Used-car dealers won’t have to worry about a federal requirement of bearing the burden of fixing recalls before being allowed to resell used vehicles. At least, for now.
This is in light of a Senate Committee on Commerce, Science, and Transportation mark-up meeting on Wednesday that voted on several legislative actions attempting to alter operations in various areas of the United States’ transportation sector, including highway, rail and port-related issues.
While many areas of transportation in the U.S. will be affected, the key takeaways for used-car dealers are as follows.
The committee passed S. 1732, a multi-year transportation bill including multiple amendments that the committee says offers critical regulatory and consumer protection reforms. As we reported a few days ago, the Republican-driven bill will directly affect franchised dealers and car rental companies by requiring them to provide consumers with notification of open safety recalls.
The Democratic amendment proposed by senators Ed Markey (Massachusetts), Bill Nelson (Florida) and Richard Blumenthal (Connecticut) that would require used-car dealers to repair recalled vehicles prior to their resale was shot down by the committee.
That same amendment would have also required dealers to check for and fix safety defects subject to open recalls, with customer permission, when such vehicles were taken in for routine maintenance. Per the specific wording of the amendment, the auctioning of used-vehicles would be exempt from repair requirements.
Sen. John Thune, the Republican senator from South Dakota and chairman of the committee that sponsored the bill that passed showed his hesitations toward the Democrat-sponsored amendment that would specifically require used-vehicles to be repaired prior to their sale by a dealer.
“Just let me say in response that requiring used-car dealers to remedy any open recall prior to sale could have unintended consequences, negative consequences, for consumers in the used-car market,” Thune said. “Cars would sit on used-car lots for potentially long stretches of time before the used-car dealers could get them repaired as used-car dealers would not be a recall-repair priority for franchised dealers.
“Used-car dealers would also likely be reluctant to accept trade-ins or otherwise purchase cars from consumers with open recalls even from minor defects because they would have to repair the car before it could be resold. I appreciate the intent of this amendment, and I’m open to continuing to work on the issue, but I don’t think we have addressed the potential implementation issues so I’m going to vote no at this time and would urge my colleagues to do the same.”
Washington-state Democrat Sen. Maria Cantwell spoke in defense of the legislation, bringing into the conversation the lives that have been lost due to used vehicles sold with unrepaired recalls.
“New-car dealers cannot sell vehicles under recall, but used-car dealers can,” Cantwell said. “So this presents a real danger to the public. In fact, several individuals who died from exploding Takata airbags purchased used cars that hadn’t been fixed. So consumer safety requires corporate accountability — this would also have accountability from third-party vendors, and I think this amendment would help achieve that.”
At the closing of the mark-up session, Blumenthal addressed Thune and lightly expressed his dissatisfaction with the speed of the processes involved with various issues related to the various amendments he tried to get passed.
“Thanks Mr. Chairman. I want to join in thanking for adopting the measures that you did and express the hope that we can reach agreement on some more,” Blumenthal said. “I think that there is always a tendency to articulate what happens here as overly simplistic terms. Essentially I think that we’ve taken some steps, they strike me as baby steps, in the right directions when we should be making giant strides given the absolutely gut-wrenching, heartbreaking stories we’ve heard in this very room about the real-life consequences of safety lapses and gaps in our present laws. I’m hoping we can correct some of them. Thank you.”