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Senators push dealers to not sell used vehicles with open recalls

October 9, 2015
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 are buying 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 Oct. 2 to the NADA and to 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," Allen said, "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." 
The NADA wants all recalls completed, Allen said, "but achieving that requires policies that focus on consumer empowerment, not policies that are overly broad, harmful to consumers and ultimately counterproductive." 
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 the 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 that urged them not to include used-car provisions, saying it would diminish used-car values and make dealers ground vehicles for months while awaiting parts. 
AutoNation Inc., , the nation’s largest car retailer, last month said it no longer will sell or lease used vehicles under recall until they are fixed. The move requires the temporary grounding of at least 5 percent of its fleet.
The Florida-based auto retailer, with 293 vehicle franchises selling 35 new-vehicle brands across 15 states, 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 have been introduced in Congress to require the repairs first. The Senate Commerce Committee declined to add the provision to a highway reauthorization bill that the committee approved 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. 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," Rosekind said.
NADA President Peter Welch met with Rosekind in March and asked the 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."