Shaun Petersen, regulatory counsel for the National Independent Automobile Dealers Association (NIADA), told a committee of the New York City Council that the City's proposed ban on the sale of used cars with unrepaired recalls needs a little repair work itself.  

The City's proposal would make it illegal to sell a used vehicle with an open recall and would require used-car dealers not only to fix recalled vehicles before selling them, but also fix recalled vehicles they've already sold, but were not repaired.  

NIADA was invited to testify at an October 28 hearing held by the council's Committee on Consumer Affairs in New York, where Petersen, representing the Association, said the proposed law requires further study regarding its ramifications to both consumers and businesses before any action is taken. 



Petersen, a partner in the Ohio law firm of Mac Murray, Petersen & Shuster LLP and a former Ohio deputy attorney general, raised several issues with the proposal and its effect on independent used vehicle dealers. Among them:

Independent dealers have no control over the recall process and are not allowed to make recall repairs. Federal law requires manufacturers to repair recalled vehicles at no charge to the owner, and the manufacturers only allow their franchised dealer network – which does not include independent dealers – to make the repairs. In fact, when it comes to the recall process, independent dealers are in the same position as consumers. Like any other vehicle owner, they must be notified of a recall by the manufacturer and must have it repaired by a franchised dealer.

Not all recalls are safety recalls. Vehicles have been recalled for a misprint in the owner's manual or flaking paint. There is no reason to prevent the sale of a vehicle because of recalls that have no impact on the vehicle's safety or operation.

Many recalled vehicles do not have a fix readily available. It often takes a significant amount of time for manufacturers to determine the appropriate fix, and even longer to provide the technical specifications and parts for the vehicle to be repaired. Some recalls cannot be repaired for months. In some instances it has taken more than a year for a fix to become available. And often, manufacturers and NHTSA will publicly state that grounding a vehicle pending a repair is not necessary. That occurred recently with the GM recall over faulty ignition switches, which affected millions of vehicles.  

For these and other reasons, NIADA cannot support New York City's proposed legislation.  

That said, NIADA and its member dealers place a high priority on consumer safety and making sure the vehicles on America's highways are safe and dependable. As a best practice, NIADA encourages its dealers to only make representations about vehicles they know to be accurate, whether regarding the recall status of a vehicle, the vehicle's condition or anything else.  

In addition, as a matter of best practice, not legislative directive, NIADA encourages all independent dealers to take additional steps necessary to identify vehicles in their inventory that have open recalls and have those vehicles fixed, when fixes are available, before making them available for sale.