According to existing statutory or regulatory law, it is illegal for car dealers to sell unrepaired, recalled cars. New cars, that is. New cars which have been recalled must be repaired before the car may be sold. But there's no similar regulation governing the sale of a used car that has been recalled but hasn’t been repaired. So, in other words, no specific regulation prevents a used car dealer who may be less than principled from placing on his lot for sale recalled cars that have cars that have safety issues which have not been repaired, and no specific regulation obligates the dealer to tell the buyer about the safety issues for which the car has been recalled. Of course, there remain the dealer’s common law tort and warranty duties (specific to each state), but these are generally applicable to all sellers and are not tailored specifically to the used car market.
Clarence Ditlow of the Center for Auto Safety in Washington, D.C., estimates that while 10 million cars are recalled a year, 2 million of those recalled cars may end up on used car lots, not necessarily repaired.
According to Mitch Lipka, a contributing journalist to Reuters.com, in an article which appeared December 29, 2011, many rental cars often end up in the mix of used cars on a lot. They may have been sold in fleets of used rental cars at car auctions all over the U.S., and purchased by used car dealers or wholesalers to re-sell. This has consumers of used rental fleet cars a little worried.
The National Highway Traffic Safety Administration (NHTSA) now provides another tool for car buyers or renters to learn whether their car is a recalled car or not, and that is their website, http://www.safecar.gov "that allows consumers to find all vehicles recalled by year and make. When you know what kind of car you'll be buying or renting, check the site. If it has been recalled, ask if the problem has been repaired; the dealer or rental agent should have access to specifics about the recall." If the consumer doesn’t receive a satisfactory answer, the consumer may check out a different vehicle.
There is legislation waiting in the wings, which was introduced in Congress by Senator Charles Schumer (D-NY) last fall, that has not yet moved forward, but would require rental cars be pulled from fleets when they are recalled, and not returned until the specified repairs are made.
The American Car Rental Association is fighting the passage of that legislation saying it agrees that as a matter of policy, cars should be repaired before they're rented out, but believes there should be an exception allowing rental cars determined to be safe to be used in the interim, since not all recalls are of equal import. This author, however, does not understand this latter point because all recalls are, by definition, at least a potential safety problem, or there would be no "safety recall". Thus, allowing, for example, the rental car company to determine what is safety related, and what is not, seems to be nothing but a back door way of defeating the proposed legislation. It seems as if the rental car companies could and should make these repairs, or arrange to make them, since nearly all recalled vehicles are repaired at no expense to the owner. Furthermore, taking a car "off line" for a day, or a portion of a day, or two should not dampen profits. The cars end up sitting for days at a time anyway, in the normal course of operation. Ultimately, however, the issue boils down, again, to profits over safety, to-wit: which is more important?