Can I Sell a Vehicle With an Open Recall?
We are getting calls from members wondering whether they are allowed to sell a vehicle subject to an open recall . . .
We are getting calls from members wondering whether they are allowed to sell a vehicle subject to an open recall, and, if so, under what conditions.
Let's start by recognizing that not all recalls are created equal. There are two types: safety and non-safety; we will focus exclusively here on safety recalls. In 2014, the National Highway Traffic and Safety Administration (NHTSA) established a VIN-specific lookup tool at the website www.safercar.gov. This tool allows the user to enter a VIN and get the government's most recent information about that specific vehicle's open safety recall record.
Currently there is no federal or Texas state law that explicitly prohibits a dealer from selling a vehicle with an open safety recall. But that doesn't mean a dealer has no exposure in such a sale, according to NIADA regulatory 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)."
So, if there is no explicit prohibition on the sale of vehicles with an open safety recall, how should an independent dealer proceed? As usual, the mantra is disclose, disclose, disclose. Most attorneys will tell you: to knowingly make a false or misleading statement of fact concerning the need for parts, replacement, or repair service is also actionable under the DTPA. Obviously the most prudent course of action is to identify any inventory vehicles with open safety recalls and arrange to have repairs made accordingly. However, as we all know, there are any number of reasons this is not always possible, the most obvious being that the fix has not yet been identified or the necessary parts are not available.
The association recommends dealers run each VIN through the www.safercar.gov lookup tool at closing, print out the results and have the customer sign and date the document. A copy of this signed document should be retained in the deal jacket. Considering that recall results may change literally from day to day, it is important to make sure the most up-to-date information is being provided to the customer, regardless of the vehicle's open recall status.
This practice ensures that you are making a good faith effort to disclose the best, most accurate recall information available to every customer on each transaction.