More than one in every four vehicles being sold by used car giant CarMax are under recall for safety flaws, including some with potentially deadly defects, according to a survey by auto safety groups.
The safety groups, which are waging a court battle to revamp used car sales practices, say the survey underscores the need for reforms. As FairWarning has reported, there is no federal prohibition against selling used vehicles subject to recalls as long as the customer is informed about the recall. In fact, some used car dealers around the U.S. are marketing such vehicles as “safe” or “certified.”
In a report released today, the Center for Auto Safety and two other groups said 27 percent of the nearly 1,700 vehicles identified recently at eight CarMax locations in California, Connecticut and Massachusetts had unrepaired defects targeted by recalls. That was more than double the percentage found in a 2015 analysis by the safety advocates.
At least 45 of the vehicles in the survey had Takata air bags that are under recall. Some of the company’s products have been linked to deadly crashes in which air bag inflators exploded. Other vehicles at CarMax were found to have recalled General Motors ignition switches. Such switches have been linked to fatal crashes involving engines that suddenly shut off.
“As the Federal Trade Commission has said, all safety recalls pose safety risks and, left unrepaired, might lead to accidents,” said Jason Levine, executive director of the Center for Auto Safety. “These safety risks are why we will continue our fight in court to stop these types of deceptive advertising practices from being condoned.”
In response, CarMax, the nation’s No. 1 retailer of used cars, said it “has led the industry in recall transparency” and that “our experience shows us customers are in the best position to act on recall information directly with a manufacturer-authorized dealer. “ Richmond, Va.-based CarMax sells about 1 million cars a year in the U.S.
The FTC, in those settlements with General Motors, CarMax and others, agreed that used cars could be marketed as “safe” or “certified” even if they had defective air bags, ignition switches or other potential deadly defects. The dealers, however, were required to disclose that the vehicle might be subject to a pending safety recall.
The Center for Auto Safety and its allies have contended that the practice “is extremely detrimental to consumers who buy used cars—particularly poor, unsophisticated, and non-English speaking consumers.”
The FTC has since asked a federal judge to dismiss the suit and the advocacy groups, which also include Consumers for Auto Reliability and Safety and the U.S. Public Interest Research Group, Inc., are due to file their reply in October.
The FTC has argued that the consumer groups have no standing to take the matter to court, and that the agency’s decision on the consent order is not subject to such review. Moreover, the government has contended that, if the FTC order were vacated, used car dealers could represent their vehicles as safe or rigorously inspected “without clearly disclosing open recalls.”
Auto manufacturers have long been forbidden from selling new cars with open safety recalls. Last year, a federal law was enacted banning car rental agencies from offering vehicles with unrepaired recalls.
There are no such federal restrictions in the used car market, although safety advocates say all 50 states have laws that might provide some degree of consumer protection, and they called on state attorneys general to take action. As potentially deadly defects mount, so have activists’ concerns about the potential for abuse.
The high-profile Takata air bag recall accounts for more than 28 million of about 60 million active vehicles nationwide with open recalls. By the end of 2019, NHTSA estimates, the recall will be expanded to include an additional 35 million to 40 million air bag inflators.