Used Car Dealerships Can Still Sell Vehicles with Open Recalls

Used Car Dealerships Can Still Sell Vehicles with Open Recalls
Image: NCCC
August 11, 2015

An amendment that would have required used car dealerships to fix recalled vehicles before they're sold has been struck down by a Senate committee.

Heavy lobbying by auto trade associations worked in their favor as members of the Senate Committee on Commerce, Science and Transportation voted down the amendment proposed by Sen. Richard Blumenthal (D-Conn.), which would have prohibited the sale of recalled cars until defects were fixed.

Large used-car dealerships like CarMax, had the most to lose from passage of the amendment. Since the dealership isn't certified by manufacturers, it can't repair recalls and would need competing dealerships to do the work for them. Groups opposed to the amendment said that it would diminish a car's trade-in value and vehicles would remain on the sales lot awaiting fixes.

Consumer advocates, however, said the amendment was necessary to keep car dealerships from selling cars with potentially dangerous defects. A study by CALPIRG found that in a 48-hour period, 10 percent of the vehicles CarMax offered for sale in Oxnard, California were subject to open safety recalls. In the South Sacramento location, 9 percent of the vehicles had were recalled.

An amendment that would require rental companies to make repairs did make it out of committee and in the final version of the broader transportation bill.

The committee also approved increasing the fine for delaying recalls from $35 million to $70 million, but a Sen. Majority Leader Mitch McConnell proposed a bill that would increase the fine even higher at $105 million.