New York City Imposes Used Car Repair Rule

In an effort to prevent the sale of dangerous used cars, New York City is attacking dealers who sell vehicles recalled for safety defects without having them repaired.

The requirement aims to address what consumer advocates say is a glaring hole in the auto industry’s safety rules: used car dealers, as well as car rental companies, are not required repair vehicles with safety defects before returning the cars to public service.

The New York Times reported in May that legislation to address the issue has been stuck for years in Congress, blocked in part by dealers who say the law would cost businesses and consumers unnecessary time and expense.

The New York requirement is a stricter interpretation of a state law that requires all vehicles to be safe and roadworthy in order to be sold. Now city officials want dealers to understand that safety includes repairing cars that are being recalled.

“We believe very strongly that this is a matter of life and death in New York City,” said Julie Menin, commissioner of the city’s Department of Consumer Affairs.

Last week, city officials sent subpoenas to 200 dealerships asking how many used vehicles they had sold in the past year that had been recalled but not repaired, and whether consumers had been notified of the defects before. the sale. Some subpoenas were sent to companies selected at random. Others have visited dealerships with a history of selling defective cars, according to the Consumer Affairs Department. The faults may not have been related to recalls, but have sparked complaints of faulty tires, brakes and other safety issues, the agency said.

Companies that have sold used cars that have not been repaired will be required to notify the owners of the vehicles of the defect and to carry out the necessary repairs. The ministry is ready to report violations to offending companies and, if necessary, revoke their operating licenses.

Used car dealers, like consumers, can take the recalled vehicles to franchise dealers for free repairs, according to emailed statements from Chrysler, Ford, General Motors, Honda, Hyundai, Nissan, Toyota and Volkswagen.

But bringing a vehicle to a dealership takes time and manpower, and would most likely delay the sale of a recalled vehicle.

Mark Schienberg, President of the Greater New York Automobile Dealers Association, which represents about 125 dealerships in the five boroughs, said prompt repair of recalled vehicles is “an important conversation to have” and “a significant safety concern.” Mr Schienberg said he believes most of its members – who have new car franchises – are already dealing with recall repairs on used vehicles.

Potamkin, a General Motors dealer in New York City, has a written policy requiring its employees to repair recalled vehicles before selling them to the public, according to John Bruno Jr., general sales manager at a Potamkin location.

Credit…Michael Appleton for The New York Times

“If there are any open recalls, we take care of them as quickly as possible,” Bruno said, adding that it was “illegal and irresponsible” to do otherwise.

Still, the concern of the Department of Consumer Affairs is that many used car dealerships are not responding to recalls.

“It’s a big burden,” said Fred Donnelly, president of the New York Independent Automobile Dealers Association and owner of Hunts Point Auto, a used car dealership in the Bronx. “When do we stop keeping the consumer? “

It would make more sense to tell the consumer that repairs are needed and ask the buyer to take the vehicle to a new car dealership for a free repair, Donnelly said in a telephone interview. Getting a used car dealership to take a car for a recall repair means a waste of time and money that will drive up prices and make vehicles in town less competitive, he said.

“I think the laws in New York are pretty tough on auto dealers,” Donnelly added. Instead of requiring repairs to the recall, he said, the city should focus on “the illegal sale of cars to consumers. Cars all over the streets, all over Craigslist, and nothing seems to have been done about it. “

General Motors is in the throes of a crisis over its prolonged failure to repair faulty ignition switches in older cars, a defect that GM has linked to at least 13 deaths. Already, automakers have recalled a record 37.5 million vehicles this year in the United States, including about 25.5 million General Motors, city officials said.

Such problems recently affected Honda, which since 2008 has recalled 8.9 million vehicles worldwide for faulty airbags. On Tuesday, the automaker confirmed that it wants consumers buying recalled cars that have not yet been repaired to sign statements acknowledging they could be “injured or killed” by air bags in an accident.

Honda spokesperson Chris Martin said the company wanted consumers to know cars should be serviced when parts were available, but that they could still purchase vehicles without signing the statement.

However, such sales will be banned in New York City under the Consumer Department’s more aggressive recall position, with or without a signed risk acknowledgment.

The city is relying on its subpoenas, as well as a press release, to publicize the policy change. It does not intend to communicate anything directly to the 800 or so dealers it is laying off.

This could meet the requirement to alert dealers to the problem, said Gillian E. Metzger, professor of administrative law at Columbia Law School.

“Then it’s just a question of whether their statutory interpretation will hold up or not,” Ms. Metzger said, referring to the city’s position, which is stricter than current state law. “A court would consider whether or not this is an acceptable interpretation.

Ms. Menin, the consumer commissioner, says the city is on solid ground. “There is no legal defense for the industry to make,” she said.

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Sylvia F. Hernandez

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