Car Dealers Impacted Under New NHTSA Bill

We reported last week that the NHTSA faced scrutiny from congress over what was perceived as their role in the GM ignition recall crisis. The allegation was that they could have known as early as 2007 about the problems with certain GM vehicles if they had dug deeper into reported crashes. Next up for this organization is a bill aimed at expanding their power. The bill is called the Vehicle Safety Improvement Act of 2014. Illinois Congresswoman Jan Schakowsky (D) is the politician who introduced VISA.

The bill is meant to make the NHTSA stronger in its ability to protect the consumer. Some of the highlights of the bill include:

1. The NHTSA would have the ability to get vehicles recalled in a faster manner than is currently taking place.
2. The NHTSA would be entitled to receive crash-related information quicker so that it can alert drivers
3. It would make all auto manufacturer safety information, such as memos publicly available online

It would also impact Used Car dealers as Congresswoman Schakowsky said, “it would require used car dealers to inform customers about any defect in a used car that hasn’t been fixed.” To dig deeper into the official summary on that point we learned dealers would need to look into every used vehicle they sell for recalls. The official summary indicates that under the bill a dealer is prohibited, “from selling or leasing a used motor vehicle until the dealer gives the purchaser or lessee (and they acknowledge receiving) a notification of any defect or noncompliance not yet remedied.”

The bill would also scrap the current ceiling on non-compliance fines the government can impose on automakers. GM paid the maximum $35 million dollar penalty this year. Under this bill, that number could grow significantly, with some estimates in the $300 million range.

This bill has the potential to impact dealers and automakers alike. What do you think? Is it necessary after colossal missteps by GM, or is this a situation where the government is overregulating the automotive industry?