What Federal Law Requires

There is no federal law that requires used car dealers to inform customers about open recalls or deployed airbags. 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. Also, often when a dealer receives a vehicle, they have no knowledge if the airbag is or is not working and the best information available to dealers is often a vehicle history report which is easily accessible to consumers. 

None of that means that a dealer has no exposure when selling a vehicle subject to a recall, TIADA encourages 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. Any misrepresentation may be actionable under the Texas Deceptive Trade Practices Act (DTPA).
 

The FTC position is 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.
 

Advice from TIADA

As TIADA has advised for years, dealers would do well to run each VIN at https://www.nhtsa.gov/recalls  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. In addition to running this report, a dealer may want to use a carbon copy form such as this one offered by Burrell Printing disclaiming any knowledge of the condition or operability of the airbag in instances when the dealer is unsure if the airbag is operable. Alternatively, in situations when the airbag is known to be inoperable, you should have the customer sign a clear statement that they were advised of its inoperability.