Unsafe Car - wont pass inspection?

[R22B]

This is a cross state question (PA/NJ). Originally posted here, but someone said ask here... so I figured why not!

My old man purchased a car in New Jersey (he lives in PA) back in March 2010. He went to finally get it inspected and stuff the other day and the rear tire decided to pull a move from Back to The Future and fold under itself. Upon further inspection, it appears the entire rear suspension with the exception of the struts and shocks, are completely rusted through.

We had it checked out by a person who does inspections after this happened. He crawled under, went "ohhhhhhhhhhhhh", and around 45 seconds lated crawled out and said there is no way that the car will pass inspection and its NOT safe to drive on the road. He wrote up a letter saying this so we can use it if need be.

Here's the main issue (and I don't know technical names -- sorry), it looks like most of the bits that hold the tire on are completely rotted through. I mean there are visible holes and its paper thin on most parts.

I attached some pictures for review. My question is can a New Jersey dealership sell an unsafe car? It has been deemed unsafe by a certified inspection person.

I attached some pictures and I came across this: New Jersey N.J. Rev. Stat. § 39:10-26 Dealers must warrant that vehicles will pass state safety inspection standards.

I'm not looking for legal advice or anything -- I just want to know the laws on a dealership selling a used car "as is" (I've read that NJ dealers can't do that), and selling it in an unsafe state.

Thanks.