When we purchase a vehicle, whether it is new or used, we expect to receive a car or truck that is free from dangerous defects and is roadworthy. Unfortunately it seems that in the arena of used vehicles sales the old maxim caveat emptor, or buyer beware, applies in ways which the average consumer would not anticipate. This post will explore the disparities in the handling of new and used vehicles sales and the dangerous consequences of such a system. At The Reiff Law Firm our auto defect attorneys hope this post will help prospective car buyers understand the types of things federal law protects you from and the situations where the protections apply – and those situations where you are on your own. Understanding where the government’s safety oversight begins and ends can assist car buyers in making safe and prudent choices when you are purchasing a new or used car, truck or SUV.
Car Dealers are Prohibited from Selling a New Vehicle that is Known to be Defective
The Federal Motor Vehicle Safety Act forbids a car dealer or manufacturer from selling or delivering new vehicles that are under a stop sales order announced by the manufacturer or National Highway Traffic Safety Administration (NHTSA). 49 USC 30120(i)(1). But, a sale or lease can be made if the defect is remedied prior to the sale or lease. What this law does not do is it does not prohibit a dealer from merely offering the vehicle for sale or lease. 49 USC 30120(i)(2). However, the sale may not be completed until the defect has been corrected.
Thus in many ways when one is purchasing or leasing a new vehicle, the system works as one expects. Dealers cannot sell a vehicle that has a known defect that has been identified and recalled by NHTSA or the manufacturer. This is a fair approach as a reasonable consumer would expect to purchase a vehicle free from known defects and would likely never consider that a car dealer would be permitted to knowingly sell a vehicle that has been impacted by vehicle recalls without an inspection.
There is No Restriction on the Sale of Defective or Used Vehicles
Unfortunately when it comes to the sale or lease of a used car, truck or SUV, protections are not particularly stringent nor do they meet a reasonable consumer’s expectations in today’s safety-conscious world. Simply put, there is no federal or state law that requires the repair of safety defects in used vehicles or rental vehicles before they are sold or leased. In fact, there is no requirement for the used car dealer to provide the prospective purchaser with even notice that the vehicle was subject to a recall or recalls and may require repairs. Such an approach is counterintuitive because, logically, time permits the discovery of defects and problems with a vehicle thus making the used vehicles better positioned to leverage this information and safety data. However, that isn’t what happens or what the regulatory system currently requires. Considering the number of major safety recalls in 2014, such a system is not only irresponsible but it also undoubtedly leads to needless and largely preventable deaths.
Congress Fails to Protect Used Car Buyers
Safety advocates have pushed Congress and Congressional leaders for a change in these disparate regulatory regimes, but stiff opposition from used car dealers has scuttled bills to expand consumer protections to used vehicle leases and purchases. A bill that would require rental car companies to repair vehicles with known defects before offering them for rental has been stalled in the Senate since 2011. Furthermore, as part of the Grow America Act, a proposal to require used car dealers to repair vehicles with known defects prior to their sale has been introduced to Congress, but not passed. As of November 2014, approximately 92,000 Americans have signed a petition hosted at Change.org that urges Congress to prohibit the sale of recalled vehicles to consumers.
The Potential Impacts of this Rule
To better understand the potential impacts of this approach, first, let’s travel back to the early 2000s when the Firestone defective tire recall was becoming part of the national vehicle safety conversation. From the Firestone recall, the Early Warning Reporting (EWR) system came into existence to identify safety problems more quickly and thus prevent problems from developing into nation-wide crises. While many, including this blog, have questioned how effective the EWR system has been, EWR was but one lesson from the Firestone recall. However, the lesson we failed to learn from the Firestone recall is one that we are struggling with to this very day: defective products do not identify themselves nor do they remove themselves from the marketplace. In fact, in November 2013, two Firestone Wilderness tires recalled in 2000 were found being offered for sale as new tires at an Atlanta, Georgia store. Of the 2.8 million recalled tires, only about 90,000 have been confirmed to be removed from service. As for the rest, motorists have likely been unknowingly driving on defective tires or the tires are still being offered for sale somewhere in the US. While the risk of being impacted by the Firestone defect decreases with each and every passing year, newly discovered automobile defects will continue to perpetuate this underlying problem with recalls in the US.
2014 brought two safety recalls that transformed into massive safety debacles that damaged the reputations of federal regulators, vehicle manufacturers and parts suppliers. The General Motors (GM) ignition switch defect was first noticed in 2001, but a recall did not occur until February 7th, 2014 which initially affected about 800,000 Chevrolet Cobalts and Pontiac G5s. As of today, the recall has expanded to 29 million vehicles. The Takata exploding airbag recall has affected vehicles since, at least 2001, but regulators did not realize the scope of the problem until this year. To date, the Takata recall has been expanded time and time again and now affects approximately 8 million vehicles across at least 10 manufacturers. These are but two high –profile recalls that make up the hundreds of safety recalls issued each year.
Thus, what we now have is the aftermath of a period in auto safety where for years, at least superficially, it appeared that major auto safety defects and their resultant recalls were something of a relic of the past. Despite some isolated recall campaigns, like the Toyota unintended acceleration defect, many seemed to believe that the work of consumer advocates beginning with Unsafe at any Speed in the 1960s had improved auto safety to the point where massive recalls would not occur. Unfortunately this characterization was inaccurate. What was really happening throughout the 2000s was that millions of defective vehicles were being produced and sold, but regulators were unable or unwilling to connect the data points or ask tough questions of the companies that they were supposed to be overseeing. In the meantime, massive problems were brewing that would only bubble to the surface in bits and fits until consumer outrage forced NHTSA to begin to alter its previously deferential approach.
What we now face is approximately 13 years of defects and safety problems that have been allowed to fester and build despite the goals of the EWR system. As we saw in the much smaller Firestone recall, many of these vehicles are unlikely to be repaired or serviced and yet, many will be traded-in or sold as the owner grows tired of the vehicle and looks to upgrade. What this means is that in the coming years millions of used car buyers will purchase vehicles that are known to contain serious defects. Making matters even worse, these buyers are unlikely to even consider that a vehicle that is new to them could or would be sold without an inspection for and repair of known vehicle defects.
Consider that a used car buyer could walk into a dealership today and purchase a 2010 Chevrolet Cobalt – a vehicle known to be impacted by the ignition switch defect and at least 5 other recalls. The dealer would not have to fix these known problems or even inform the driver that these recalls exist. The motorist then drives off the lot with what he or she thinks is a safe vehicle to travel to work or drive his or her children around in. At this point, the best case scenario is the defect never presents itself or a minor problem with the vehicle causes the new owner to seek an independent opinion. Worst case scenario, a serious accident occurs that causes preventable injuries or deaths. Unfortunately, absent a change in this counter-intuitive regulatory law, hundreds or thousands of people will needlessly be injured or killed due to known defects in used vehicles.
Were you injured in a car accident and think you need legal representation? Contact a Delaware County car accident lawyer of The Reiff Law Firm for help today.
49 U.S. Code § 30120 – Remedies for defects and noncompliance
Change.org Petition: Stop selling unsafe, recalled cars to consumers