Can You Sell a Vehicle with an Open Safety Recall?
News headlines abound about auto manufacturers recalling thousands of vehicles each week. They affect so many different manufacturers and occur so frequently that it is almost certain independent dealers will eventually find vehicles in their inventory with open safety recalls. While there is no law that prohibits a dealer from selling a vehicle in this condition, that does not mean a dealer has no exposure in such a sale. In blog post, we discuss what steps dealers should take to protect themselves in this era of recalls.
There is no federal law that requires used car dealers to inform customers about open recalls. In fact, independent used car dealers have no better access to open recall data or the ability to repair recalled vehicles than do customers. Vehicle manufacturers' offering free recall repairs at new car dealerships do not ensure that parts will be available, or that customers can quickly access those repairs.
None of that means that a dealer has no exposure when selling a vehicle subject to a recall, according to NIADA counsel Shaun Petersen. "We encourage dealers to only make representations about vehicles they know to be accurate, whether regarding the recall status of a vehicle, the vehicle's condition or otherwise,” Petersen said. “Any misrepresentation may be actionable under the Texas Deceptive Trade Practices Act (DTPA)”
Last year, the FTC confirmed that auto dealers may market and sell used cars with open recalls as long as they provide a general statement that cars might be subject to a recall AND tell customers how to check for open safety recalls.
As TIADA has advised for years, dealers would do well to run each VIN through the www.safecar.gov tool at closing. Print out the corresponding report, have the customer sign it and keep a copy of the report in the deal jacket. This practice ensures that you are making a good faith effort to disclose the most accurate recall information available.