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Lawmakers look to close loophole concerning used cars, rental cars

As illustrated by our blog, the federal government wields considerable authority when it comes to dealing with dangerous auto defects, issuing fines and persuading automakers to institute a recall. Interestingly enough, however, this authority does not extend to the realm of both used cars and rental cars.

Specifically, there is currently no federal law dictating that used cars and rental cars that are the subject of an auto recall must be repaired before being sold or rented to consumers.

In other words, the current state of the law is such that neither car rental companies nor used-car dealerships have to disclose to customers that a particular vehicle was the subject of a recall or even fix the mechanical issue before handing over the keys.

What this also means to the consumer is that they have to take car rental companies and used-car dealerships at their word when they guarantee that the necessary recall repairs were made and that, absent this express guarantee, their legal options may be limited in the event of an accident.

"It should be a slam dunk," said the NHTSA's acting administrator of recall repairs. "To me it is hard to oppose ensuring that people who buy a car, whether it is new or used, or whether you are renting a vehicle, can have the confidence that it is safe."

The good news is that both lawmakers and vehicle safety groups are actively pursuing a change to this unbelievable problem:

  • The Grow America Act, the 350-page, four-year budget plan of the Department of Transportation, contains provisions calling for car rental companies and used-car dealerships to keep all vehicles under recall out of the hands of consumers until the necessary changes are made.
  • A separate Senate bill, which has sat largely idle since 2011, would call for these requirements to be applied only to rental car companies (experts believe it needs to become part of a larger bill to have a chance of passing).

Not surprisingly, these measures have encountered opposition from used-car dealerships and car manufacturers. Here, the former believe the repair requirements are unnecessary given that not all recalls require immediate action, while the latter are opposed to the measures due to their lack of a provision insulating them from lawsuits filed by the car rental companies seeking loss-of-use damages.

Here's hoping that federal lawmakers finally take the necessary action to keep consumers safe. In the meantime, those with concerns should know that they can check for recalls at the website

If you have lost a loved one in a car accident or suffered debilitating injuries that you believe can be attributed to a dangerous auto defect, consider speaking with an experienced legal professional to learn more about how to enforce your rights.

Source: The New York Times, "Recalled used cars roam the roads as federal legislation stalls," Rachel Abrams and Christopher Jensen, May 8, 2014

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