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Inside this issue
Townhall.com: Senate Could Destroy Your Car's Trade-In Value
Talks Under Way on Requiring Used-Car Recall Repairs
When CFPB, Dealers Meet, Sparks Fly
FCA Likely Topic in NHTSA's Visit to Detroit Today
U.S. Light-Vehicle Sales Heading to 17 Million Units
Year-to-Date Auction Volume Up by 7 Percent
Hyundai Looks to Boost Profile With NFL Deal, New Tucson
Top Stories
Townhall.com: Senate Could Destroy Your Car's Trade-In Value
By Phil Kerpen

The Senate may vote soon on an amendment by Democratic senator Dick Blumenthal that would make it illegal for dealers to sell any car with an open recall. That might sound good, but there's a huge problem: many recalls are for items as trivial as a printing error in the owner's manual, and when a part is simply unavailable, there's nothing you can do about it. The Blumenthal proposal would therefore effectively make it impossible for millions of Americans -- finding their cars suddenly with little or no trade-in value -- to buy a new car.

In his press release for the so-called Used Car Safety Recall Repair Act, Blumenthal says: "There are now more than 46 million cars and trucks on our nation's roads with unrepaired safety recalls." The proposal, which would prohibit the sale of those vehicles, could be considered imminently as an amendment to the highway bill on the Senate floor. But are there really 46 million unsafe vehicles on the roads? Of course not. Many recalls have almost nothing to do with vehicle safety.

Blumenthal's amendment would effectively slash the resale value of all of those vehicles to zero -- for years. And that means dealers could offer -- at best -- only pennies on the dollar for trade-ins, because they would have to hold the cars indefinitely until the parts became available. That would be a disaster for consumers, for dealers and for automakers.

A better approach would be to differentiate between truly dangerous defects for which vehicles should be immediately taken off the road and the more typical day-to-day issues that result in so many recall notices that many drivers become numb to them and leave them in the pile of junk mail. It would also be worth considering adopting the approach used by the Consumer Product Safety Commission, which does not send recall information to consumers until parts are available, making compliance more likely.

The federal government has made motor vehicles the most regulated consumer products in America, and the current recall system has room for significant improvement. But the heavy-handed Blumenthal approach could destroy the value of your trade-in. The Senate should vote no. Click here for the full commentary.
Source: Townhall.com

Phil Kerpen is president of American Commitment.

Editor's note: Sen. Blumenthal's (D-Conn.) amendment to ground used vehicles under open recall was defeated in the Senate Commerce Committee on July 15 by a vote of 13-11. This amendment may be offered on the Senate floor later this week. Dealers and their customers are urged to call their Senators at 202.224.3121 and urge them to oppose the anti-consumer Blumenthal amendment during the Highway bill debate. Contact information for the Senate offices is also available at www.senate.gov. Click here for NADA's issue brief on vehicle recall legislation.

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Talks Under Way on Requiring Used-Car Recall Repairs

Senate staffers, auto industry officials and others held intensive talks over the weekend on a proposal to require recalled used cars to be repaired before being sold, The Detroit News has learned. The proposal -- if adopted -- would be one of the most significant auto safety reforms in years and pose a challenge for the nation’s 17,000 new-car dealers that sell millions of used cars a year. But it is still unclear how expansive the requirement would be and whether the Republican majority in the Senate will agree to it.

In March, Sens. Richard Blumenthal, D-Conn., and Ed Markey, D-Mass., introduced legislation that would require the repairs.... A bill sponsored by Sen. John Thune, R-S.D., chair of the Commerce Committee, and approved by the panel last week would not bar the practice of dealers selling unrepaired recalled used cars — but would require notification to buyers. The panel agreed to add an amendment barring rental car firms renting a vehicle under recall that has not yet been repaired.

Last week, the Senate Commerce Committee rejected most amendments proposed by Blumenthal and other Democrats to Thune’s bill.
Source: The Detroit News

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When CFPB, Dealers Meet, Sparks Fly

Regulators, retailers ask: What's fair?

"Is it fair for you to get to us through the lenders?" That was the question Detroit-area dealer Bill Perkins put to Patrice Ficklin, the Consumer Financial Protection Bureau's assistant director for fair lending and equal opportunity, during a Q&A session at the annual conference of the National Association of Minority Automobile Dealers [in Miami Beach, Fla.] The July 8 exchange came as a CFPB official addressed dealers directly in public for the first time. The agency, which by law has oversight over lenders but not dealers, has sent officials to lender conferences -- but not to dealer gatherings. If Ficklin -- joined by Steven Rosenbaum, chief of the housing and civil enforcement section of the Department of Justice's Civil Rights Division -- thought the reaction from the mostly minority audience would be warm and fuzzy, that wasn't the case.
Source: Automotive News

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FCA Likely Topic in NHTSA's Visit to Detroit Today

Details regarding potential fines and penalties for Fiat Chrysler Automobiles NV over its recall efforts could come [this] week, as federal automotive safety officials visit Detroit. National Highway Traffic Safety Administration Administrator Mark Rosekind is scheduled to meet with reporters on Monday for a “high-level” discussion on the “progress of his top agency priorities -- improving the process and performance of defect investigations, enhancing NHTSA’s core safety programs and utilizing technology to enhance safety.”
Source: The Detroit News

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U.S. Light-Vehicle Sales Heading to 17 Million Units

Deeper analysis of first-half 2015 U.S. light-vehicle sales indicates the industry is on track to reach 17 million units this year. Based on seasonal trends, particularly in years when demand continues rising in the second half of the year from the first six months, which WardsAuto expects for this year, it’s almost inevitable that 2015 will end with volume of at least 17 million units. First-half sales totaled 8.49 million units, 4.4% above year-ago. And in years with ongoing growth (based on seasonally adjusted annual rates), the second half usually outdoes January-June volume.
Source: WardsAuto

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Year-to-Date Auction Volume Up by 7 Percent

As used prices fell 2.5 percent last month, auction volume was on the way up, perhaps playing a role in the continuing depreciation being seen in the auction lanes. According to the latest Guidelines report from NADA Used Car Guide, auction volumes of used cars up to 8 years old reached almost 317,000 units in June, which is up 1 percent from May’s total.
Source: Auto Remarketing

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Hyundai Looks to Boost Profile With NFL Deal, New Tucson

With Hyundai’s first-half U.S. sales increase lagging that of the industry, the brand is hoping to boost its profile via a new marketing deal and redesigned CUV. “(This is a) great opportunity for a brand, albeit 30 years in the market, that is still trying to prove itself against Japanese competitors that are 50 years-plus old and domestic competitors that are 100 years-plus old,” Dave Zuchowski, Hyundai Motor America CEO, tells WardsAuto of the brand’s newly inked deal as the official automotive sponsor of the National Football League.
Source: WardsAuto

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Quotable
"[A]re there really 46 million unsafe vehicles on the roads? Of course not... [M]any recalls are for items as trivial as a printing error in the owner's manual, and when a part is simply unavailable, there's nothing you can do about it... Blumenthal's amendment would effectively slash the resale value of all of those vehicles... That would be a disaster for consumers, for dealers and for automakers."

   
-- Phil Kerpen, president of American Commitment, commenting on an amendment by Sen. Dick Blumenthal that would make it illegal for dealers to sell any car with an open recall, Townhall.com, July 17

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