Unsafe Used Cars for Sale

A report created by U.S. PIRG Education Fund, Frontier Group and Consumers for Auto Reliability and Safety Foundation
Written by Jonathan Sundby, Frontier Group; Adam Garber, U.S. PIRG Education Fund; and Rosemary Shahan, Consumers for Auto Reliability and Safety Foundation
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AutoNation, which bills itself as “America’s Largest Auto Retailer,” is selling recalled, used vehicles that contain dangerous safety defects. Those vehicles are potentially hazardous to the people who buy them, their passengers and everyone else on the road. Vehicles with defects subject to safety recalls — including malfunctioning Takata airbags and General Motors ignition switches – have been responsible for thousands of injuries and deaths.

All vehicle safety recalls should be taken seriously, and vehicles should be repaired before sale to consumers for use on the roads. Some victims have been killed within hours of when a dealer handed them the key to a defective car. Some dealerships had a significantly greater proportion of used vehicles under recall than others. At the Chrysler Jeep West (CO), nearly 1 in 5 used vehicles — including certified pre-owned vehicles — had unrepaired recalls. At the Honda Fremont (CA), Hyundai Denver (CO), Chrysler Dodge Jeep Ram and Fiat Johnson City (TN), and the Subaru Spokane Valley (WA) dealerships, more than 1 in 6 used vehicles contained an unrepaired safety recall.

AutoNation advertises that its used vehicles are “worry-free”

AutoNation claims on its website that “we take the risk out of buying a pre-owned vehicle,” and that “as an industry leader we hold ourselves to higher standards.” It also purports to “provide promises and processes you won’t find anywhere else,” and advertises its pre-owned vehicles as “worry-free.”

However, former AutoNation CEO Mike Jackson has admitted that vehicles with safety recalls are far from “worry-free.”

His statement references the promise that AutoNation made in 2015 not to sell used vehicles with unrepaired recalls. But this pledge lasted less than 18 months. On November 28, 2016, AutoNation walked back on its promise and began to market recalled vehicles.

Many recalled vehicles are at dealers with service shops capable of making repairs in-house

Most AutoNation dealerships are franchisees, which sell new cars that are affiliated with a specific manufacturer and have service shops that specialize in fixing that manufacturer’s vehicles. Since recalled vehicles typically must be returned to an authorized dealer for repairs, this should make it easier for those dealerships to make repairs to used, recalled vehicles of the same brand, as a service department capable of making the repairs often exists on-site. But, our survey found 62 used vehicles that were being sold by AutoNation dealerships of the same make as the vehicle under recall.

Some recalled used vehicles available at AutoNation had no remedy available

Of the vehicles surveyed, 47 (16 percent of recalled vehicles) had an unrepaired safety recall for which a remedy wasn’t available at the time of the analysis. Consumers who purchase such a vehicle may have to wait for months or longer before their unsafe, recalled vehicle can be repaired.

Dealers’ sales of used vehicles with unrepaired safety recalls may be illegal

All states prohibit licensed dealers, including those that sell used vehicles, from engaging in practices such as bait and switch, false advertising, unfair and deceptive acts and practices, fraud, violating express or implied warranties and the common law duty of care, negligence or causing wrongful death. AutoNation’s failure to repair recalled cars, despite promising that it is selling vehicles that are of high quality, may violate these provisions.

Recommendations

The U.S. District Court in Washington, D.C., should grant the relief requested by Consumers for Auto Reliability and Safety, U.S. PIRG and the Center for Auto Safety, and overturn the Federal Trade Commission’s consent orders that allow GM and the automotive dealership chains CarMax, Lithia, Koons, West-Herr and Asbury that allow them to advertise that unsafe vehicles with unrepaired safety recalls are “safe,” “subject to rigorous inspections,” “repaired for safety,” and “certified” as long as they merely disclose that the vehicles may have an open safety recall.

The Federal Trade Commission should prohibit AutoNation and other dealers from engaging in deceptive and unfair practices, such as advertising its used vehicles as “worry-free” and high-quality when they have unrepaired safety recalls.

State attorneys general should investigate AutoNation and other dealers who engage in such practices, and enforce existing state laws that prohibit them from selling unsafe, unrepaired recalled vehicles to the motoring public.

AutoNation should honor the commitment it made in 2015 and re-institute its former policy of not selling used cars with unrepaired recalls. Dealerships across the country should follow suit and implement policies that prevent the sale of used vehicles with unrepaired safety recalls.

For consumers:

1. As long as dealers continue to sell vehicles with unrepaired recalls, consumers should investigate any used vehicle they plan on purchasing to make sure that it does not contain unrepaired recalls. If the vehicle does have an unrepaired recall, consumers should refuse to buy it until it has been repaired by the seller at an authorized dealership.

2. If you recently purchased a used car, you should look up the Vehicle Identification Number (VIN) at www.safecar.gov. If there is an unrepaired recall, go to any of the manufacturer’s authorized dealerships to have it fixed.

3. If you own a vehicle that is subject to a safety recall, and the parts are not available to fix the safety defect in question, insist on getting a safe loaner or rental vehicle from the manufacturer.

4. Consumers or surviving family members harmed by dealers who sold unrepaired, recalled, used cars should consult an attorney in their state who specializes in representing consumers in auto warranty and auto fraud litigation.