No law requires recalled used cars and rentals to be fixed

The New York TimesMay 9, 2014 


David Clayton sits with his dog on his pickup at his home. A defective rear axle caused Clayton to nearly lose control of the truck.


David Clayton was driving 70 mph in his Ram 1500 pickup truck in October when he learned the hard way that it had a serious safety problem. The rear axle locked up, causing him to nearly lose control before wrestling the truck to the side of the highway.

Chrysler had ordered a recall of the pickup before Clayton bought it in July from a used-car dealer in Visalia, Calif. But the dealer never had the axle repaired – and was not required to do so under the law.

“That could have killed me,” Clayton said.

The United States does not have a law requiring the repair of used vehicles – including rental cars – that have been recalled for safety issues before they are rented or sold back to the public. Used car dealerships and rental car companies are allowed to fix problems when – and if – they see fit. And they are not required by law to disclose to customers that a vehicle is the subject of a recall.

Even as Congress and law enforcement officials investigate the delayed recall of 2.6 million General Motors cars for a defective ignition switch, auto dealers and many manufacturers oppose efforts to require recalled used and rental cars to be immediately repaired. These efforts include a measure recently sent to Congress and a separate Senate bill that has been languishing since 2011.

Dealers contend that not all recalls require immediate attention, though regulators say recalls, by definition, involve pressing safety concerns. And auto manufacturers, while not opposed in principle to mandatory repairs, want protection from rental car companies that might sue over lost business while recalled cars are out of service.

Major rental companies, under pressure from consumer groups, agreed in 2012 to support a bill calling for mandatory repairs and to abide by its terms, fixing them before renting them, even before it becomes law, said Sharon Faulkner, the executive director of the American Car Rental Association, which represents companies including Enterprise, Hertz and Avis.

But without a law, safety advocates and regulators say, consumers must take the rental car company’s or dealer’s word that the repairs were made, and they have limited ability to seek redress without that assurance.

“It should be a slam dunk,” said David J. Friedman, acting administrator of the National Highway Traffic Safety Administration, about required repairs. “To me it is hard to oppose ensuring that people who buy a car, whether it is new or used, or whether you are renting a vehicle, can have the confidence that it is safe.”

In the first four months of the year, 11.3 million vehicles were recalled in the United States. At any given time, there are almost 2 million rental vehicles on the road, according to Auto Rental News, a trade publication, though it is not known how many of those are subject to recall notices.

Safety advocates are pushing for change on two fronts in Washington: One is a proposal included in the budget for the Department of Transportation and the other is a bill about rental cars in the Senate.

The Transportation Department’s proposal is part of its Grow America Act, a 350-page budget plan covering four years. The repair provisions would require car dealers and rental agencies to idle vehicles under recall until they are fixed. The proposed legislation has been sent to both houses of Congress, and the Senate Commerce Committee has taken it up.

The bill in the Senate would apply only to rental cars. Introduced in 2011, it was largely a reaction to the death of two sisters, Raechel and Jacqueline Houck, who were killed in a recalled but unrepaired rental car in 2004. It is not seen as having enough support to pass as a stand-alone bill, but it could become part of a bigger piece of legislation.

“It’s just a question of how long it will take and how many people have to be killed or injured before it happens,” said Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, an advocacy group pushing for legislation mandating repairs.

CarMax, the nation’s largest seller of used cars, offers a “Certified Quality Inspection,” which does not include fixing recalls. CarMax does not support the NHTSA proposal in its current form, a spokesman, Casey Werderman, wrote in an email.

Rental car companies should be required to repair recalled vehicles, said Daniel Gage, a spokesman for the Alliance of Automobile Manufacturers, which represents 12 automakers, including General Motors, Ford, Chrysler and Toyota.

But automakers and rental agencies remain in a stalemate over supporting such a bill. The automakers wanted the Senate bill to contain “simple, straightforward language” that prohibits rental car companies from seeking loss-of-use damages because of a recall, Gage wrote in an email. Advocates of the bill say they offered language they thought addressed the issue, but Gage said it wasn’t clear enough. While GM and Toyota said they were reviewing their stance on the issue, Ford and Chrysler expressed support for the alliance’s position.

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