Consumer Fraud

Safety recall repairs often not made in resold and leased vehicles, GAO warns

The National Highway Traffic Safety Administration has the authority to prompt automotive recalls, but it lacks the ability to ensure that potentially dangerous safety defects are fixed before motor vehicles are sold to unsuspecting customers. Now the Government Accountability Office (GAO) is calling for the agency to take a more active role in helping prevent potentially dangerous recalled vehicles from being sold before they are repaired.

A year-long study conducted by the GAO was prompted by NHTSA’s handling of Toyota’s sudden unintended acceleration issues, widely criticized by legislators and safety experts as being slow to respond and ineffective in dealing with the potentially deadly safety flaws.

Since 2009, Toyota has recalled about 8.5 million cars, trucks, and SUVs for safety defects that can cause the vehicles to lurch forward suddenly or accelerate uncontrollably without warning. Although such sudden unintended acceleration problems have been reported by Toyota and Lexus drivers for many years, it wasn’t until October 2009 that Toyota announced the first of its sudden-acceleration recalls. Toyota expanded the sudden-acceleration recall two more times in 2010 to include nearly two dozen models, some of which date back to the 2005 model year.

Toyota’s massive safety recalls have underscored the fact that many recalled vehicles slip through the cracks when they are sold or leased before the proper repairs are made.

“With over 35 million used cars sold by used and franchised dealerships in the United States in 2009 alone, this could pose a significant risk to the safety of millions of vehicle drivers and may have a negative impact on recall completion rates,” the GAO said in its report. “Many consumers may be unknowingly putting their lives at risk by purchasing a defective vehicle.”

To remedy the problem, the GAO recommended that NHTSA “seek legislative authority to ensure that potential buyers of used cars are notified of any outstanding recalls prior to sale.”

“NHTSA could do more to monitor the completion rates of recall campaigns and encourage vehicle owners to remedy their vehicles, which could result in removing more unsafe cars from the road,” the GAO said in its report.

The GAO report also noted that rental car agencies aren’t required to repair recalled vehicles before leasing them to consumers. The agency listened to rental car company executives who suggested creating “clear national standards” for categorizing the nature and severity of the defect (including the potential for harm), but NHTSA officials rejected the idea. “Suggesting that some defects are more risky may have dangerous consequences — namely, that many safety defects, all of which involve an unreasonable risk, will be ignored,” the agency said in a statement.

The GAO also suggested NHTSA establish a centralized VIN database to help track recall repairs – something the agency is already working on but lacks the funding to fully implement, and require automakers to write recall notices in clear, simple English that effectively communicate the dangers of the safety defect.