Used Car Safety Bill Bans Sales of Unrepaired Recalled Vehicles, Holds Manufacturers Accountable

If you’ve ever bought a used car, you know the drill: you’re hoping for a deal, but secretly worried about what hidden problems you might be inheriting. The Used Car Safety Recall Repair Act is aimed squarely at tackling one of those major anxieties—known, unaddressed safety recalls. This bill makes it generally illegal for dealers to sell or lease a used vehicle if it has a known safety defect or noncompliance issue that hasn't been fixed yet. It also forces manufacturers to start paying dealers if they drag their feet on providing the parts or instructions needed for a fix, a change that kicks in one year after the bill becomes law.

The End of “Sold As Is” for Safety Defects

This is the biggest shift for consumers. Right now, it’s entirely possible to buy a used car from a dealer that has a serious, unfixed safety recall, like an issue with the brakes or the ignition. This bill closes that loophole. For dealers who sell at least five cars a year to non-resellers, they can no longer move a used car off the lot if the manufacturer has issued a safety recall notice (Sec. 2). Think of it this way: if you’re looking at a used SUV, and the airbag recall hasn’t been completed, the dealer must fix it before handing you the keys. This directly improves safety for the person buying the car, ensuring that the known hazards are addressed up front.

There are a few practical exceptions, though. Dealers can still sell the car if the recall information wasn't available through the official system at the time of sale, or if the car is going to another dealer (wholesale), or if it’s legally classified as a “junk automobile” (Sec. 2). These exceptions are important for keeping the wholesale market moving and dealing with scrap, but for the average buyer, the rule is clear: no known safety defects, no sale.

Making Manufacturers Pay for the Waiting Game

This bill also addresses a significant pain point for used car dealers, which ultimately impacts the availability and cost of used cars. When a manufacturer issues a recall, dealers often have to pull the affected vehicles off their lots until the manufacturer provides the necessary parts or instructions. This inventory sits idle, costing the dealer money. Under this Act, if a manufacturer fails to make the required fix available within 60 days of the recall notice, they must start paying the dealer a monthly reimbursement (Sec. 2).

This payment is calculated daily and must be at least 1% of the car’s fair market value per month. This is a direct financial incentive for manufacturers to prioritize getting recall parts out quickly. If they don't, they start incurring holding costs. For a dealer, this means they aren't just eating the loss on a $20,000 car that's stuck in limbo for six months. For consumers, this should mean less time that highly sought-after used inventory is held up waiting for a simple fix, potentially easing supply issues.

What Happens Next

While the goal is to make used cars safer, the implementation will be key. The Secretary of Transportation gets the job of setting the exact monthly reimbursement rate and determining what constitutes “fair market value” for that dealer compensation (Sec. 2). That administrative detail holds a lot of power, and how they define “fair market value” could affect how much pressure manufacturers actually feel. All these changes—the sales ban and the reimbursement rules—won’t be live until one full year after the bill is signed into law (Sec. 3). This gives the industry time to adjust inventory management systems and gives manufacturers time to ramp up their recall repair processes.