NEVER trust a car dealer to make sure a car is safe.

Posted on September 9, 2020 by admin

When you shop at a car dealership, you shouldn’t have to worry that they’re deliberately selling you a deathtrap. But that’s what many unscrupulous new and used car dealers all over America are doing.

Car dealers keep getting caught selling vehicles with deadly safety recall defects, like faulty brakes, loss of steering, catching on fire, sticking accelerator pedals, and exploding Takata airbags that shoot metal shrapnel into the passenger compartment, causing drivers and passengers to lose their eyesight, suffer brain damage, or bleed to death.

Car dealers coast-to-coast are exploiting the widespread misconception that if you shop at a dealership, they must have gotten any deadly safety defects fixed. Otherwise, why pay extra, if the car is no safer than if you bought it from a stranger who posted it on Craig’s List?

Even highly sophisticated consumers, including Members of Congress and reporters who cover the automotive industry, suffer from this mistaken belief that somehow vehicles are safer if they’re on a car dealer’s lot.

That erroneous belief tends to be even stronger when the dealer claims the vehicle was thoroughly inspected, and when the dealer is a major franchised dealership.

U.S. Rep. MarkWayn Mullin, of Oklahoma, a GOP Member of Congress, stated at a Congressional hearing on auto safety that “I understand the responsibility of the driver. But at the same time, if you buy a vehicle new or used, you assume everything’s perfect on it.”

The former Administrator of the National Highway Traffic Safety Administration, Dr. Mark Rosekind, who was testifying at the hearing on behalf of the Obama Administration, agreed.

Recently, Automotive News reporter Richard Truett wrote:

“For me, there’s a certain trust the comes with buying a used car from a franchised new-car dealer. I feel I’m not going to get an unsafe car. And it’s worth paying a small premium to know that the vehicle has been inspected and that technicians examined the critical items. Most techs, I believe, would not let a used vehicle go out for sale if they wouldn’t put their own family in it.”

Sadly, that trust is terribly misplaced. As many news organizations have reported, and the CARS Foundation and our research partners at U.S.PIRG and the Frontier Group have repeatedly found, both new car dealers and used car dealers routinely fail to get deadly safety recall defects repaired, even though the repairs are free.

A car dealer in Hartford, Connecticut sold a young African-American man who was buying his first car a 2011 Hyundai Sonata SE with an appalling 11 unrepaired safety recalls. The safety defects included: faulty airbags, bad brakes, stalling in traffic, and other life-threatening defects. He fought back and won a favorable decision in arbitration, including a refund and his attorneys fees.

More reports about car dealers who sell unrepaired recalled cars with deadly safety recall defects:

‘It’s Recalled Car Roulette’: Some Used Cars Sold With Unrepaired Safety Recalls

Click here to see CARS’ tips for how to get a good deal on a safe used car without having to deal with professional crooks who put their short-term profits ahead of your safety, and the safety of your family and friends.

CarMax settles charges it illegally dumped hazardous waste throughout California

Posted on July 7, 2020 by admin

CarMax agreed to pay $1.6 million to settle lawsuits brought by 16 District Attorneys charging the auto dealership chain with illegally dumping hazardous materials at CarMax stores throughout the state of California, for six years, from 2014 – 2020.

According to news releases issued by the District Attorneys, CarMax illegally disposed of solvents, aerosols, automotive paints, clear coats, and other hazardous substances that the company used during the auto body repair process.

CarMax also continues to sell hazardous unrepaired recalled used cars without bothering to get the free safety recall repairs done first, placing its customers and others who share the roads at risk of being injured or killed.

See a pattern?

New York Honda dealership penalized over discriminatory practices

Posted on June 26, 2020 by admin

Car dealers and lenders keep getting caught engaging in discriminatory practices, cheating consumers based on race, particularly harming car buyers who are African American and Latino.

It’s illegal, but many auto dealers persist in targeting people of color, selling them overpriced junkers and charging them extra for worthless add-ons and sky-high interest rates.

One of the more blatant examples: According to the Federal Trade Commission, “Bronx Honda told their employees to charge African-American and Latino people higher interest rates and fees when they applied for dealer financing.” The agency also said that the dealership paid their employees bonuses for ripping off people of color. The worse the terms, the higher the bonuses.

“People who were shopping for a Certified Pre-Owned Honda were also told that ‘certification’ and other fees (which often added up to $3000) were required. Despite the fact that the cars were Certified Pre-Owned before they arrived on the sales floor.”

The FTC also alleged the dealership often added additional “fees,” in the form of a higher total sales price or monthly installments, without telling the buyers. This scam is very popular among auto dealers, who exploit “e-contracting” to conceal the predatory prices from their victims.

Sometimes, consumers never even see what is on the computer screen. They don’t know what the real cost is until it’s too late. CARS heard from one consumer who bought a new car from a dealership in Vallejo, California, who was repeatedly promised it would cost $24,000. But when the contract was printed out, with his “e-signature” on it, the price was over $48,000 — more than double what the dealer had promised.

How can you avoid paying too much for your next car? Here are CARS’ tips for car buyers, showing step by step how to get a good deal on a safe, reliable used car without having to buy from a professional, racist crook.

FTC News release: NYC Car Dealer Accused of Discriminatory Lending

Santander to pay $550 million over predatory auto loans

Posted on May 21, 2020 by admin

Greedy subprime auto lending giant Santander is settling charges filed by 33 state Attorneys General and the District of Columbia, by paying $550 million.

The law enforcement officials charged Santander with engaging in predatory auto lending practices, including:

Approving auto loans Santander knew low-income car buyers could not possibly repay, resulting in an astronomical and devastating default rate of over 70%
Turning a blind eye to common scams that auto dealers engage in, such as falsifying loan applications to make it appear the used car buyers had far more income than they really had

“Santander profited by approving high-cost loans to disadvantaged auto buyers who were doomed from the start,” said California Attorney General Xavier Becerra in a statement.

As part of the settlement, Santander will provide over $99 million in relief to thousands of California consumers who Santander approved for its abusive high-cost loans.

Consumers with the lowest quality loans who had defaulted as of December 31, 2019, and have not had their cars repossessed, will be allowed to keep their car and have any deficiency balance on the loan (up to a total value of $45 million in deficiency waivers nationwide) waived.

Santander will also waive the deficiency balances for certain defaulted consumers across the country, with approximately $433 million in immediate forgiveness of loans still owned by Santander, and additional deficiency waivers of loans that Santander no longer owns but is required to attempt to buy back.

When consumers default on auto loans, lenders like Santander swoop in and repossess their vehicles, often causing them to lose their jobs. When car buyers lose their only way to get to work, some become homeless. In states like California with huge areas that provide little access to public transportation, losing a vehicle can be a death sentence, particularly for people who are elderly or disabled, or live in rural areas or other parts of the state where they are unable to access health care without a car.

Did you have an auto loan with Santander? Or was your vehicle repossessed by Santander? We’re very interested in hearing from you. Please contact CARS, so we can listen to your story and help prevent more people from falling prey to scummy subprime auto lenders.

HUGELY popular, hilarious, and biting John Oliver video showing how unscrupulous auto dealers and lenders scam car buyers

California DMV punishes car buyers for others’ debts

Posted on May 16, 2020 by admin

Yes, it’s unfair. And yes it’s crazy. Especially now, when California Governor Gavin Newsom and his administration are working hard to protect consumers from debt collectors during the pandemic, to mitigate the economic fallout.

But if you buy a used car in California, the California Department of Motor Vehicles can sock you with having to pay for past-due registration fees and penalties owed by the former owner.

Imagine the shock car buyers feel when they buy a used car, only to find out later that it comes with an unwanted accessory — a boatload of bad debt.

This happens even to consumers who shop at auto dealerships. And there’s no limit on how much extra you can be charged. An overdue registration can cost you $300, $1000 or more in hidden, unexpected fees and penalties.

California law allows the DMV to impose a lien on the registration, until it is paid in full. It’s illegal to drive a car with expired license tags or registration. So if you refuse to pay, or can’t afford the unexpected expense, you can lose your car. The California Highway Patrol can pull you over, issue a “fix-it” ticket that you can’t afford to fix, or impound your car. If you aren’t the registered owner, you can’t get your car out of impound, even if you scrape together the cash to pay the hefty towing and impound fees.

Glenn Harris, a U.S. Army veteran and devoted family man with a wife and three children, testified before the Senate Committee on the Judiciary and described their ordeal:

“While I was driving to work recently, the CHP pulled me over. They noticed that I was driving with a temporary sticker that had expired, and my car was impounded. The CHP also said there was over a year of back fees owed to DMV that Express Auto Sales never paid.

They said we had to pay the DMV those extra fees, from before we even bought the car, before it could be registered in our names. We can’t afford to pay DMV those unexpected fees, that were not disclosed when we bought the car, on top of what we’re already paying the bank.

I can’t afford to pay the hefty impound fees, which are hundreds of dollars. I also can’t get the car out of impound because I am not the registered owner. Even if I got the car out of impound, I couldn’t afford to get it registered, so I may get pulled over and ticketed again.”

What will it take for the California DMV and lawmakers to end this grossly unfair practice, which can ruin the lives of innocent used car buyers who have done nothing wrong? All they did was to buy a car from a licensed dealership.

How many Californians have already been made homeless because the DMV and law enforcement agencies seized their vehicles — often their only means of transportation to get to work or school, buy groceries and access medical care and other necessities of life?

Read more: California Vehicle Code Section 9562. (a) When a transferee or purchaser of a vehicle applies for transfer of registration, as provided in Section 5902, and it is determined by the department that registration penalties accrued prior to the purchase of the vehicle, and that the transferee or purchaser was not cognizant of the nonpayment of the fees for registration for the current or prior registration years, the department may [or may not] waive the registration penalties upon payment of the fees for registration due.

This means that the DMV might choose to waive the penalties, but not the past-due registration fees, even if the consumer can somehow convince the DMV that they are totally innocent and were unaware of the prior owner’s debt.

Auto dealerships re-open – but is shopping there safe?

Posted on May 12, 2020 by admin

Buying cars at auto dealerships has always been risky. But especially now, when you may be exposed to Covid-19, the risks are even greater. Plus Covid-19 isn’t the only health and safety risk you face if you shop at a car dealership.

Many auto dealers don’t care enough about their customers’ safety to take the simple step of ensuring that FREE safety recall repairs are done to fix deadly safety recall defects.

Auto dealers neglect to get free repairs done to fix killer defects like:

bad brakes
steering wheels that literally come off in the driver’s hands
exploding Takata airbags that are like having a hand grenade go off in your face, causing blindness or bleeding to death
catching on fire
sticking accelerator pedals

So can you trust auto dealers to protect you from Coronavirus? Obviously, the answer is NO.

Even huge auto dealership chains like CarMax and AutoNation sell hazardous vehicles with safety defects that have killed hundreds of people and seriously injured thousands more.

They spend millions in advertising to lure car buyers to their stores, trumpeting that vehicles they offer for sale must pass an “inspection.” They list over 100 components that are supposedly inspected. But don’t be fooled. They routinely fail to fix components with serious safety recall defects that are likely to kill you or someone you love.

CarMax is the largest retailer of used cars in the U.S. They raked in over $18 billion in revenue last year, and are publicly traded on Wall Street.

CarMax used to hire employees and task them with delivering recalled cars to nearby new car dealerships for free repairs. New car dealers liked to get the work. Auto manufacturers compensate their franchised dealers for performing safety recall repairs, so it’s a money-maker for them.

But then CarMax decided they could make more money by lowballing consumers who traded in recalled vehicles, then selling them rapid-fire for high retail as “CarMax Quality Certified” vehicles without waiting for the free repairs.

AutoNation is also publicly traded on Wall Street and boasts they are a Fortune 500 company with over $21 billion in revenue. Their largest investors include the trust controlled by the Bill and Melinda Gates Foundation.

At first, AutoNation announced they would guarantee that all their vehicles were recall-free. But when Trump was elected, faced with competitive pressure from CarMax for investor dollars, they gave up and started selling dangerous recalled vehicles too.

The kicker: If you are injured or killed, or harm someone else because of an unrepaired safety recall defect, the dealers will blame YOU for buying a dangerous car from them.

Learn more:

CBS News:CarMax Accused of Selling Unsafe Vehicles

CBS This Morning: AutoNation Accused of Selling Recalled Cars

CARS tips: How to get a good deal on a nice, safe used car without the risks of buying from a dealer

Greedy car dealers snatch paycheck protection funds from small businesses

Posted on May 7, 2020 by admin

Profiles in GREED:

Multi-billion $$ mega-dealers AutoNation, Penske, and Group One Grab

At least $144 million from Paycheck Protection Plan

Trump Administration Aided Giant Corporations in Exploiting Loophole

AutoNation, the nation’s largest retailer of new vehicles, boasts that it’s a “Fortune 500” company with 26,000 employees and stores in over 300 locations in 18 states. In 2019, AutoNation raked in over $21 billion in revenue.

The corporate behemoth is also publicly traded on Wall Street. According to Barrons, “Bill Gates remains AutoNation’s largest shareholder. Through shares held by the [Bill and Melinda Gates Foundation] trust and 18.4 million AutoNation shares that Cascade owns, the co-founder of Microsoft (MSFT) still has total ownership of 19.3 AutoNation shares, a 21.6% stake.”

Penske Automotive, another giant auto dealership chain publicly traded on Wall Street, hauled in over $22.8 billion last year.

Group One Auto’s annual revenue was $12 billion.

So how did AutoNation, Penske, and Group One grab at least $144 million from the U.S. Treasury’s Paycheck Protection Program (PPP), while struggling businesses like restaurants, beauty parlors, nail salons, print shops, booksellers, self-employed people, and other small businesses tried in vain to access relief that was supposedly going to help them keep the wolves from their doors?

The PPP was supposed to be limited to businesses with fewer than 500 employees. But AutoNation, Penske, and Group One exploited a loophole provided by the Trump Administration’s Small Business Administration for mega-businesses with franchises in multiple locations, allowing them to each file for relief separately, even when they are all owned by the same conglomerate.

The National Automobile Dealers Association (NADA) tutored its mega-dealer members on how to exploit the loophole, instructing them how to get around the 500-employee limit. The key to evading that limit was for the auto manufacturers to get a “franchise identifier code” from the Small Business Administration, so their dealerships could all masquerade as “small businesses” even when in reality they are enormous.

The NADA also engaged in various machinations to make sure all their dealer members, regardless their size, could apply for the taxpayer funds. The NADA brags that when the CARS Act was first passed, only about 25% of the U.S. auto manufacturers had obtained the coveted codes from the Small Business Administration. However, “in response to strong urging from NADA, all [the auto manufacturers] without codes quickly applied for them. And again in response to NADA’s advocacy, the SBA has now granted all of those applications.”

Basically, the NADA is trumpeting the fact that huge auto dealership chains exerted their influence with the Trump Administration, to get the SBA to expedite providing those handy “franchise identifier codes” in time to scarf up at least $144 million of taxpayer dollars before day care centers, ice cream parlors, pet sitting services, bakeries, or other mom and pop stores desperate for cash even had a chance.

The NADA’s tips are posted on their website, showing dealers how to game the system.

In fact, AutoNation may have snatched even more. According to the Washington Post, “Documents show the company may have received even more money, a total of $95 million, spread across dozens of locations, an amount that would be more than triple the amount any company is known to have received through the fund.” The article notes that “AutoNation disputes the $95 million figure.”

While AutoNation claims it has returned $77 million in taxpayer funds it scooped up from the PPP, without an independent audit of the program, they can hardly be believed. For weeks, while other corporations like Shake Shak and Ruth’s Christ SteakHouse, facing a firestorm of protests, surrendered their ill-gotten millions. Meanwhile, ignoring the plight of small businesses and laid-off workers, AutoNation callously clung to the vast sums they seized from taxpayers — until they were contacted by reporters from the Washington Post.

This is not the only way AutoNation is exploiting loopholes provided to auto dealers by the Trump Administration.

AutoNation is also jeopardizing public safety by deliberately selling its customers hazardous vehicles without repairing deadly safety recall defects first.

When Trump was elected, AutoNation’s CEO Mike Jackson announced AutoNation was reversing its policy of guaranteeing a recall-free car, and commenced selling dangerous deathtrap vehicles — including vehicles AutoNation knows cannot be repaired for prolonged periods, due to severe shortages of replacement parts.

Last fall, researchers for USPIRG Education Fund, the Consumers for Auto Reliability and Safety Foundation, and Frontier Group found that more than 1 in every 9 vehicles AutoNation offered for sale at 28 dealerships in 12 states, among 2,400 vehicles surveyed, had at least one unrepaired safety recall. Typical defects: catching on fire, faulty brakes, loss of steering, sticking accelerator pedals, and explosive Takata airbags that are ticking time bombs that spew shrapnel into drivers’ and passengers’ faces and necks, causing serious injuries including blindness and bleeding to death.

Washington Post: “AutoNation, a Fortune 500 company worth billions, says it received nearly $80 million in SBA funds”

Automotive News: AutoNation retreats on used car recall policy

Unsafe Used Cars for Sale: Unrepaired recalled vehicles for sale at AutoNation dealerships

Beware: Auto Lending Scams Can Cost You $$ and Harm Your Credit

Posted on April 10, 2020 by admin

Times of crisis tend to bring out the best in some people — and the worst in others. At the same time the nation is cheering on the courageous doctors, nurses, emergency medical technicians, firefighters, delivery workers, grocery store workers, and others toiling on the front lines to save lives, unscrupulous auto dealers continue to scam car buyers who fall into their clutches.

Auto sales have plummeted drastically. Some states have ordered auto dealerships to close their doors. But others are allowing them to remain open, deeming them to be an “essential” service, particularly for performing safety recall repairs.

Consumers are wise to be wary about making a major purchase when they are being laid off in record numbers, or their jobs are uncertain, at best. Plus no one knows for sure how long it will take for the economy to recover.

Auto manufacturers and dealers are responding to consumers’ anxiety and the downturn in car sales by advertising 0% financing and delayed payments, in an attempt to lure car buyers. But beware: many car buyers may not quality for those special rates, and after the “payment holiday” is over, you may be hit with hefty fees or other extra charges hidden in the fine print.

Even more than before, it pays to be cautious and shop around for credit before you buy. The safest thing to do is to join a credit union and get financing approved before you shop for a car. NEVER trust a dealer to find you the best terms for an auto loan.

Car dealers don’t want you to know this, but they rake in extra profits from lenders in exchange for raising the interest rate on auto loans, above the rate you qualify to get, based on your creditworthiness. The extra kickback is known as the “dealer markup” or “dealer participation.” It’s usually split with the lender, and can add thousands of dollars onto the price of your auto loan. It’s added profit, at your expense, and a huge source of revenue for auto dealers and lenders.

Beware: Auto dealers often claim in advertising and in person that they are shopping around for financing in order to find you “the best rate.” What they really mean is the best rate for THEM, not for YOU. In fact, lenders compete with each other to offer dealers incentives and sweeteners for assigning auto loans to them — costing you more.

You may also be surprised to learn that even if you never buy a car from a dealership, but just happen to walk onto a car dealer’s lot and browse around or test drive a car, unethical dealers may get your name, then pull your credit report and shop around for financing — without your permission. Their goal: to find out what you can afford to pay, and how much added “markup” they can get from various lenders for selling you a car, and assigning the sales contract to one of those lenders.

When dealers pull this stunt and shop around among many lenders, it’s known in the automotive trade as “shotgunning” credit. Under some circumstances, it may cause only a small dip in your credit score. But particularly if dealers pull your credit repeatedly, over a period of time, it can cause your credit score to plummet, greatly increasing the cost of credit for future purchases. It’s also an invasion of your privacy and may leave you more vulnerable to identity theft.

In one court case that is now pending in Pennsylvania, a consumer alleges that she popped into a Volkswagen dealership, but made it clear she wasn’t going to buy a car, and was just scoping out various models. She didn’t sign anything. But the dealer made 7 “hard pulls” on her credit, causing her credit score to take a nose dive.

According to the lawsuit, this was a violation of the Fair Credit Reporting Act. The complaint filed by her attorneys says that the Federal Trade Commission warned car dealers in 1998 not to pull consumers’ credit reports unless there is a “legitimate business need for the information in connection with a business transaction that is initiated by the consumer.”

The FTC noted that the Texas Automobile Dealers Association asked for an official opinion whether federal law “allows a dealer to obtain a consumer report on a person who ‘comes to an automobile dealership and requests information’ from a salesman about one or more automobiles.” The FTC replied: “In our view it does not, because a request for general information about products and prices offered does NOT involve a business transaction initiated by the consumer.” (FTC Advisory Letter to Coffey, 2-11-98. Emphasis added.)

Bottom line: Especially now, you’re smart to shop around for credit before you set foot on a car dealer’s lot, and to be wary of enticing deals that sound too good to be true.

Has a car dealer “shotgunned” your credit, without your permission? If so, we would like to hear from you. Here’s where to contact CARS: http://carconsumers.org/feedback.php

Thank you! Your stories help raise awareness and help prevent predatory auto lending practices that harm even the most savvy consumers and their families.

PocketSense: “Is a Credit Score Affected by Car Dealer Searches?”

Credit Karma’s Advice “The Best Place to Get a Car Loan”

Are car dealers exposing people to coronavirus?

Posted on March 23, 2020 by admin

Many car dealers engage in reckless practices that put lives at risk. Like selling new or used vehicles without bothering to get the FREE safety recall defects fixed first. Tragically, some people have been seriously injured or killed by car dealers who sold them cars, trucks, or SUVs with deadly defects.

So it’s only reasonable to ask: Are auto dealers also exposing car buyers and their families to the coronavirus? Some car dealers are attempting to reassure prospective car buyers, who are understandably concerned about the coronavirus pandemic, not to worry. For example, AutoNation claims on Twitter that it ” can service and then sanitize your vehicle with Clorox® Total 360®.” The use of the term “sanitize” implies that there’s nothing to worry about.

But how can anyone trust AutoNation, when their then-CEO told the whole world — right after Pres. Trump was elected — they were going to rev up their sales of seriously defective recalled used cars? Especially vehicles where there are no replacement parts available, so if you buy one of their “cream puffs,” there’s no way you can get it fixed, for weeks or months. Meanwhile, you are left to ride around in a potential deathtrap.

Last fall, Researchers found that more than 1 in 9 vehicles AutoNation was offering for sale at various stores across the nation had at least one unrepaired safety recall defect. Like faulty brakes, catching on fire, loss of steering, accelerator pedals that stick, stalling in traffic, hoods that fly up and obscure the driver’s vision, and many vehicles with ticking time bomb Takata airbags that explode like having a hand grenade go off in your car, causing devastating injuries such as blindness or bleeding to death.

If a huge car dealership chain that rakes in billions of dollars a year, is a Fortune 500 company, and touts Bill Gates as its biggest investor, will stoop to deliberately selling vehicles that grossly defective and unsafe, can you trust them to protect you from an unseen threat like coronavirus? Do you want to bet your life on it?

Too Risky: Buying A Car from a Dealer can Ruin Your Life

Posted on February 17, 2020 by admin

The car dealership looks like a gleaming palace. But what is really happening inside?

Some car dealers sell vehicles they don’t own. They also fail to pay off the loans on vehicles that are traded in. They ruin their customers credit and sometimes also their lives.

Robert Anglen, consumer reporter for the Arizona Republic, investigated dealerships in Arizona that ripped off consumers in multiple states, leaving them with faulty vehicles and stuck trying to make loan payments on two cars — even ones they had traded in, that were sold to someone else. Here’s what he found:

How can you avoid become a victim of an unscrupulous auto dealer? CARS tips for how to get a good deal on a safe, reliable used car, without having to set foot on a car dealer’s lot: How to Buy a Used Car, Painlessly.

Truck from CarMax catches fire, nearly destroys home

Posted on May 29, 2019 by admin

Californian Anthony Santos’ house nearly burned down, after CarMax sold him an unrepaired, recalled, defective Ford F-150 truck that was prone to catching on fire. Before CarMax sold him the truck, Ford issued a safety recall, warning that the truck could short-circuit and cause a fire. But CarMax failed to take the truck to a Ford dealer for a free repair.

Making matters worse, CarMax also advertised that the truck passed its “125 point inspection.” But what good is an “inspection” that doesn’t catch safety recalls and get them fixed?

Mr. Santos hired a law firm to pursue justice against CarMax, under California state laws against fraud and other bad practices, aimed at protecting consumers from unscrupulous car dealers and other crooks. CarMax is evading responsibility and trying to foist off the blame on him.

Please help spread the word: Beware of CarMax. They sell dangerous cars and if the worst happens, they try to shift the blame onto you.

Watch NBC Los Angeles news report about Mr. Santos and his flaming truck from CarMax.

It IS against the law for car dealers to sell used cars with unrepaired safety recalls

Posted on March 4, 2019 by admin

Contrary to the spin from unscrupulous car dealers, and erroneous reports in the news, it is illegal for car dealers to sell dangerous used cars with unrepaired safety recalls. Injured or misled consumers and their surviving family members who sue dealers that engage in such reckless practices usually win confidential settlements. The dealers insist on confidentiality to cover up their illegal activity.The legal settlements also are a telltale sign that the dealers know perfectly well what they are doing is illegal.

So if you discover that a crooked car dealer sold you an unrepaired recalled used car, you should get expert legal advice and fight back.

Here’s the scoop: There is a FEDERAL law against car dealers selling recalled NEW cars. There is a FEDERAL law against car dealers with fleets of 35 or more rental cars from renting, selling, or loaning recalled rental cars. But — while there is no FEDERAL law against car dealers selling recalled USED cars, if they do, they risk being held accountable under various STATE laws.

No less an authority than the U.S. Federal Trade Commission has noted:

“…state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars.”

An attorney who advises auto dealers has also warned them that if they sell used recalled cars, they face serious sanctions under state laws. According to a report in Automotive News:

“There are theories of liability that plaintiff attorneys may attempt to attach to these vehicles, even if dealers are using good-faith efforts to identify potential open recalls,” says Shawn Mercer, a partner at Bass Sox Mercer, a Tallahassee, Fla., law firm that specializes in dealership franchise law. There is no federal law against selling a vehicle with an open recall. But “depending on the jurisdiction,” Mercer says, “potential liability can stem from violations of state laws or common law tort claims.” (Emphasis added)

The article also cautions car dealers:

“Selling a vehicle with an undisclosed safety problem makes for dissatisfied customers and can have legal repercussions, even if the dealership was unaware of the recall.” (Emphasis added)

One legal case that stands out, making the point that state law prohibits dealers and other businesses from failing to exercise due care, or acting with negligence, is Houck vs. Enterprise. Sisters Raechel and Jacqueline Houck were ages 20 and 24 when they visited their parents in Ojai, California. On their way back home to Santa Cruz, they were killed by an unrepaired recalled rental car — a Chrysler PT Cruiser that caught on fire, and also lost steering. They ended up colliding with an 18-wheeler semi-trailer truck.

Their parents sued Chrysler and Enterprise under state laws, for failing to exercise the common law duty of care, and for negligence, resulting in wrongful death. Eventually, on the eve of trial, Enterprise admitted 100% liability — under state laws. A jury awarded the Houcks $15 million in compensatory damages.

Years later, the President of the California New Car Dealers Association made the false claim that it wasn’t illegal for dealers to sell unrepaired recalled used cars. The Houcks’ attorneys wrote a scathing letter pointing out that violating state civil laws is illegal. The attorneys cited the unanimous jury decision in the Houcks’ favor, and also cited state laws against negligence and common law torts.

CARS worked closely with Cally Houck, Raechel and Jacqueline’s mother, to get a new federal law enacted to prohibit rental car companies or car dealers from renting, loaning, or selling unrepaired recalled cars. The battle lasted for years, with auto manufacturers and dealers actively opposing the bill, even after the rental car industry had dropped its opposition. But eventually we won.

That victory means that not only do rental car companies remain liable under state laws, but they also face enforcement by the National Highway Traffic Safety Administration (NHTSA), the nation’s premier auto safety agency.

Thanks to the passage of the Raechel and Jacqueline Houck Safe Rental Car Act, NHTSA now has the authority to issue fines or take other action if a rental car company with a fleet of 35 or more vehicles violates the law — even if no one is injured or killed as a result. Thus, the federal law works to help prevent more tragedies from happening.

CARS supports the ongoing efforts of Senators Blumenthal and Markey, and U.S. Representative Jan Schakowsky, to enact federal legislation to make it a violation of federal law, enforceable by NHTSA, for car dealers to sell unrepaired recalled used cars.

Meanwhile, victims of crooked dealers who play “recalled used car roulette” with their customers’ lives, should get legal advice and fight back, using existing state laws. It’s also important for state attorneys general to enforce the existing state laws against fraud, violations of express and implied warranties, and other provisions of law.

CARS applauds the District Attorney in Sedgwick County Kansas — one of the few law enforcement officials in the nation who is standing up to the powerful car dealer lobby in order to protect car buyers and others who share the roads.

Read More: The Wichita Eagle: Wichita car lot hit with $140,000 fine over business practices

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Category Archives: Safety recalls