the Blumenthal Used Car Recall Amendment to the Senate Highway Bill Amendment:
It Hurts Consumers and Rolls Back Safety Protections
The “Blumenthal Amendment” would:
bar dealers from selling a recalled vehicle
unless it has been remedied; needlessly disrupt the buying
and selling of used cars for consumers; and roll back safety protections by
pushing recalled cars into the unregulated private market, making it even less
likely the cars will get fixed.
The Amendment does not actually require
fixing the recalled vehicle, and grounds all used vehicles, even ones with
minor compliance issues. Everyone agrees that serious recalls accompanied by a “stop drive” notice need to be grounded. When a recall involves a “stop drive”, vehicles are held in inventory until the vehicle is fixed. The Amendment, however, would also ground
recalled vehicles for minor safety compliance matters, such as: a misprinted phone number in the owner’s manual; an airbag sticker that may peel off the sun visors; tire labels with incorrect gross axle weight ratings; and brake reservoir cap labels using pictographs rather than text.
The practical effect of the Amendment will make
it difficult for consumers to trade-in cars with open recalls and devalues a customer’s trade-in. Due to a shortage of recall parts, it often takes weeks or months for many recalled vehicles to be repaired. The Amendment will prompt dealerships to pay significantly less for trade-ins with open recalls, if they decide to accept
them at all. These trade-ins are often critical to help consumers afford a newer, safer vehicle.
Consumers will have fewer options
to trade in their vehicle. Dealerships will be less likely to take an “off-brand” vehicle in trade. For example, a Chevrolet dealership is unlikely to accept a Ford trade-in subject to recall, when they can neither fix the vehicle nor sell it.
Rural consumers would be hurt the
most. For some franchises, dealerships will be especially reluctant to take-in trades subject to open recall if the nearest dealership authorized to do repair is hundreds of miles away. For example, a dealership trading a Lexus in North Dakota would have to take it out
of state to have it repaired by a Lexus dealership.
Unrepaired vehicles will be
pushed into the unregulated private market.
By devaluing trade-ins and not similarly regulating private sales, frustrated vehicle owners will resort to selling their vehicles in the private market, where the consumer has almost no safety or consumer protections, making it even less likely the vehicles
will get fixed.
This Amendment is not a solution to boosting recall completion
rates. It does not address the shortage of recall parts or why a quarter of vehicle owners simply choose not to fix their vehicle. Grounding vehicles with open recalls will not lead to faster repairs. The best way to strengthen consumer protections is to ensure that the most pressing safety recall issues are fixed
in a timely manner. The Senate should reject the Blumenthal Amendment.
Download these Talking Points