How to Protect Your Dealership in a Safety Recall
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.
However, recently a large independent automobile dealer entered into a voluntary compliance program to settle claims brought by numerous attorney generals, including the Attorney General of Texas, related to the dealer's sale of used motor vehicles with open recalls. The voluntary compliance program requires the dealer to obtain a signature from a customer purchasing a vehicle with an open recall in a standalone document that clearly conveys the vehicle is subject to an open recall that is unrepaired and the safety risks associated with the recall. The dealer must obtain this information from NHTSA VIN Look-up or from a commercial provider of recall information that is generally accepted to yield accurate and reliable results, such as CARFAX or AutoCheck.
In addition to the disclosure requirement at the time of purchase, the dealer must provide disclosure on the first page of any webpage that includes an overall description of the vehicle or a vehicle history report. The required disclosure should state, “the used motor vehicle may be subject to an open recall for safety issues that have not been repaired,” and include a link to obtain a vehicle history report or a link to the NHTSA VIN Look-up. For vehicles on the lot, the dealer must provide the same statement and a hyperlink, QR Code, or other mechanisms to obtain information about recalls. Additionally, the dealer must provide a mechanism for those customers without a smartphone to access the information. Finally, the dealer must avoid making representations that it put the vehicles through a rigorous inspection process unless the vehicle is not subject to a safety recall, or the dealer provides a statement that the vehicle may be subject to an open recall and how consumers can determine whether or not the vehicle is subject to an open recall.
With this settlement in mind, TIADA recommends you take the following steps:
Have a form that discloses if a vehicle is subject to an open recall.
Have a disclosure on your website that “the listed vehicle may be subject to an open recall for safety issues that have not been repaired.”
Provide a link on your website where a customer can do a VIN Look-up or obtain a vehicle history report.
Provide a QR Code or other mechanism on your window sticker to allow customers to look up recall information. TIADA has created a QR Code that you can use at your dealership.