A review of eight CarMax Inc. locations by safety advocates found more than one in four vehicles reviewed had unrepaired safety recalls, including some with air bag inflators linked to deadly malfunctions.
A total of 461 vehicles contained at least one outstanding safety recall that had not been repaired, 41 of which had recalls for which no repair was available, the review by safety advocates found. The study looked at the recall status of about 1,700 used autos listed for sale at eight CarMax dealerships in three U.S. states.
Of those, 45 vehicles contained air bag inflators made by Takata Corp., the company behind the largest auto recall in history, that were subject to recall but had not yet been repaired.
The defects include fire risks and other hazards that have been linked to deaths and injuries, said Rosemary Shahan, president of Consumers for Auto Reliability and Safety Foundation, one of the groups that did the study. The Center for Auto Safety and the MASSPIRG Education Fund, an advocacy group, also were part of the research.
"Yet they continue to sell these to the public and they market them in a very deceptive way," Shahan said. "We are demanding that state law enforcement officials crack down on CarMax and other dealers who are engaging in these practices."
Selling used cars with unrepaired safety recalls, while not prohibited under federal law, is condemned by auto safety and consumer advocates who say it puts unsuspecting drivers at risk. The practice has also drawn fire from Democrats in Congress who have tried to ban the practice. It's illegal to sell new cars with safety recalls that have not been remedied.
Yet only franchised new-car dealers can complete recall repairs. Independent dealerships such as CarMax cannot.
CarMax said in a statement Thursday that each vehicle listing on its website includes a link to search for open recalls affecting that vehicle. Employees review vehicle recall information with customers and customers sign a form acknowledging they've received NHTSA recall information prior to signing sales paperwork, according to the company.
"We are dedicated to making sure our customers know about open recalls prior to purchase," CarMax Chief Operating Officer Cliff Wood said in a statement. "Nothing is more important than being transparent and honest with our customers."
Disclosing recall status to consumers is not good enough, said Jason Levine, executive director of the Center for Auto Safety. He cited a pickup truck listed by CarMax that the survey found with six unrepaired safety recalls presenting risks including engine fire and airbag failure.
"This is the sort of situation that disclosure does not fix," Levine said in a call with reporters.
Some officials have tried to crack down on the practice where they can. More than 100 auto dealers operating in New York state settled with New York Attorney General Eric Schneiderman's office in April after a probe found hundreds of used autos had been sold with unrepaired safety recalls to customers. The dealers agreed to disclose open recalls to future customers and pay a $1,000 fine.
The Federal Trade Commission last year reached settlements with General Motors and two auto dealers over claims that they sold used vehicles with open recalls while also advertising thorough vehicle inspections.
Congressional Democrats have also tried ban the practice but failed in the face of aggressive lobbying by auto dealers, who argue the prohibition would unfairly raise dealership costs and hurt used car values.
According to the study, the groups found an average of about 27 percent of the vehicles in stock across the eight locations had least one unfixed safety recall, more than twice the rate found in a similar study of five CarMax locations in 2015.
The study authors reviewed vehicle inventory listed online by CarMax at the locations, and queried each vehicle's recall status using the National Highway Traffic Safety Administration's online recall search tool. The survey was conducted Aug. 31 through Sept. 6.
Takata air bag inflators have been linked to more than 100 injuries and at least 18 deaths worldwide for the risk of exploding in a crash. Some 100 million vehicles globally may eventually be recalled for the defective parts. Mounting liabilities from the callbacks pushed Takata to file for bankruptcy in June.
- (c) 2017, Bloomberg