The Automotive News reports that the “auto dealer lobby won a…battle in December when a ban on selling used vehicles with open safety recalls was left out of the highway bill.” However, consumer and safety advocates are lobbying the FTC, automakers, and dealers to close off what they call a dangerous loophole. In addition, the NHTSA says “it’s not done fighting for an end to the sale of any vehicle – new or used – with an unfixed safety recall.” Spokesman Gordon Trowbridge said, “We’re happy to see any steps to help protect consumers and prevent the sale of vehicles under recall.” The News explains that the highway bill “contains provisions that bar rental agencies from lending vehicles with open recalls, but NADA’s influence on Capitol Hill helped kill an amendment by Sen. Richard Blumenthal, D-Conn., that would have extended the ban to used-vehicle sales.” NADA spokesman Jared Allen says Blumenthal’s amendment was “overly broad” and “counterproductive.”
Recalled cars prove costly for car dealers. Reuters reports that Honda’s recall of 2.2 million vehicles is worsening financial and regulatory problems for car dealers stuck with millions of vehicles with defective air bags and other safety devices. Reuters points out that it’s legal to sell used cars with unrepaired defects but dealers could be violating franchise agreements with manufacturers. Meanwhile, independent dealers can still sell the vehicles, a situation NHTSA calls a “safety loophole.” Reuters points out the FTC warned last month automakers and dealers can’t sell cars as “certified pre-owned” if recall repairs had not been addressed.
From the news release of the American Association for Justice.