CarMax Inc. owes the National Automobile Dealers Association, the National Auto Auction Association and the National Independent Automobile Dealers Association an enormous thank you.

Those associations last week helped CarMax dodge what could have been a devastating bullet.

Oh, that wasn’t their objective. The associations’ goal was to scuttle the so-called Blumenthal Amendment.

The amendment, proposed by Sen. Richard Blumenthal, D-Conn., would have prohibited the sale or lease of used cars subject to a recall until the defect or noncompliance has been remedied. It had been tacked onto a Senate bill to fund American transportation programs, including spending on highways, railways, transit systems and other infrastructure.

Robust lobbying by those three associations and their members played a part in getting the Senate Committee on Commerce, Science and Transportation to vote down the amendment. When the bill won approval by the full Senate, the Blumenthal Amendment was already dead.

Dealers, both new and used, and auctions would have struggled to comply with the amendment. Vehicles would have sat on lots awaiting parts. Deals that were poised to close would have had to be put on ice. Consumers’ vehicles would have lost value, without a single recall repair getting done any faster.

It was a headache waiting to happen.

But nobody would have been hurt as badly as CarMax, the 800-pound gorilla of the retail used-car world.

In June, CarMax drew fire from consumer groups in California for selling cars with open, i.e., unrepaired, recalls. As reported by Automotive News’ Nora Naughton, Research by California Public Interest Research Group and the Consumers for Auto Reliability and Safety Foundation found that 10 percent of the vehicles CarMax offered for sale at its Oxnard store on May 20 and 21 and 9 percent of vehicles offered at its Sacramento South store on May 26 and 27 were subject to safety recalls.

But there’s little CarMax can do. It has a handful of new-vehicle franchises, mainly so it can go to those brands’ closed used-vehicle auctions. But those aren’t nearly enough to handle all the recalls its used-car inventory is subject to these days.

Essentially, CarMax is dependent on the kindness of strangers. If the Blumenthal Amendment had passed, it would have had to send its recalled vehicles to rival new-car dealerships for repairs. Any bets whether CarMax’s cars would have been at the front or the end of the line at rivals’ stores, waiting to be fixed?

But the amendment was shot down, so CarMax needn’t worry about that nightmare.

Sometimes, it seems, helping yourself entails helping your biggest rival.

Source: Automotive News (Digital), August 8, 2015
NAAA Posted 8/9/2015