The U.S. Department of Transportation is headlining a new national strategy aimed at significantly reducing crashes and injuries on all U.S. roadways. This comes as part of President Joe Biden's bipartisan 1 trillion dollar infrastructure bill passed in November 2022. Some question whether the broader “Build Back Better” has any chance of ever passing. But it's clear that vehicle safety is up front and center for the Biden Administration. U.S. traffic deaths were up 18% in the beginning half of 2021, compared to the first half of 2020, and the U.S. Government believes that a “bold paradigm shift” enacted by their action plan could bring roadway fatalities and injuries down to almost zero.

Department of Transportation Secretary Pete Buttigieg scrutinized the lack of vehicle safety. “We're going to count on technology and auto companies to work with us…”, Buttigieg declared at a department event last month. "But it's also clear that technology alone will not save us." 

And it appears that legislators and other vehicle safety advocates agree. Jason Levine, the previous head of the Center for Auto Safety (CAS), departed his role at the agency for a government position as director of the Office of Communications at the U.S. Consumer Product Safety Commission. At CAS, which was founded in 1970 by recall pioneer Ralph Nader, Levine railed against the auto industry for unsafe practices, including the sale of used cars with open recalls. His government appointment could not come at a more opportune time.

It's not just a coincidence that legislators are now focusing on the transportation and automotive industry. The new funding from the infrastructure bill is shifting the focus on recalls from prevention and education to action. In May 2021, US Senator Richard Blumenthal (D-CT) introduced S. 1835, a bill to prohibit the sale of used cars with an open recall. As the administration bolsters resources that can effectively lobby for increased safety guidelines, Blumenthal's bill looks to be gaining steam. Consumer groups are also onboard.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS), recently wrote to Automotive News, stating that the bill "would set an industrywide standard requiring all dealers to ensure that safety recall defects are repaired before the sale of used vehicles at retail, while allowing dealers to sell unprepared recalled vehicles at wholesale."

While similar legislative efforts have fallen short in the past, the current political climate and political weight of a Democratic Congress may set our industry on a course where recall compliance is no longer an option. Dealerships that proactively manage and repair recalls will not only meet these new laws but will also have a competitive edge over dealers that have largely ignored recalls on their pre-owned inventory.

All the indicators suggest that the days of selling used cars with open recalls are ending, at least for dealerships. It's always been a risky exercise for any dealer that wants to avoid potential liabilities but soon could also carry hefty NHTSA fines. A lot can happen and will need to happen before the storm clouds are overhead. What's important for dealers to know is that comprehensive recall management is available to all dealers. 

It begins with monitoring the new and pre-owned inventory on your lot and extends to vehicles that you may consider taking in at trade-in. This is especially critical for off-brand makes, where STOP SALE notices or the lack of a remedy/parts are not readily visible to dealers. The knowledge gap not only poses a risk for unsuspecting shoppers but could also be detrimental to the store’s financial health. Consumers are scanning VINs online and performing their own recall checks. If your team isn’t transparent about recalls, expect savvy customers to question your integrity.

Whatever legislative actions should come forth is not within your dealership’s immediate control. What is within a dealer’s grasp is the commitment to monitor its inventory regularly for dangerous recalls.