completed “but achieving that requires policies that focus on consumer empowerment, not policies that are overly broad, harmful to consumers and ultimately counterproductive,” Allen said.
Transportation Secretary Anthony Foxx has also endorsed requiring the used car repairs.
“We remain very concerned that used car purchasers will be the only category of vehicle consumers unprotected against potentially dangerous recalled vehicles,” the lawmakers’ wrote. “Does NADA disagree that retailers bear responsibility and that ensuring customers’ safety should take precedence over economic concerns?”
The NADA and other dealer groups sent a letter to Congress in July urging them not to include used car car provisions,saying it would diminish used car values and force dealers to ground vehicles for months awaiting parts. NADA didn’t immediately comment.
Last month, the nation’s largest car retailer, AutoNation Inc., said it will no longer sell or lease used vehicles under recall until they were fixed. The move will require temporary grounding of at least 5 percent of its fleet.
The Florida-based auto retailer with 293 vehicle franchises — which sells 35 new vehicle brands across 15 states, none in Michigan — announced the new policy.
“There’s no way to expect that customers would or should know of every safety recall on every vehicle they might purchase, so we will ensure that our vehicles have all recalls completed,” said Mike Jackson, chairman, CEO and president of AutoNation. “We make it our responsibility as a retailer to identify those vehicles and remove them from the market until their safety issues have been addressed.”
Federal law prohibits the sale of new cars under recall until they are repaired but does not require the same of used cars. Bills in Congress have been introduced to require the repairs first. The Senate Commerce Committee declined to add the provision to a highway reauthorization bill that was approved by the committee in July.
In April, NHTSA chief Mark Rosekind urged the nation’s more than 17,000 new-car dealers to do more to ensure unsafe vehicles are repaired.
“An act of Congress is not needed to address this situation: There is nothing stopping dealers, today, from handling all recalls before a vehicle is sold or rented,” Rosekind said, saying it is clear that “Americans are dying on our roads because of defective vehicles being rented or sold.”
Separate legislation is also pending to require rental car companies to fix recalled vehicles before allowing them to be leased.
“The standard needs to be that every time a rental car agency or a used car dealer hands the keys to a consumer, that car is free of safety defects. Every time.”
NADA President Peter Welch met in March with Rosekind and asked NHTSA to make data available to dealers to make it easier to check for open recalls.
Welch thinks dealers should focus on ensuring used vehicles with the most serious issues have recall repairs completed before being sold, rather than a blanket rule.
“You have to use some common sense,” Welch said in April. “We want to work toward a workable solution — a sensible solution. ... We can’t clog up used-car commerce.”