Safety recalls have impacted almost every brand and vehicle, making it crucial to address them to minimize liability risk. Failure to repair these recalls can increase the chances of accidents, which may result in financial and reputational harm. If a dealership is targeted in a recall litigation, it could further damage their reputation. To avoid risking the franchise, it’s necessary to have a safety recall management policy and efficient processes and tools to manage recalls regularly.
By monitoring open safety recalls for trade-ins, dealer-trades, and auction purchases, you can cut down costs and boost profits. Automation can save time and money while also freeing up your team.
Compliance with recall regulations is becoming increasingly challenging due to the growing number of federal, state, and local laws. Dealer groups have faced significant penalties from the Federal Trade Commission for violating truth in advertising regulations, which prohibit the sale of CPO vehicles with unrepaired safety recalls. Under the Federal FAST Act/Safe Rental Car law, dealers with over 35 rental/loaner vehicles must ground them if affected by open recalls. Certain states mandate the disclosure of open recalls on used vehicles at the time of sale, while others require dealers to comply with rental/loaner regulations that can apply even to those with only one loaner/rental. Despite the difficulty of obtaining Stop Sale and Do Not Drive recall status for off-brands, some states prohibit the sale of affected vehicles.
To prevent potential disputes with customers who discover an open recall on a recently purchased vehicle through public sources, it’s essential to document and disclose the recall status at the point of sale. Automating post-sale auditing can help identify areas where the internal recall policy is falling short of management commitments.
How we can help
Dealerships using Simple Recon can now utilize their existing account to find out the recall information for all their auction and trade-in purchases.
Many of the OEMs either block the incentives or impose a penalty if a vehicle is sold after recall has been issued.
Our system is integrated directly into the database of Highway Traffic Safety Administration (NHTSA). As a result, you need not worry about any third-party.
You can also generate daily reports for each of the vehicles on recall that is not fixed yet and needs to be addressed.
Most dealerships do not check for active recalls on vehicles before accepting a trade-in. However, before reselling these vehicles to a buyer, the dealership must carry out the necessary recall fixes. Avoiding this step is considered to be Auto fraud. Under such circumstances, the consumers can initiate legal action against the dealership.
National Highway Traffic Safety Administration informs that at present, there are as many as eight million cars with an airbag recall issue. These recalls have affected ten automobile manufacturers.
National Automobile Dealers Association (NADA) suggests that all dealers should periodically substantiate the recall status pertaining to all vehicles present in their inventory. They must also carry out the recall work on all used vehicles.
Stay on top of recalls to make sure all inventory has open recalls resolved before you sell.
We check daily for any new recalls issued and notify you of affected vehicles.