Auto auctions differ in policy on sales of recalled vehicles
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There is no consistent industrywide policy on how auto auction companies handle the sale of vehicles that have been recalled but not yet repaired, based on their responses to a recent controversy and legislation introduced in the Senate.
Automotive News contacted auction companies after Enterprise Rent-A-Car and Avis Budget Group Inc. said they would not rent or sell recalled vehicles that have not been repaired.
Manheim, the largest U.S. auction company, requires sellers to announce specific defects at the time of sale, in line with the policy of the National Auto Auction Association.
"This policy does not require sellers to perform recall inspections prior to selling vehicles. However, it does hold sellers responsible for announcing specific defects identified in this policy," Craig Amelung, Manheim's senior director of operational excellence, said of the NAAA policy.
ADESA Auctions, the second-largest auction company, handles recalled vehicles case by case.
A spokesman for Ally Financial, which operates the SmartAuction online wholesale auction channel, said, "Our buyer and seller agreement requires the buyer of any vehicle to repair any and all safety recalls before the vehicle is resold, redelivered or operated."
Boxer's letter
The rental-car companies' pledges came in response to a letter last month from Sen. Barbara Boxer, D-Calif., to the CEOs of U.S. car-rental companies Enterprise, Avis and Dollar Thrifty asking them to adopt such a policy.
In her letter, Boxer noted that Hertz Global Holdings Inc. already had adopted that policy.
Boxer and Sen. Charles Schumer, D-N.Y., introduced the Safe Rental Car Act in the Senate. The bill would prohibit car-rental companies from renting recalled vehicles that had not been repaired.
Enterprise CEO Andrew Taylor told Boxer in a letter that the company's policy forbids the rental or sale of recalled but unrepaired vehicles.
He noted that in rare circumstances Enterprise has used interim measures recommended by automakers to temporarily fix a vehicle until a permanent solution is available. He cited Toyota's suggestion that companies remove floor mats after the mats were blamed for interfering with accelerator pedals, leading to recalls in 2010.
Taylor said Enterprise no longer would use such interim measures.
The Safe Rental Car Act was prompted by the deaths of Raechel and Jacqueline Houck in a 2004 car accident in California. The Houck sisters were killed when the unrepaired recalled vehicle they rented from Enterprise burst into flames and crashed, according to reports.
Taylor mentions the accident in his letter, stating that the company and the car-rental industry have been working with manufacturers to adopt formal procedures for dealing with recalls.
Enterprise Holdings is the parent of the Enterprise, Alamo and National car-rental companies.
Interim measures
Avis Budget Group said in a statement that it had established a policy to not rent or sell cars under recall, and that it had responded to Boxer's letter. But Avis did not indicate whether it uses interim measures to fix vehicles temporarily, and it did not release its response to Boxer.
Company representatives did not respond to requests for further comment.
Boxer responded to Avis in a letter asking the company to clarify its policy for rentals and sales, saying that the company's response was unclear. She cited a letter Avis sent to the National Highway Traffic Safety Administration in which the company said it allows some vehicles with minor recalls to be rented.
Avis has not released a response to Boxer's second letter. Avis Budget Group is the parent of Avis and Budget.
You can reach Arlena Sawyers at asawyers@crain.com.
