For years now, the various sectors at work in this industry have looked at the safety threat posed by used cars with open recalls and dismissed it as too big, too complex for any one party to resolve.
That may be true.
But it’s also too big for the industry to ignore — not only because consumer safety should be paramount in any business, but also because the used-vehicle market is more than twice the size of the new-vehicle market, where consumers are protected by federal law. And as our news pages reported this month, demand for affordable used vehicles is climbing, even for those with 100,000 miles or more on the odometer. More dealers are taking to the streets to stock their lots, shopping on Craigslist for older, cheaper vehicles that can be turned over, at a profit, to consumers on tight budgets.
The older a vehicle gets, and the more owners it passes through, the lower the recall repair rate tends to be, according to NHTSA.
It shouldn’t take a deadly safety crisis to remind the industry of this gaping hole in policy, but alas, it always does. The last burst of momentum to solve the used-car loophole came in late 2015 and early 2016, in the midst of the Takata airbag debacle and the aftermath of GM’s ignition-switch crisis. In Congress, Sen. Richard Blumenthal tried to advance blunt-force legislation that would have banned the sale of used cars with open recalls, but failed in the face of opposition from the National Automobile Dealers Association. AutoNation stepped up with a companywide policy against such sales but retreated as the costs of grounding inventory became too high.
And since then, despite an occasional push from NHTSA, the effort has been in the slow lane, waiting for the next crisis to erupt.
Let’s not wait for that. The crisis is here now, and it’s not any one defect or part. It’s that 40 million used vehicles are sold to consumers each year — often passing through multiple parties on that journey — without a consistent nationwide, industrywide protocol to track them against recall databases and make sure they get fixed. NHTSA figures that some 53 million vehicles are on the road with unresolved safety recalls — and that number could soon swell as the agency probes more than 12 million vehicles with potentially defective airbag control units made by ZF-TRW.
The Consumer Federation of America has already outlined a useful road map to a solution.
It would involve equal measures of effort by lawmakers, manufacturers, dealers, NHTSA, state motor-vehicle agencies and regulators, insurers, fleet operators, ride-hailing services and auto auction houses, to go beyond one-off publicity campaigns and use every touch point at their disposal to publicize recalls, identify the owners and get the vehicles fixed.
To that list, we would add parts suppliers, which must resolve to provide replacement parts on an expedited basis to reduce repair wait times. And we’d also add the growing cadre of startup ventures and app developers that are pouncing on the used-car market in search of opportunity.
In a market of 40 million-plus vehicles, there will be more than enough money for all of them. But as the evolved, tech-savvy members of this ecosystem, they must also recognize their unique capacity and obligation to ensure that the fleet remains safe.
Want to be a disrupter? Disrupt this problem.
All of this will work only with a spirit of information-sharing and cooperation among government agencies; political backbone among legislators; good faith by automakers in effecting and announcing recalls; a proactive sense of accountability among dealers; a safety-first, consumer-first culture that pervades the manufacturing, retailing and service sectors; an infusion of Big Data insights; and modest incentives deployed strategically across the system. And it needs a credible leader: an agency, a company, an entrepreneur — someone to step up to the challenge and stand up for the consumer.
We’re encouraged by pilot programs such as Maryland’s effort to link recall notifications to vehicle registrations, and are eager to see how well they succeed in improving repair rates, which is the real goal.
But no one can do this alone, which is why we join the call for a broad-based, integrated effort by all stakeholders.
And until it’s fixed, no one should stop trying.
