Monday, June 06, 2016

Open Letter to Governor Rick Scott

Dear Rick,

Please excuse this public form of communication, but I chose it because my message is urgent and I believe it will get your attention faster than going through the normal, bureaucratic channels.

Florida has no law requiring car dealers to disclose national safety recalls on used cars sold to their customers. This has always been bad, but in light of the unprecedented Takata air-bag inflator recall (currently affecting 75 million vehicles in the U.S. and rising), it should be mandatory for all licensed Florida automobile dealers to fully disclose to their customers when a defective Takata airbag is installed in the vehicle they are selling.

I’ve communicated my position directly to the Florida Automobile Dealers Association, and they are aware of this serious omission in Florida’s laws. Unfortunately, legislative action, as you well know, is always a slow process if it ever happens at all. What is required in this case is an emergency executive action by you, the governor of the state of Florida.

I can assure you  that very few Florida automobile dealers are voluntarily disclosing safety recalls affecting the used cars they sell.  As I write this letter, there are Floridians unknowingly buying cars with defective Takata airbag inflators that could possibly explode on impact, firing metal shrapnel into their bodies. There have already been several deaths across the country attributed to these faulty inflators.

It is a certainty that nearly all car dealers in our state have vehicles in their current inventories with these defective airbags and other safety recalls. I have identified sixteen in my used vehicle inventory that are affected. It’s a simple matter to identify these vehicles by entering the VIN online at the NHTSA website, http://www.nhtsa.gov/Vehicle+Safety/Recalls+&+Defects.

The sad fact is that most dealers don’t check these vehicles for recalls because it takes time to have the recalls performed and “time is money”. Recalls can only be performed by franchised new car dealers of the make that is recalled. Franchised car dealers prioritize recalls for their inventory cars and for their customers’ cars. They are also dealing with long waiting lists of these cars awaiting the requisite parts. With the Takata airbag inflator recall, the wait time is about about a year because of the lack of availability of parts. No car dealer is going to let a used car sit on his or her lot for a year!

Sadly, another reason safety recalls are not being disclosed to customers is fear of loss of profit. As it should, telling a customer that they are buying a used car with a potentially deadly defective airbag reduces the value of that vehicle - especially when the customer learns he or she must drive that car for a year before a safe airbag can be installed. 

Because disclosure negatively impacts the affected vehicles' values, car dealers are caught between a rock and a hard place. If they retail the cars to customers, they have to slash the selling price and if they sell them at the wholesale auction they have the same problem. Florida consumers will also be adversely affected, as car dealers will not be able to offer as much money for trade-ins under this recall since the dealer knows he or she can’t resell it for as much as they could with a safe airbag.

This presents an entirely new and different problem…an economic liability question. Everyone agrees that Takata is largely responsible for the reduction in value of the 75,000,000 vehicles with dangerous airbags. However, Takata is rumored to be on the verge of bankruptcy and/or selling out. This leaves the auto manufacturers with, potentially, all of the liability. The only parties that clearly have no responsibility in this are the owners of these affected cars and the dealers who disclose the defective airbags. Unfortunately, these are the only two parties that currently bear all of the economic loss.

Adding to the urgency of this crisis is the fact that the failure rate of Takata airbags is higher in Florida than most other states because of our high humidity which increases the risk of the airbag accelerant, ammonium nitrate, exploding. Furthermore, many of the cars recalled are older models, dating back to 2004 that have been on the highways for many years, and age is also a contributing factor to risk.

Rick, if you have any questions or comments about this letter, please call me on my personal cell phone, 561-358-1474. If you would like to meet with me, I will fly to Tallahassee on a moment's notice.

Best,

Earl

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