BUSINESS & ECONOMY

Would a new bill harm or help consumers buying used cars?

BY Brenda Flanagan, Senior Correspondent |

Trinity Wixner paid $15,000 down for a used Dodge Challenger last summer only to discover months later it was on a federal recall list because its alternator could fail and catch fire. The car sits, parked in the street — an undriveable lemon.

“I was very frustrated because I put so much money down and there was nothing I could do,” she said. “If something happened, I would’ve been liable. And God forbid I took somebody’s life.”

Federal law bans the sale of new recalled vehicles, but New Jersey dealers can sell recalled used cars as long as they reveal material defects. Betting on the state’s strong consumer protection laws, Wixner hired a lawyer and sued the dealer that sold her the car — Lester Glenn in Toms River — claiming it failed to tell her the Challenger was recalled on June 9, the date listed on the federal recall website. She bought the car three weeks later on July 1.

“Our position is that the dealer knew, or should have known, of the recall prior to selling the vehicle to Trinity,” said her attorney, Michael Niznik.

But the dealer’s Carfax showed no recall as of May 30, and Chrysler didn’t officially launch the recall until Aug. 24 — several weeks after Lester Glenn sold Tiffany the car.

“We do not believe the lawsuit has any merit,” the dealership said.

The Wixner case underscores how complicated recalls can get, and now there’s legislation pending in Trenton. It’s a controversial bill promoted by car dealers that consumer watchdogs warn could weaken legal protections for people buying used cars and shield dealers from liability.

“It simply passes the buck and makes the possibility for an accident or deaths to occur,” said Beverly Brown Ruggia, financial justice organizer with New Jersey Citizen Action.

The group opposes the bill, which would require dealers to inform potential buyers of recall data on used cars and not sell any vehicles with defects making them too dangerous to drive. That’s already pretty much covered by New Jersey’s Lemon Law, anyway.

What alarms advocates is that the bill also relieves dealers of any legal duty “related to the accuracy, errors, or omissions of the National Highway Traffic Safety Administration website,” or to provide “any recall information that may be added to the NHTSA website after the dealer prints a copy of the recall information” and gives it to the buyer.

“This is a workaround, this is a way for them to say, ‘We don’t have any responsibility here. We gave her a printout,'” said Ruggia. “The dealer’s under no obligation to update the information they gave you originally. Therefore, you think you’re walking away with a safe car, but in fact you’re walking away with a car that needs to be repaired.”

“No, it’s clarifying New Jersey’s consumer law, which I think is strengthening it,” said Jim Appleton of New Jersey’s Coalition of Automotive Retailers.

Appleton says the bill creates a paper trail and shows the dealer checked the recall website.

“It doesn’t allow a dealer who makes a mistake to escape consumer fraud liability,” he said. “It gives a dealer the way to prove that they did the right thing by their customer. This is good for everybody.”

The bill’s already cleared New Jersey’s Senate and it’s pending in the Assembly, where it’s sponsored by Majority Leader Lou Greenwald. Similar measures have failed in several states, including New York. It also failed three years ago in New Jersey, where Carfax estimates 1.4 million vehicles on the road today still have unfixed recall issues. Dealers say the responsibility to fix them remains with the automaker, but advocates claim dealers shouldn’t be allowed to sell any cars with open recalls.