According to recent estimates, roughly one-fourth of all recalled vehicles never go in for their needed repairs, and many of these vehicles wind up in the used car market. While it’s at least understandable for a private seller to ignore or not know about an open recall, we expect higher standards from used car dealerships, higher standards that come with a higher price. But while such dealerships will clean the car inside and out, buff out any dents and rust spots, and inspect the mechanical parts to make sure everything is in good working order, they won’t investigate a vehicle’s recall history and apply any necessary repairs. So why not?
The Information Problem
Until very recently, independent used car dealerships didn’t have access to a centralized website which lists all the currently open recalls along with entries for every car that show whether they have or haven’t gone in for repairs. As such, the dealerships had to put in a large amount of research for every car they acquired simply to be able to say whether or not the car came with open safety recalls. You might argue that these dealerships had an ethical responsibility to provide this information, but they successfully argued against any federal law to that effect.
However, now that looking up a vehicle’s recall history is as simple as visiting the NHTSA’s website and looking up the Vehicle Identification Number, the independent dealership industry representatives are saying they would be willing to accept a disclosure requirement. At the same time, however, they are still refusing to perform these needed repairs before selling their vehicles.
The Access Problem
The thing about recall repairs is that they have to happen at a dealership sponsored by the car’s manufacturer. This means that independent dealers and repair shops have to send their vehicles to the sponsored dealership to get these recall repairs done just like any independent owner.
However, a large number of new car dealerships also run “pre-owned” vehicle programs, which means they compete directly with the independent dealerships. As such, the new car dealer has a fairly strong incentive to drag its heels when it comes to fixing the car, and they often make sure they prioritize other recall and repair jobs (including recall jobs for their own used cars) over the one that would let their competitor sell a vehicle for more money.
By contrast, as soon as that same vehicle becomes the property of a private individual, the sponsored dealership would likely turn right around and fix the problem as fast as possible to encourage brand loyalty.
As the laws currently stand, it’s up to every used car buyer to research his or her vehicle of choice to check for open recalls, flood damage, and other potential deal breakers. It’s also on the new owner to get the vehicle into the shop as soon as possible to fix any outstanding problems. Thanks to the way the industry works, while car manufacturers can get in hot water for selling defective and dangerous products, the world of used car sales is too cutthroat for anything better than “buyer beware.”