Cars Sold with Safety Defects: Cortlandt Manor Auto Dealer Settles with NY AG

CORTLANDT, NY — Westchester Auto Exchange Inc. is among more than 100 car dealerships that sold vehicles without telling their buyers about recalls for dangerous un-repaired safety issues and who have reached a settlement with New York Attorney General Eric T. Schneiderman. Those unmentioned recalls? They were for reasons such as unintended acceleration, airbag problems, vehicle fires, steering or brake loss.

But a consumer watchdog group said it's not enough, and New York buyers are still victims.

Thirteen dealerships in the Hudson Valley are among the 104 in the settlement, Schneiderman announced Friday. Among other measures, the settlement requires the auto dealers to pay a fine, start providing consumers with advance notice of any existing and un-repaired recall, and send notices to customers who purchased vehicles with un-repaired safety recalls that are still un-repaired, from January 2016 to the present.

An investigation by the AG’s office found that while many prospective car buyers reasonably assume that any known and existing safety issues have been repaired or disclosed by the dealer, that is often not the reality of car buying in New York.

“The safety recalls we uncovered were serious — and potentially deadly," Schneiderman said in his announcement. “Consumers deserve to know of any unresolved safety issues before buying a car for themselves or their family."

They deserve more than that, said advocates at Consumers for Auto Reliability and Safety (CARS), a non-profit organization that has been spearheading efforts to protect used car buyers from car dealers who sell unsafe recalled used cars without bothering to get them repaired so they are safe to drive.

New York dealers can still sell "deathtrap" cars to New Yorkers who can’t afford a new car, just with various written disclosures, which may be only in English, about the existence of a safety recall, CARS officials argued.

"All that does is make it easier for manufacturers of defective cars and unscrupulous car dealers to shift the legal liability onto innocent victims," said Cally Houck, an attorney and mother of Raechel and Jacqueline Houck, who were just 24 and 20 years old when they were killed by an unrepaired recalled Chrysler PT Cruiser with a defect in a steering hose that leaked and caused an underhood fire and loss of steering.

Houck worked closely with CARS to gain passage of a landmark new federal law, named in honor of Raechel and Jacqueline, that prohibits rental car companies that own fleets of 35 or more rental cars from renting, selling, or loaning cars with pending safety recalls until they have been repaired. President Obama signed the Raechel and Jacqueline Houck Safe Rental Car Act into law, and it took effect last June.

The leading author and champion for the law was New York Senator Chuck Schumer, and it was co-sponsored by New York Senator Kirsten Gillibrand, CAR officials said. Under pressure from Democratic safety champions, consumer groups, and their own constituents, the Republican-controlled Congress ultimately rejected attempts by auto manufacturers such as Ford and Toyota to weaken the legislation to allow rentals and sales of unsafe recalled vehicles with “disclosure."

“Car dealers should not be allowed to play ‘recalled used car roulette’ with people’s lives,” said Rosemary Shahan, President of Sacramento-based CARS. Allowing sales of un-repaired cars with just a notice means New York could become a dumping ground for unsafe recalled cars, she said.

But Amy Spitalnick, Schneiderman's Press Secretary, said the folks at CARS underestimated the import of the settlement.

“Attorney General Schneiderman supports legislative efforts to change New York state law so that no dealer can sell an unrepaired vehicle," Spitalnick said. "But until the law is changed, the new disclosure requirements reached through today’s settlements ensure that every consumer will at least be informed of these issues before buying. And requiring dealers to disclose these issues to consumers incentives them to fix them on the front end, before the cars are up for sale. That is an important step forward.”

As part of its investigation, the Attorney General’s office surveyed advertisements, monitored vehicles covered by safety recalls, and identified auto dealers that advertised vehicles with un-repaired safety recalls.

As part of the settlements, the participating auto dealers are required to adhere to a set of guidelines in order to alert consumers that their vehicles may have un-repaired recalls, including the following:

• Dealers that advertise used vehicles online must include information that enables consumers to check the recall status of advertised vehicles; that information includes the SaferCar.gov website operated by NHTSA.
• Dealers who advertise in print or other media must also disclose in the advertisement that the vehicle is subject to a safety recall.
• Dealers must place a decal notice in the window of used cars that include information that allows consumers to check the recall status of the vehicles, including the SaferCar.gov website and mobile application operated by NHTSA.
• Two days prior to any sale, dealers must provide consumers with a copy of the NHTSA recall status report for a vehicle with an un-repaired safety recall, and obtain a written acknowledgment from the consumer.
• Dealers must send notices to customers who have purchased vehicles with un-repaired safety recalls that are still un-repaired, from January 2016 to present. Manufacturers’ franchise dealers must also cover up to five days of a loaner car for consumers if their vehicle requires repairs that will take longer than one day.
• Each auto dealer will also pay a fine of $1,000 to New York State.

"I am pleased that thanks to our investigation and today's settlement, more New Yorkers will finally receive the critical safety information they need to make an informed decision," Schneiderman said. "I encourage all auto-dealerships across the state to follow our guidelines to ensure that they too uphold the highest standards of consumer safety. This is an important first step towards making all cars on New York’s roads safer.”

Under Federal Law, used car dealers, as well as new car dealers who sell used cars from unrelated auto makers, are required to either have a manufacturer authorized repair person on their premises or transport the vehicle to a dealer related to the vehicle’s maker to have the recall work done.

The Attorney General’s office investigation is ongoing.

Consumers who purchased vehicles after January 1, 2016 who believe they have possibly unrepaired safety recalls should contact the Attorney General’s office at 1-800-771-7755 or via web form.

Consumers can check the recall status of your vehicle by entering its Vehicle Identification Number (VIN) on the NHTSA website.

The list of 104 dealerships includes businesses in these Hudson Valley regions:
POUGHKEEPSIE REGIONAL OFFICE

• Hudson Valley Auto Sales, 196 Fairview Ave, Hudson, NY 12534
• Ruge’s Automotive, Inc. (2 Dealerships), 6882 U.S. 9, Rhinebeck, New York 12572
• Autos by Joseph, Inc., 2032 US-9W, Milton, NY 12547
• Frank Siena Auto Sales, Inc., 4922 NY-17M, New Hampton, NY 10958

WESTCHESTER REGIONAL OFFICE

• JC Lopez Auto Sales Corp. 305 Willet Avenue, Port Chester, NY 10573
• Croton Auto Park 1 Municipal Place, Croton-on-Hudson, NY 10520
• New Rochelle Chevrolet, Inc. 291 Main Street, New Rochelle, NY 10801
• The Rivera Auto Group, Inc. d/b/a Rivera Toyota 325 N. Bedford Road, Mt. Kisco, NY 10549
• Rockland Motors, Inc. 85 Route 303 North, West Nyack, NY 10994
• Rye Subaru 1175 Boston Post Road, Rye, NY 10580
• Saw Mill Auto Sales 12 Worth Street, Yonkers, NY 10701
• Westchester Auto Exchange Inc. 2311 Crompond Road, Cortlandt Manor, NY 10523

Image By Laitr Keiows, via Wikimedia Commons