Last December the U.S. Federal Trade Commission (FTC) issued a ruling that allowed to car companies and auto dealers to continue selling vehicles as safe or certified that had been recalled but never repaired. The sellers were required, however, to disclose that the repairs had not been made.
The FTC ruling has been appealed by consumer watchdog and public interest research groups, but no decision has been announced. Meanwhile, according to a new report, CarMax Inc. (NYSE: KMX) continues to sell vehicles with open recalls that have not been repaired.
The report from Consumers for Auto Reliability and Safety Foundation (CARS), MASSPIRG Education Fund, and the Center for Auto Safety (CAS) found that of nearly 1,700 CarMax vehicles surveyed in eight states, more than one in four (27%) have unrepaired safety recalls.
CARS Foundation president Rosemary Shahan said:
CarMax is selling huge numbers of unsafe, defective recalled cars that are ticking automotive time bombs. They pose a serious threat to the safety of all American motorists and their families.
Other survey results include:
- At each of the 8 CarMax locations surveyed, at least 20% of vehicles CarMax advertised for sale had at least one unrepaired defect subject to a safety recall.
- At two locations in Massachusetts and one in Connecticut, more than 30% of vehicles CarMax offered for sale had at least one unrepaired safety recall defect.
- On average, the percentage of vehicles with unrepaired safety recalls CarMax offered for sale has more than doubled, jumping from 12% to 27%, compared to survey results from 2015, which covered five of the eight locations newly surveyed.
- No recall repairs were available for 43 vehicles offered for sale, so consumers who purchase them are stuck driving unsafe cars for an indefinite period before they can get the cars repaired.
- The survey found 86 vehicles that had more than one unrepaired safety recall; 19 vehicles had 3 or more unrepaired safety recalls. One GMC Sierra Light Duty Pickup Truck had 6 unrepaired safety recalls.
Federal law requires automakers — not dealers — to perform open recall repairs at no charge for vehicle owners and auto dealers.