Used Vehicle Recall Regulation: A Future Part Of Life For Dealers?

A recent Detroit News article suggests dealers may have to worry more about recalls than they do today.

The article discusses the Obama administration efforts to extend recall responsibility to used vehicles, and require dealers to fix any open recalls before they retail a unit.

Currently, federal law requires dealers to address recalls for new vehicles, which doesn’t always happen before they’re sold. The article notes the National Highway Traffic Safety Administration issued fines last year to dealers who retailed new vehicles without fixing recall items.

On one level, the administration’s interest in requiring recall repairs for used vehicles is understandable. There are more recalls than ever, and some recall issues affect vehicle owner/occupant safety. Likewise, the problem of vehicle owners either not receiving recall information, or not responding when they do, remains persistent.

The article highlights NADA’s rightful resistance to the regulatory effort, particularly provisions that would effectively “ground” a used vehicle until the dealer fixes the recall issue.

The issue gets thorny when you consider how a Chevy dealer might be required to fix a Ford vehicle acquired at auction or trade, and how large public/private dealer groups might be at even greater risk, given their relationships with vehicle owners across a variety of franchises.

It’s still too early to say if the federal government’s interest in used vehicle recalls will result in more regulations for dealers. But I suspect, over time, dealers will bear a greater degree of responsibility for making recall repairs before they retail a new or used vehicle.

For some dealers, such responsibility will be viewed as a burden, which they will resist. Others, meanwhile, will recognize that as they seek to serve customers for life, recalls have become a part of life.