Why U.S. isn't ready for a law that grounds vehicles with open recalls

AutoNation Inc.’s declaration, announced today, that it won’t sell a vehicle that has an open recall may prompt renewed calls to make that policy the law of the land. Such a law would be a mistake, at least under our current system of government recalls.

The idea of prohibiting the sale or rental of cars under recall has been bandied about by consumer advocates at both the federal and state level for some time. The most recent federal attempt, known as the Blumenthal Amendment for the Connecticut senator who sponsored it, was attached to a federal spending bill but didn’t get out of committee before Congress adjourned this summer.

The fundamental problem with the proposed prohibition is that all recalls are not created equal. Not selling a car because it has a defective airbag, or brakes that are known to fail, is one thing. Not selling a truck because it has has a typo in the owner’s manual, or a running board that’s not properly bolted on, is quite another.

Burden on dealers, consumers

To insist that a car or SUV burdened by a typo should be parked until it can be fixed would be an outsized burden to place on both the industry and consumers.

Am I overstating the case? Try this.

Say a vehicle has been recalled for defective airbags, and there aren’t enough replacement parts to go around. A law banning the sale of that vehicle might be seen by safety advocates as a way to keep a potentially deadly vehicle off the road. But such a law might well mean that the owner of an affected vehicle could not even trade it in while purchasing a “safer” one. After all, what is a trade-in but the sale of a vehicle by a consumer to a dealer?

And how would the government enforce a rule banning private-party sales that don’t go through a dealership?

At the very least, we need a system that rates the severity of recalls, before we discuss whether to prohibit the sale of ones that are genuine safety risks. Only then should Washington try crafting regulations surrounding transactions that involve a vehicle with an unrepaired recall.

What approach?

If it were the most serious level of recall, would it be best to prohibit sales? Or to allow sales, but prohibit the issuing of license plates to those vehicles -- an approach that would get unsafe cars and trucks off the road even if they have not changed owners?

There are a number of possible approaches to this issue. But until recalls are categorized by the level of safety issue each entails, all of those approaches are false starts.