Consumer Groups Raise Alarm Over Car Safety in TN

CARS-708555002B

NEWS For immediate release: Tuesday December 19, 2017

 

Contact:

Rosemary Shahan, Consumers for Auto Reliability and Safety Foundation 530-759-9440

Jason Levine, Center for Auto Safety, 202-728-7700

Andy Spears, Tennessee Citizen Action, 615-815-4544

Steven Taterka, former Assistant Attorney General of Tennessee, 615-952-3661

Sean Kane, The Safety Institute, 508-252-2333

 

 

Consumer Groups Raise Alert:

Unprecedented New Attack

On Safety of Used Car Buyers Tennessee Opens Floodgates for  Deathtrap Cars

 

Auto safety / consumer organizations today raised alarms about an unprecedented new attack on the safety of used car buyers. On January 1, Tennessee will become the first, and only, state in the nation to ease restrictions against auto dealers who wish to profit from selling unrepaired recalled used cars to consumers at top dollar, without getting the safety recall repairs performed first.

 

Earlier this year, in the waning hours of the legislative session, legislators in Nashville caved in to auto dealers and quietly sneaked through legislation that has been rejected in every other state where it was introduced.

 

Similar legislation backed by auto dealers in other states, such as New Jersey, California, Maryland, and Virginia, were opposed by leading auto safety organizations and consumer groups, and defeated.

The groups warned about the new Tennessee law on a billboard located in a high-visibility area of Nashville, and through a new website, StopKillerCars.org.

“Tennessee’s new law makes it easier for crooked car dealers to get away with selling unsafe, defective recalled cars,” said Andy Spears, Executive Director of Tennessee Citizen Action.

 

“This horrible law weakens state legal protections that helped deter unscrupulous dealers from selling cars with lethal safety defects to consumers,” said Steven Taterka of Kingston Springs, TN, a former Assistant Attorney General of Tennessee who specializes in representing consumers in auto fraud cases against car dealers and auto manufacturers.

 

“Tragically, Tennessee’s new law is likely to result in more dealers in that state engaging in ‘recalled used car roulette,’” said Jason Levine, Executive Director of the Center for Auto Safety.

 

Statewide polling conducted December 14-15 in Tennessee by Public Policy Polling found that a whopping 89% of the state’s voters agreed that when there is a federal safety recall for a dangerous car, auto dealers should not be able to sell them until they have been fixed. The percentage is even higher – between 93-94%, when the defects are specified, such as catching on fire, steering loss, exploding airbags.  The public in Tennessee also resoundingly rejects the concept of allowing dealers to sell unsafe recalled used cars if they merely “disclose” the recall status.

 

Under federal law, it is illegal for auto dealers to sell new vehicles that the manufacturers have recalled due to safety defects. There is also a federal law that prohibits rental car companies with fleets of 35 or more rental vehicles from renting, loaning, or selling unrepaired recalled cars.  This law, the Raechel and Jacqueline Houck Safe Rental Car Act, applies to millions of used cars.

 

While there is no similar federal prohibition against dealers selling other recalled used cars, state laws in all 50 states have made it illegal for dealers to sell unsafe recalled used cars. For example, such practices may violate the dealer’s common law duty of care, or statutes against unfair and deceptive acts and practices, or express or implied warranties, or against negligence or wrongful death.

 

Dealers who sell unsafe vehicles face tough sanctions under various state laws in other states, including loss of their license to sell vehicles, or – if someone is injured or killed as a result – even fines and other criminal penalties.

 

Laws in all 50 states already make it illegal for dealers to sell unsafe recalled used cars. This law means that Tennessee car buyers and their passengers and families are losing protections that existed before, and continue to exist in the other 49 states.

 

“Unfortunately, Tennessee will become a dumping ground for unsafe recalled cars,” predicted Rosemary Shahan, President of Consumers for Auto Reliability and Safety, a non-profit auto safety organization which has been in the forefront in defeating similar dealer-backed bills in other states.

 

“The new law doesn’t even require dealers to disclose safety recalls, because it lets them use any database they wish – including private databases with big holes that fail to include many vehicles that are being recalled. If the car doesn’t show up in that database, they don’t have to disclose anything,” said Sean Kane, Founder and President of The Safety Institute.

 

The new law requires dealers to repair recalled used vehicles only if the safety recall notice the dealer chooses to check indicates that the manufacturer has issued a “do not drive” or “do not sell” warning. However, safety recall notices generally do not include such information. So any supposed safety benefits are a sham.

 

Furthermore, historically auto manufacturers have issued such warnings only regarding about 6% of recalled vehicles, usually when the vehicle is being launched as a new model and bad publicity about fatalities and injuries might hamper new car sales.  The National Highway Traffic Safety Administration lacks the authority to require manufacturers to issue “do not drive” warnings, no matter how dangerous the vehicles are.

 

Types of safety defects where the manufacturer did not issue a “do not drive” warning:

 

  • Catching on fire
  • Wheels that fall off
  • Exploding Takata airbags that spew shrapnel into the passenger compartment, causing blindness or
  • GM ignition switch defect that causes loss of power steering and braking, and airbag failures to inflate when needed in a crash
  • Faulty brakes
  • Sticking accelerator pedals

Links to related documents:

 

New Tennessee law to protect crooked car dealers, that takes effect January 1, 2018

 

Autocheck report for the Jeep that Sean Kane bought from CarMax, giving the Jeep a glowing report

 

“Disclosure” form CarMax handed Sean Kane to sign, after he had already signed a purchase contract buying a recalled Jeep. The form states that according to Autocheck there are “NO” recalls pending. But according to the National Highway Traffic Safety Administration, based on data Fiat Chrysler is required to provide to NHTSA and update at least every 7 days, there were 3 unrepaired recalls – catching on fire, bad brakes, and stalling in traffic.

 

Without laws like the new Tennessee law, dealers face potential legal liability

 under state laws or common law.

 

Automotive News:  “New software helps dealership track safety recalls better”

“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.”

 

Car dealers admit they want laws like Tennessee’s because they believe that allows them to evade legal liability when their victims are injured or killed.

 

Automotive News: “Honda pushes dealers for buyers’ signatures on airbag liability

 

“….Laurie McCants, managing partner of Honda of Covington in suburban New Orleans, says she believes the signed document helps protect dealers. “If there is a process and we follow the process, I don’t feel liable,” she says….Neither does Joe Wagner, operating partner of Winter Haven Honda in Florida. He says he is getting no pushback from consumers about signing the document.  ‘I believe it takes away the liability,’ he said about the document….” [Emphasis added.]

 

Automotive News: “Recall bill cruises, but will it help?”

 

“The California bill – which dealers see as a potential defense against lawsuits – would require used-car dealers and rental companies to notify their customers of any outstanding recalls, though they wouldn’t have to undertake any repairs… dealers have faced new liability risk since the creation of an internet database that allows a customer or a dealer to check for recalls by entering a vehicle identification number.”

 

Courier-Post in New Jersey: “Auto-related bills roll through Assembly”

 

“The safety recall disclosure bill has the backing of the New Jersey Independent Automobile Dealers Association, which believes it offers protection to the dealer, said Paula Frendel, the association’s executive director.”

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