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New York City bans sale of used cars with unresolved recalls

August 15, 2014
New York City on July 30 became the first U.S. city to make it illegal to sell a used vehicle with an open recall. The city’s 800 used-car dealers now must fix any recalled vehicle before they sell it, and they also must fix vehicles with open recalls which they previously sold but didn’t repair. 
The new law, coming in the wake of the most recalls in automotive history, was enacted after an investigation by the New York Department of Consumer Affairs Commission, which sent subpoenas to new- and used-car dealers in the city. It appears the law includes all recalled vehicles, whether the recall was safety-related or for another issue.
The basis for the new law is an ordinance that requires dealers to certify that their vehicles are "roadworthy" and prohibits dealers from misleading car buyers when it comes to the safety of used vehicles for sale.
California considered a similar bill and even the Obama administration in April sought passage of federal legislation that would have prohibited the sale of used vehicles with open recalls. Those measures were defeated because the bills were overly broad and would have prohibited the sale of recalled vehicles, even if the recall had nothing to do with passenger safety.
 
The following is a guide for area dealers on the sale of vehicles with open recalls.
 
For new vehicles in inventory or in transit: Once any notice of an outstanding safety recall is received, federal law prohibits the delivery of impacted new vehicles until the recall is remedied.
 
For used vehicles in for service, in inventory, or coming into inventory that ARE of the same make as the dealer sells new: Federal law neither imposes an obligation on dealerships to know the safety recall status of used vehicles nor prohibits the resale of used vehicles with outstanding safety recalls. However, it is recommended that used vehicles of the same make a dealer sells new be checked for outstanding, unremedied recalls, since the dealership is authorized to do the service or repair work involved. If a dealership receives a recall notice indicating that certain used vehicles should not be operated and/or resold, they should not be operated or resold until the recall is remedied.
 
For used vehicles in for service, in inventory, or coming into inventory that ARE NOT of a make the dealer sells new: Federal law currently neither imposes an obligation on dealerships to know the safety recall status of used vehicles nor prohibits the resale of used vehicles with outstanding safety recalls. 
But 11 consumer groups in June asked the Federal Trade Commission to investigate Carmax, the nation’s largest used-car retailer, over unfixed recalled cars that it sold. The groups say CarMax does not fix vehicles that have been recalled before it sells them, even though the retailer’s ads promise that the vehicles have had a rigorous quality inspection.
In response to the filing of the petition, a CarMax spokesman, Casey Werderman, wrote in an email that "CarMax provides the necessary information for customers to register their vehicle with the manufacturer to determine if it has an open recall and be notified about future recalls."
The petition is not resolved.
 
 

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