Why Thousands of Recalled Volkswagen Cars May Not Be Repaired

Originally published in The American Prospect on October 22, 2015.
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V
olkswagen is in huge trouble. Last month, news surfaced that the German car manufacturer has been selling diesel-fueled cars in the U.S. with illegal software designed to trick environmental inspectors. These cars, while marketed as environmentally friendly, actually emit up to 40 times more nitrogen oxides than what is permitted under the Clean Air Act. Volkswagen has since issued a recall for the nearly half a million diesel cars in the U.S., and millions more in Europe.

But here’s another problem. Many American car owners are ambivalent about taking their recalled Volkswagen vehicles in for repair. As Christopher Jensen reported for The New York Times, many question whether fixing their cars would be worth it if they have to then deal with decreased fuel performance.

One 2013 Jetta TDI owner quoted in the story said that if repairing his car would decrease his gas mileage by 25 percent, or if the repair somehow degrades performance “to the point where the car has a lot less torque and pickup”—then he might consider not fixing it at all.

And indeed, right now he wouldn’t have to. Although recalled cars present clear public health risks, no laws currently exist that would require owners to actually fix their vehicles. (Note: the manufacturer, not the owner, would shoulder the cost of the auto repair.)

Dan Becker, the director of the Safe Climate Campaign at the Center for Auto Safety, told Jensen that Volkswagen should figure out how to “incentivize” drivers to fix their cars. “Volkswagen made this disaster; it is its responsibility to fix it,” he said. This has precedent: General Motors offered car owners a $25 gift card last year if they brought in their recalled vehicles to be fixed. Still, many never did.

Volkswagen should certainly be required to compensate owners for their deception, but the government should also recognize that there are steps it can take to ensure that these recalled vehicles do get fixed.

The environmental risks posed by these diesel vehicles seem too great to allow their repair to rest upon an individual’s conscience or cost-benefit analysis.Volkswagen should certainly be required to compensate owners for their deception, but the government should also recognize that there are steps it can take to ensure that these recalled vehicles do get fixed.

In the fall 2014 issue of The American Prospect I published a story, “Recalled But Not Repaired” which looked at why so few vehicle owners actually take their recalled cars in for repair. In 2011, the Government Accountability Office found the annual recall compliance rate in the United States averages 65 percent—meaning that millions of unsafe cars are never fixed. In Germany, by contrast, the recall compliance rate is 100 percent. The difference is that the German government mandates that vehicle owners repair their unsafe cars, and officials refuse to renew vehicle registrations for owners who don’t.

As I argued last year, we could do this in the United States, too. We could make car registration renewal contingent on auto recall completion. This would be a relatively easy policy to administer, since DMVs can check online for recalls when owners come in to renew their registration.

Some states, like California and New Jersey, already employ a similar system for energy emissions standards. The sad irony, of course, is that we now know Volkswagen had been using secret software to manipulate those energy emissions tests all along.

A spokesperson for the New Jersey Motor Vehicle Commission was quoted in the Times story saying that it would be “premature and speculative” to consider applying a similar system to the Volkswagen recalls.

I’m not convinced she’s right, but even if she is, it’s important that we begin talking more seriously about mandating recalled cars to be repaired. There would be details to consider, certainly. Loaner vehicles may have to be supplied to those who don’t want to go temporarily without a car, and maybe some vehicle technicians would have to travel out to car owners who can’t get to a dealership. Yet all those details could be sorted out.

Ultimately, mandating that car owners repair their vehicles makes far more sense than simply trying to incentivize people to fix them through things like gift cards. The stakes are too high. And with more than 64 million recalled-but-not-repaired vehicles on the road today, it’s time we start pushing for more serious solutions.

Reckoning with the New Auto Recall Bill

Originally published in The American Prospect on March 19th, 2015.
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Some 46 million vehicles nationwide—nearly one in five on the road today—have a recalled, but unrepaired, safety issue. That’s because drivers, along with auto dealers and rental companies, have no legal obligation to fix safety recalls—a gaping regulatory loophole that puts millions at risk. For years lawmakers have more or less ignored the issue, until earlier this month, when Democratic Senators Richard Blumenthal and Edward Markey introduced the Repairing Every Car to Avoid Lost Lives (RECALL) Act. The bill would require car owners to comply with all pending safety recalls in order to reregister their vehicles with the DMV, a commonsense approach that would make roads safer. Yet while the new bill represents a critical step forward towards addressing our recall problem, it also raises troubling questions about how recalls are conducted and what the responsibility of manufacturers is to repair safety defects.

Undoubtedly the bill comes at a critical time. More vehicles were recalled in 2014 than ever before, 63.95 million in total. This more than doubled the previous record of 30.8 million vehicles, thanks to General Motors’ faulty ignition switches and Honda’s defective Takata airbags. Under current law, most of these cars are unlikely to be fixed; in 2011, the Government Accountability Office (GAO) found the annual recall compliance rate in the United States averages 65 percent.

In the Fall 2014 issue of The American Prospect, my article “Road Hazard: Recalled but Not Repaired” explored the politics behind this growing public health issue, and I suggested that policymakers consider making registration renewals contingent on repairing outstanding safety recalls. This is how it’s handled in Germany, and as a result their recall compliance rate stands at 100 percent. At the time of publication, no legislator indicated interest in tying auto recall repairs to annual vehicle registration. The vast majority of political energy was spent on trying to increase manufacturer penalties and improve consumer notification systems.

Six months later, two senators introduced a bill that would do just what I had suggested. Honda even came out in support, saying that this “initiative will help us all achieve the critical goal of completing 100 percent of every automotive recall campaign in America.”

Keith Crain, the editor-in-chief of Automotive News, wrote an editorial in support of the bill, praising it for its simplicity. “It should be enacted by Congress and implemented by all 50 states as quickly as possible,” Crain said. “It just makes good sense.”

However, upon a closer inspection, it’s clear that there are several issues with the RECALL Act, perhaps precisely because of its simplicity. It’s encouraging that legislators are starting to see consumer responsibility as part of the solution to our recall crisis, yet as it’s currently written, the proposed bill may lead to a whole new set of problems.

If this bill were enacted millions of people would have to get their cars repaired, or else they would be put in the position of driving their cars illegally. It’s the right idea in principle, but we’d need to ensure that people actually have the supports necessary to meet these new standards. As of now, the bill’s three listed exceptions to getting your car repaired are too vague. You may be exempt if you weren’t notified of the recall when the registration renewal came out, if the manufacturer lacks the parts or labor to complete the recall, or if you’ve demonstrated that you had no reasonable opportunity to fulfill the recall. If you fall under one of these categories, the DMV could grant you a temporary registration of up to 60 days.

But these conditions raise more questions than answers. How could you prove that the parts were not available? How often do you have to call the dealer to check in? Every day? Do you need to check in with every dealer in your state? Within a certain radius? What constitutes a “reasonable opportunity”? Will manufacturers provide consumers with loaner vehicles? What if you need longer than 60 days? Given that there were many reports of consumers waiting for months for new GM ignition switches to arrive at their local dealerships, these details matter—especially when the consequence would mean losing the ability to drive your car lawfully.

Questions about how manufacturers may use this bill to shirk legal liability in the event of auto accidents should certainly be reckoned with sooner rather than later.

Moreover, the bill also raises troubling legal questions. An auto safety advocate, whom I spoke with on background, laughed when I asked them for their thoughts on the bill. “Of course Honda supports it! It totally shifts liability away from the manufacturer and onto the consumer,” they said. Questions about how manufacturers may use this bill to shirk legal liability in the event of auto accidents should certainly be reckoned with sooner rather than later.

Newer cars are more likely than older cars to have safety recalls repaired. One of the primary reasons for this is that the car manufacturers lack the ability to mail notices to anyone who purchases their car on the used car market. (There are approximately 30 million consumers who purchase used cars each year.) Under the Driver Privacy Protection Act, auto manufacturers are barred from learning the personal information of secondary owners, so therefore when recall notices go out, most people with older cars do not hear about it. Consequently, the only real way to notify used car owners by mail would be for the state to step up and take on this responsibility. In that respect, the Blumenthal-Markey bill represents a very good step towards fixing our recall notification problem, and experts think it could substantially reduce the number of unrepaired vehicles on the road.

But while the bill would require significant changes to the DMV registration process, it comes with no additional state funding to implement them. In effect, it’s an unfunded mandate. Many state DMVs rely on outdated computer systems, and building the capacity to process millions of auto recalls alongside their registration process—though it’s a smart and feasible idea in theory—requires resources. The bill also threatens to reduce states’ federal highway funding by 5 percent if they do not comply. If we’re going to ask the states to take this on, then we need to ensure they have the capacity to do so.

Many groups like the Center for Auto Safety and the National Salvage Vehicle Reporting Program are working closely with the federal government to figure out how we can improve this recall process and thereby make the roads safer. Despite the great political pressure facing legislators to take bold action quickly, it would be much better to proceed judiciously, hash out the details, and avoid chaos later.