Pub. 14 2015-2016 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 7 new jersey auto retailer W W W . N J C A R . O R G NADA Director’s MESSAGE | BY MARCY H. MAGUIRE Imagine what would happen if dealers could only offer a fraction for their customers’ trade-ins, or could not even send the trade- in vehicle to auction. This could be a dark reality if the used car amendment introduced by Senator Richard Blumenthal (D-CT) is passed. It would ground all recalled vehicles at dealerships (no matter what the recall is for) until the recall is addressed. When a food recall is issued, the product under recall is immediately removed from retail shelves. This is not the way it works for a recall involving automobiles. When a particular vehicle is under open recall, that doesn’t necessarily mean it requires the drastic step of grounding the vehicle. While there are at least 46 million vehicles cur- rently under open recall, the truth is many recalls don’t require the vehicle being taken out of service. Furthermore, recall notices are often issued even though there is noth- ing an owner or dealer can do to resolve the problembecause of a lack of auto parts. And some recalls are due to minor causes, such as a printing error in the owner’s manual. The Blumenthal amendment, which was considered during debate of the highway bill (H.R. 22), proposes to ground all used vehicles sold at a dealership under open recall. The amendment would effectively slash t he t rade-i n va lue of some recalled vehicles wh i le r emov i ng ca r s f rom t he road need - lessly. This amendment would cripple the used car market, leav- ing consumers with diminished trade-in values or fewer options because cars would be grounded indefinitely until parts became available. This would be devastating for consumers, dealers and automakers. Proposa l s such a s t he Blument ha l amendment don’t differentiate between recalls involving a serious defect and those with a negligible impact on safety. Time and time again, they prove to be overly broad measures that do not require the drastic step of grounding cars. A recent survey of 2,100 vehicle recalls revealed that 80 percent of them do not come with any recommendation from the manufacturer or the National Highway Traffic Safety Administration to stop operating the vehicle. NADA is advocating for a better solution. A more viable approach would be to im- prove the recall process by differentiating between truly dangerous defects in which vehicles should be immediately taken off the road versus trivial issues where there is no harm to driver safety or the public good. Policies should be tailored to boost con- sumer recall response and completion rates. The average vehicle recall comple- tion rate is 75 percent. America’s dealers support a 100 percent completion rate and we urge NHTSA to improve the re- call process by designing a database that handles multiple VIN requests as a single inquiry. Used Car Amendment Would Devastate Value of Customer Trade-Ins