Buying that new-used car: Congress must put safety first

by Michael R. Lemov
January 20, 2017

The incoming Congress needs to act now to close a gaping loophole in the 50-year-old federal automobile safety law. That gap in consumer protection exposes millions of buyers of used vehicles, such as cars, vans and SUVs, as well as drivers, occupants and other people to the risk of death and injury from unrepaired safety defects in the cars they purchase.

That’s because buyers of used cars are not protected by the federal recall safety law. There are a few state and local laws that bar selling vehicles with unrepaired safety recalls outstanding. But the federal safety law mandates only that new car manufacturers send out notices and repair defects that affect the vehicle’s safety.

When the auto safety law was first passed in 1966, Congress required only manufacturers of new cars to notify owners of safety related defects. Eight years later it was amended to add a requirement that manufacturers repair new vehicle safety defects without charge. Somewhat mysteriously, sellers of used cars, both new and used car dealers, were exempted again from warning their customers about known safety defects and from repairing those defects.

The “used car loophole” may have occurred because used cars were seen as a minor market. It was relatively small at the time the legislation was written. But today, used cars outsell new cars by the surprising ratio of more than two to one.  In 2016, that translated into 36 million used cars versus 16 million new cars sold.

A vehicle on our roads may have been recalled by the federal government for one of hundreds of different safety-related defects. In 2016, for instance there were recalls of more than 50 million vehicles for nearly 900 separate safety defects.

Unrepaired safety defects can be deadly in any motor vehicle, new or used. That is what happened to Delia Robles, a Riverside, California woman who was driving a 2001 Honda that was bought used. She was on her way to get a flu shot when she had a minor fender-bender. The car’s airbag exploded and killed her. The Takata airbag along with over 100 million like it had been recalled by Honda, but the manufacturer’s notification never got to Ms. Robles or her son, who bought the car for her. She was its fourth owner.

A comparable tragedy occurred in connection with a faulty power steering hose in a Chrysler PT Cruiser rented by Enterprise to two young sisters, Raechel and Jacqueline Houck of Santa Cruz (20 and 24 years old). An unrepaired safety defect caused Raechel to lose control of the car, veer across the center median and collide head on with an oncoming eighteen- wheeler truck.

It took a ten year struggle by Cally Houck, the mother of the two young women, plus a few sympathetic backers to convince Congress to amend the auto safety act in 2015 to close the rental car loophole. The law now requires that all outstanding safety defects be repaired by rental companies renting more than 35 cars a year before the cars are rented.

But vehicles sold as used cars (not rentals) were excluded by Congress from the 2015 amendment after intense lobbying by new and used car dealers. They claimed a requirement to repair a used vehicle before it was sold would increase dealer costs and make used cars unaffordable.

Legislation has been introduced for years both in the Senate (by Sens. Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.) and in the House to finally close the “used car loophole” by requiring used vehicles to be repaired by dealers before they are sold. But the amendment remains in limbo.

Meanwhile, the problem for consumer has been compounded by a recent Federal Trade Commission consent order. In December, the FTC issued the order against General Motors and several used car dealers that said the dealers could sell unrepaired but defective used cars without disclosing that fact to buyers so long as the dealer did not affirmatively promise that the car was safe.

Examples of recent safety recalls which could exist in many used cars without being repaired are General Motor’s ignition switches that can shut off while the car is moving (disabling power brakes and steering), unprotected Chrysler gas tanks located dangerously close to the rear bumper without padding and Toyota’s vehicles that suddenly accelerate without warning. Many millions of these cars have not been repaired because, as with Ms. Robles, the manufacturer’s safety notice never caught up with a second or third owner.

How did we get to a point where the lion’s share of car sales can take place even if the car may have a known, recalled, unrepaired and deadly defect? When Congress wrote the original motor vehicle safety law in 1966, lawmakers probably did not foresee the large increase in the used car resale market, caused in part by the longer lifespan of many cars. Or perhaps they just could not overcome intense manufacturer and dealer lobbying against it.

The gap in used vehicle safety remains in the law today. We are all paying for it.

Michael R. Lemov is the author of “Car Safety Wars: 100 Years of Technology, Politics and Death”, published by Fairleigh Dickenson University Press (2015), and was counsel to the House Commerce Committee with responsibility for motor vehicle and consumer safety issues.

This article was first published in The Hill