At a New York auction, vehicles with fatal flaws
LAST Tuesday, two reporters from the New York Times visited a car auction held in Queens by the New York City Department of Finance.
It was a lesson in how consumers can purchase cars that have deadly defects and how sellers have few obligations to disclose them.
The department was auctioning 20 cars, which had probably been abandoned or towed, to a group of about 50 bidders. The vehicles were in various states of disrepair and no one had even bothered to remove trash from the interiors.
The list of vehicles, along with their vehicle identification numbers, was posted on the department’s website before the auction. It took the reporters less than a half-hour to run all 20 cars through a federal database of safety defects. It showed that half of the cars had been recalled for various reasons, including faulty ignition switches and Takata airbags, which between them have killed or injured hundreds of people worldwide.
The vehicles’ inclusion in the database denoted that the recall problems had not been fixed.
The auctioneer at the sale made clear that all of the cars would be sold as-is, even if they had been recalled. Buyers had to pay in cash, he said, and all sales were final.
“There’s no buyer’s remorse,” the auctioneer, Dennis Alestra, announced. The warnings are reinforced on the Finance Department website, which says that “Purchasers have no legal recourse against the city.”
But as the first cars were auctioned, there was no mention of the specific safety defects.
Three of the cars had the faulty airbags, which have led to the largest automotive recall in US history. An additional three cars, made by General Motors, had an ignition switch that could suddenly cut off a vehicle’s power, a defect that has killed more than 100 people.
The cars up for auction sat in a sea of defeated-looking vehicles in an outdoor lot, where potential buyers milled around to conduct cursory inspections. A car alarm went off more than once, but it was hard to tell from where.
A man in a New York Yankees sweatshirt asked the New York Times to leave because Mr Z Towing, where the auction was held, was private property. The reporters then observed the proceedings on the nearby sidewalk through a fence.
Bidding started low and some cars sold for just a few hundred dollars.
“When you bid on the car, you don’t know anything about the car,” said one of the bidders, Juan Carlos, a retired mechanical engineer. “Maybe there’s a few parts missing. You just don’t know.”
Auctions like this – fast-paced, cash-only, as-is – tend to dispose of cars that have seen better days. Sometimes, the buyers are licensed dealers who plan to flip the vehicles quickly. Other times they are sold for parts.
But too often, consumer attorneys and safety advocates say, they are sold to low-income consumers who can afford to spend only a few hundred dollars on a car, and need one badly enough that they will take a risk.
And unlike new cars, there is no federal requirement that sellers of used cars disclose safety recalls or fix dangerous defects, although a patchwork of state and local regulations offers consumers some protections.
But enforcing those protections can be tricky, and sometimes happens only after someone has been harmed, requiring lawsuits for wrongful death or negligence.
That is why safety advocates like Rosemary Shahan, the president of the nonprofit Consumers for Auto Reliability and Safety, have been pushing for laws that specifically ban the sale of recalled vehicles in which repairs have not been made.
“It’s illegal for a dealer to knowingly or negligently sell an unsafe car,” Shahan said. “It’s a question of, how many layers of enforcement can you add?”
The US National Independent Automobile Dealers Association, a trade group whose members include used car dealers, advises companies to fix recalled vehicles when possible and to disclose defects, according to Shaun Petersen, a vice president for legal and government affairs.
But Petersen pointed out that there was no “clear-cut” statute specifically prohibiting the sale of recalled cars.
The New York City Department of Finance, along with many other sellers of used vehicles, says that it is up to consumers to ensure that what they are buying is safe. That makes the used-car industry fairly unique in the way it handles recalls. Retailers of food and consumer products, for example, typically rush to remove items from their shelves once they have been deemed defective.
In a statement, Sonia Alleyne, a spokeswoman for the department, said protecting consumers was a “priority” and that the agency was “open to working with state lawmakers to improve” the auction process.
“State law and individual judicial orders require that the city auction off incurred property, whether it’s a car, a lawn mower, or a piece of jewellery,” Alleyne said. “This requirement makes no exemption for inoperable or broken equipment, including recalled cars.”
Safety experts say that more can be done to protect consumers, like clearly disclosing recalls and fixing defects before cars are sold.
And while the online database of recalls is not perfect, safety advocates say that sellers of recalled cars have no good excuse not to use it.
Dealers are required to repair recalled vehicles for free, even after a car has been sold multiple times. That applies to drivers who own, say, a 2001 Honda Civic – the same model car that was involved in the death of 50-year-old Delia Robles when she collided with a pickup truck last month.