New cars under open recall can't be sold, but there's no law about used ones.
For people in the market for a used car, the “certified pre-owned” designation has long been the gold standard, an indication that a qualified mechanic has vouched for the car and that a buyer can expect a vehicle that is — hopefully — almost as good as new.
But the Takata air bag recall, which is the biggest in history, has upended all of that. Now the certified designation — known in the auto trade as CPO — will no longer necessarily have the same meaning. For one thing, last month the Federal Trade Commission made it easier for cars to be billed as “certified,” even if they were under recall and hadn’t been fixed yet.
And just as significantly, Ford — with the FTC settlement for cover — told its dealers that they could sell recalled vehicles and certify them too, so long as they did not advertise them as “safe” and required buyers to sign forms acknowledging that they were aware of the problem.
Against this backdrop, one dealer in Florida has refused to sell recalled vehicles that he cannot get fixed, letting 100 or so pile up on a lot miles from his main showroom. He even sued a rival who he believes is selling recalled cars without disclosing that they have not been fixed yet.
How did the used car market get so confusing all of a sudden? For starters, the Takata air bag recall is unprecedented in its scope, with over 60 million air bags affected, but also in its complexity. Dealers can’t simply fix everything at once, because there are not enough replacement parts. As a result, the air bags most likely to cause harm are first in line for repair, and the lines for existing recalls and others to come may extend for at least a few more years.
Given that situation, the Federal Trade Commission told General Motors and two dealers in December that it was just fine to advertise used vehicles as certified even if their air bags were under recall and had not been fixed. Just disclose it, the agency said.
All the chaos, conflict and changing policies leave consumers in a frustrating position, trying to sort out who’s still selling cars that federal regulators have ordered to be fixed and just how much any seller is disclosing. While federal law prevents dealers from selling new cars with an open recall, no federal law forbids them from selling used ones that way, even if some state consumer protection laws might help an injured owner’s case.
In the complex used car ecosystem of trade-ins and with wholesalers and sellers of various sorts, this has created a number of challenges and a wide range of responses, including some prominent companies that have changed their policies 180 degrees.
Whatever policies they set, automakers have only so much control, given that people who work at dealerships occasionally go rogue. Moreover, dealers sometimes certify a car as clean and put it up for sale — and then it’s recalled right after that. If the dealer does not catch it and pull the car out of the sales inventory, it is violating the automaker’s rules (and could attract the attention of the FTC).
Then there’s the consumer in the middle of all this.
If you’re about to start shopping for a used car, begin at safercar.gov. There, you can look up cars — even the vehicle identification number of a specific car you’re considering — to see what recalls are in effect. A report from Carfax can help you figure out whether a recalled car has been fixed.
But don’t stop there. Ask the dealer about any open recalls, as well as any proof they might have that they have gotten the recall fixed. Trust, but verify. Worried about a car that you already have? You should be, both about future Takata recalls and others that we don’t know about yet. Rosemary Shahan of the Consumers for Auto Reliability and Safety suggests registering your vehicle both with your car’s manufacturer and the National Highway Traffic Safety Administration so that you get a notice if your air bag or anything else comes up for recall. Run the vehicle identification number through some checks yourself from time to time too, just to make sure you’re not missing anything.