Used Car Safety Recall Repair Act
This bill, the Used Car Safety Recall Repair Act, would prohibit auto dealers from selling, leasing, or loaning used motor vehicles to consumers if those vehicles have open recalls, until the recalled defects have been remedied. It creates a defined pathway for when a remedy is not yet available, requiring the manufacturer to reimburse the dealer for lost time value on such vehicles. The bill also sets criteria to determine who counts as a “dealer,” and includes several exceptions where a recall remedy is not required before sale. The measure would take effect one year after enactment. In short, the bill aims to protect consumers from purchasing used cars with unresolved safety recalls and shifts certain financial risk and timing requirements to manufacturers and dealers.
Key Points
- 1Prohibition on sales, leases, or loans: Dealers may not sell, lease, or loan a used motor vehicle with an open recall to a consumer until the defect or noncompliance has been remedied, with specific enumerated exceptions.
- 2Definition of used motor vehicle: A motor vehicle that has previously been purchased other than for resale.
- 3Exceptions to the sale prerequisite:
- 4- Recall information not available at the time of sale or not available on the manufacturer’s website.
- 5- An enforcement order related to the defect, where enforcement is temporarily set aside in a related civil action.
- 6- The vehicle is sold at wholesale.
- 7- The vehicle is junk (with required information reported to the NMVTIS system).
- 8Reimbursement if remedy is unavailable: If a dealer holds a used vehicle and the manufacturer has not made a remedy available by the stated date, the manufacturer must reimburse the dealer for the duration the vehicle is held, at a rate of not less than 1% of the vehicle’s fair market value (FMV) per month, prorated daily, up until remedy is available or the total payments equal the FMV.
- 9Cap on reimbursement: Total reimbursements for a single vehicle may not exceed the FMV of that vehicle.
- 10Dealer definition and restriction: A dealer is someone who, in the prior year, sold at least five motor vehicles to buyers who purchased for purposes other than resale. Generally, a dealer cannot sell, lease, or loan a used vehicle with an open recall until the recall remedy is completed, subject to the listed exceptions.
- 11Effective date: The Act takes effect one year after enactment.