Technology has made a huge impact upon our modern society. In the past, standard postal mail and phone calls were sufficient means of communication. However, as people are increasingly inundated with junk mail and persistent telemarketer calls, their willingness to pay attention to these forms of communication has diminished. It has nothing to do with whether they want to receive important communication, it’s just more challenging to weed out the vital information from solicitations.  

There are some matters so critically important they need to be communicated quickly and with the communication method most likely to succeed. Today, that method is text messaging.  

Our federal government clearly understands the effectiveness of text messaging. Look at the mass notifications from Amber alerts.  Have you ever been in a public place when everyone’s phone suddenly went bonkers with an alert?  We all have. It’s not just Amber alerts. The National Weather Service uses cell phones to warn people of dangerous weather looming. Why? Because it works. And it saves lives.  

According to an article on theverge.com, more than half of Americans ditched landlines and only use cell phone communications. Statistics also show that text messages have a 99 percent open rate; and 95 percent of those text messages are read within 3 minutes of being sent, according to Forbes. The data clearly supports just how effective text messaging is as a communication channel. 

Most people have their cell phones near them almost constantly. During the recent fires in northern California many homeowners were unaware of the danger that lurked while preparing for bed that evening. Lives were lost, which could easily have been prevented. As a result, Federal, State and local governments came under fire for not using text messaging to warn those in the path of a raging firestorm.   

Let’s pump the brakes for a second, because we also recognize how abusive some marketing can be on the consumer’s privacy. Federal laws define the distinction. Businesses are limited in their communications with consumers via the Do Not Call lists, the CAN-SPAM Act and the TCPA. Yet, even those contain exclusions for communications that inform consumers of danger. Lawmakers know that texting is a highly-effective way of communicating with consumers and that leveraging this channel in times of emergency, or threat of danger, is in the best interest of the public.  

So, what about using text messaging to warn vehicle owners about safety recalls? How important are potentially life-threatening recalls to an individual’s safety? Considering that the national average for recalls per vehicle owner is almost 1 per PERSON; and that Americans logged 3.22 trillion miles on the road in 2016; I’d say that recalls affect a pretty big chunk of the population.  

In 2016 alone, more than 53 million cars were recalled for safety reasons, by far the highest number in the past 20 years. Thousands of injuries and deaths were caused by unrepaired vehicles that are still driving around. In most cases, the vehicle owner had no idea their life was at risk while driving. The standard means of communication is via phone; which over half no longer have; and standard postal mail; which often gets tossed in the trash, mistaken for junk mail. 

The bottom line is that the current recall epidemic, which is set to continue for the next decade or longer, will lead to more dangerous driving conditions if modern, more effective, solutions are not employed. Legislators are up in arms due to low recall completion rates, but have little understanding of what to do. And far too frequently consumers don’t even know the recall exists. Texting will absolutely increase recall repair rates.   

Consumers want to be safe. If sending a text message can save lives, then we should acknowledge that existing TCPA laws protect the automotive industry’s right to communicate to vehicle owners about unsafe recalls. For those recalls posing an imminent risk to a consumer, texts also qualify as an emergency exemption to the TCPA’s ATDS guidelines and can and should be used.  In the search for increased recall completion rates, we can’t ignore how consumers want to receive these notices. 

In a September 2017 survey of consumer attitudes conducted by Recall Masters, 25.3% of respondents stated they would like to receive information about a recall on their vehicle “by any means necessary.”  And 8.9% stated that “text alone” should be the sole channel of communication.  These results clearly indicate that consumers habits and preferences have changed. 

The Future of Used Car Recalls 

A recent Automotive News report states that one in four vehicles for sale by CarMax has a safety recall that need to be fixed. A separate report by consumer advocate group the Center for Auto Safety places it at 27 percent. Whatever the exact amount, the scandal has proven to be a black eye to the automotive giant CarMax. 

According to the Automotive News article, CarMax isn't authorized to complete recall repairs and close out recalls, the company stated that repairs are, ``based on the manufacturer's relationship with its dealers and registered vehicle owners, and not with independent used auto retailers, like CarMax."  

"Our experience shows us customers are in the best position to act on recall information directly with a manufacturer-authorized dealer," the statement went on to disclose. "We have found that dealers are often more likely to provide timely recall repair to customers rather than to a competitor, like CarMax, so we encourage customers to have recalls repaired at a manufacturer-authorized facility." 

In summary, CarMax lets customers know when there are open recalls on a vehicle the consumer intends to purchase and informs the customer they are better off getting the recalls repaired on their own, rather than CarMax handling it prior to the sale.  While it may be positioned as more advantageous to the consumer, CarMax has received quite a bit of criticism from consumer groups, having side-stepped overt disclosure of recalls due to a technicality of sorts and exposed consumers to safety risks.  

Some of the defects found in vehicle models sold by CarMax have been "responsible for thousands of injuries and dozens of deaths," according to the statement from the groups, which called for action from state law enforcement officials. 

While CarMax is not alone in this practice, this epidemic of selling vehicles with open recalls should be curtailed, if not eliminated. Consumers are aware of recalls and are increasingly irritated when sold vehicles by independent or franchised dealerships with an open recall. They dislike the process of signing a disclosure in the finance department, subtly notifying them of any open recalls on the vehicle. Consumer perception is already a challenge in the automotive industry - and these inconspicuous disclosure documents further leads to consumer distrust.  

With almost 100 million vehicles on the road today with open recalls, the last thing the industry should be supporting is adding to that number by selling used vehicles with open recalls. The recall situation is already exacerbated by the fact that, right now, new vehicles are rolling off the production line with the exact same defective airbags that are under recall.  In a couple of years, these will also require recall repairs.  In addition, let’s not forget that new factory recalls occur daily, which will need to be handled within the next 5-7 years.  

Is selling a car more important than preserving a life? No amount of profit justifies that and, I believe that many dealers feel the same way. The problem isn’t human emotion, but rather commerce. Dealerships can’t stay in business if they don’t sell cars and, if they hold onto cars for months awaiting a recall repair, they will lose money.  

The long- term solution lies in a coordinated effort and commitment between all parties involved: the government, OEMS and both franchised and independent dealers; to prevent these vehicles leaving the lot in the first place and to work together in unison to fix these recalls.  

 In the interim, it appears that independent and franchised dealerships are left to fend for themselves.  Dealerships that are interested in protecting their assets and the integrity of their dealerships in the eyes of the consumer, should pursue a comprehensive recall management initiative.  With the solutions available dealers can no longer shrug their shoulders and shirk the responsibility, at least, not without facing the similar fate and criticism that CarMax now faces.

With the influx of recalls, two of the biggest challenges for manufacturers and dealers are locating vehicle owners and implementing an effective communication strategy that compels those owners to bring their vehicle into the dealership for repair.  

Consumers affected by a vehicle recall vary from those who see news reports and immediately go into panic mode, to those second-generation owners not listed on recall lists as the current owner, who get no notification and remain ignorant. 

While the information is out there for consumers to find, will they go looking for it? And, if they do hear on the news, or get a notification that their vehicle needs a recall repair, where do they turn for more information? Well, many go right online and check out their local dealership’s website and the search yields disappointing results.  In turns out, dealerships either push consumers off to the manufacturer’s website or offer no information at all.   

Some dealers are fearful that being transparent about recalls on their websites could turn off prospective buyers. But is that true? Vehicle owners have a right to know if their vehicle has an open recall.  If a consumer believes that their make and model may be plagued with a recall – especially those that are safety related – they want more information.  

Most dealer websites provide sparse service information and pretty much stick to the marketing and imagery that comes with selling this year’s model.  There’s just not a lot of service-related information on dealer websites, let alone any recall updates. Imagine if your dealership bucked the trend and became a source of information for your customers. What would that accomplish? 

To start, providing recall information on your dealer website helps build consumer trust. You can become a trusted source of invaluable information, not only for customers, but for prospective customers in your community. Your website can’t mask the fact that recalls exists, nor should it.  

Car shoppers perform vast amounts of research on dozens of websites and it’s highly unlikely that they won’t encounter some recall-related news for the vehicle they are researching. Failing to provide information on your website subtly suggests that you are being less than fully transparent and honest and could hurt you more than you think because: 

• Consumers are then forced to go elsewhere for the information, which could lead them right to your competitors’ websites.  

• Consumers can easily bombard your dealership with call after call, trying to figure out the details of a recall repair, parts availability, information, etc., putting a drain on dealership resources.  

• Due to lack of information, consumers can then choose to opt for another brand altogether, because they don’t want to risk acquiring a vehicle prone to OEM defects, or don’t want the future hassle of having to get something repaired. 

Having a rich source of recall information on your website will benefit your dealership. Here’s what you should include: 

1. Obviously, you can’t include EVERY recall on your site. However, you can easily identify those which have the most inquiries and/or are the most important to repair for safety reasons. For these include information such as: a) what the recall is, b) parts availability and shop capacity for these repairs, c) estimated duration of repair, and d) instructions on how to set an appointment.  
2. Include a list of amenities your dealership offers to those bringing in their car for a recall repair.  Do you offer loaner vehicles, shuttle service, a $50 gift card for use on accessories, a car wash, multi-point inspection, etc.?  Clearly communicate all that your dealership offers and thank them for their time. This helps win their trust. A recall is perceived as an inconvenience to most consumers – make sure you show your appreciation for their time. 
3. Add a link to known sites such as MotorSafety.org or safecar.org, so that the customer can input their VIN and learn if they have any recall outside of the major ones. 
4. Better yet, add recall lookup functionality directly to your website. Make it as easy as possible for the consumer to find the exact information they need directly from your own site.  

Position your dealership as a source of valuable information to your customers up front, so that they know what to expect. This helps reduce customer frustration, helps service department capacity remain at sustainable levels and maximizes ROs. It also separates your dealership from its competitors by not shying away from some uncomfortable issues, but rather proactively offering consumers the assistance they seek. Perception, after all, is for many, their reality.  

One of the largest hurdles to overcoming the vehicle recall crisis facing automakers, dealers and even consumers, is low recall completion rates. There are a multitude of reasons including a lack of parts, overwhelmed shops and, yes, even consumers who don’t want to be bothered with taking their vehicle into a dealership.  

Here’s a startling fact that might surprise you about how the issue is addressed across the pond. The United Kingdom is making sure its vehicle owners take recalls seriously. How seriously? An article in The Sun reports that failure to get a recall repaired can land a consumer with a £2,500 pound fine (approximately $3,300) and will invalidate the consumer’s auto insurance! A stiff penalty, indeed. Apparently, UK lawmakers value the public’s safety and are willing to put some teeth behind failure to repair a recall.  

At a glance, it appears the UK acknowledges that some of the responsibility needs to fall onto the consumer.  After all, the consumer is in possession of the vehicle requiring the recall repair and, in all probability, has the greatest control over when the repair can be performed.   

The manufacturer and dealer perform the same tasks as US-based dealerships.  This UK measure is all about including the consumer as part of the solution.  Does that sound reasonable and will a similar measure come to the United States? I don’t know. What I do know is that legislators from all areas the United States are getting frustrated with low compliance rates. These completion rates make a bad situation worse as vehicles get older and exchange hands multiple times.  The severity of the recalls are also more lethal, beginning with the Takata air bags, and extending to a range of recalls that make our roads and highways a risk to every life on the road.   

US legislators acknowledge that things are getting worse, not better.  Many legislative ideas are being explored, including prohibiting dealers from selling any used vehicle with an open recall. This legislation, spearheaded by Democratic lawmakers, is opposed by both NADA and NIADA.  Both automotive industry organizations dislike the fact that this legislation applies to all recalls – not just safety recalls. In addition, consumers get hurt by lowered trade values, while dealers are hurt by having to ground cars.  

The point is, this is only one of many conversations happening in legislative circles. Lawmakers could very easily start to eye this UK program to judge its effectiveness. Certainly, increasing recall compliance will require cooperation from everyone – manufacturers, dealers and consumers. However, right now, all the pressure and consequences are aimed at the pre-sale side of the transaction. Perhaps this concept of holding consumers accountable for their vehicles and giving them consequences for failure to get the recall repaired could help increase recall completion rates.  

In my opinion,this is a team effort that requires everyone working together in order to resolve. It will undoubtedly continue for decades to come. As long as recall completion rates remain low, there will continue to be legislative efforts to improve the situation for the safety of everyone.

One challenge in many dealerships is building an environment where teamwork thrives. Salespeople are focused on their own individual commissions, not the stores; technicians are focused on the billable hours they produce, not the departments; and F&I managers want their penetration and back-end gross to be high. Aside from management, there’s a simple reason to explain why departmental self-interest reigns supreme at most dealerships - there is no incentive for them to promote the brand as a whole. Even the best company culture can suffer with these dynamics.  

To that very point, a recent article in Automotive News tells the story of a dealer in Florida who embraced an OEM initiative that suggested technicians work in pairs. Initially, the initiative probably seemed like a bad idea to the technicians, as each job’s billable hours would be split amongst the two techs. On the surface, it may have looked like this method would lead to less money for each tech… but they were wrong.  

Since Bozard Ford-Lincoln began this initiative, their service department has doubled its productivity from an average of 1,500 ROs per month (prior to their Quick Lube opening), to 3,000 ROs per month. The dealership is now processing an average of 5,600 ROs per month! Technicians discovered, that by working in pairs, they can be more efficient and increase production. So, even though they split each job, they end up making more money.  

With two technicians working on the same vehicle, there was an inherent checks and balances built into the system. More conducive to the technician, the oversight was in a peer-to-peer environment, rather than from a supervisor or some other heavy-handed measure. It also allowed individuals to learn from one another and share their strengths. One technician might be very adept at brakes, while another could offer insights on a radiator flush. This environment offers employees a chance to teach, as well as learn, as part of career fulfillment.   

Bozard’s success is an overall win for the dealership and its customers. Prior to the team implementation customers waited 2-3 hours for an oil change. The dealership now considers it has done a poor job if that time exceeds an hour – from the time that customer arrives until they drive off in their nicely washed vehicle. In addition to an increase in CSI, turnover in service has decreased (from 20% prior to the program to just 3%); service bays have opened up, allowing increased shop capacity; and company culture has improved due to a tighter sense of camaraderie.  

Turnover is a huge problem in dealerships. While the sales department gets the spotlight in the industry with a 70%+ turnover rate, as recall work increases, demand for qualified technicians will also increase. This will cause dealerships to start wooing technicians from competitors, contributing to an increase in turnover.  

And let’s not forget the most important asset to the dealership – its customers. This turnover not only affects company culture, but also customer experience and satisfaction. Who doesn’t like to see a familiar friendly face when they visit a business they frequent? It’s like the song from the classic TV show “Cheers” -- “You want to go where everybody knows your name.”   

It appears that Ford’s model provides benefits that do not take shape often enough in a dealership’s service department. Today, many customers are left with less than ideal outcomes.  As dealerships increasingly compete with independent repair shops, a team-based approach might yield the kind of service experience that overcomes the negative perception today’s average consumer has of a dealership service department.  In fact, teamwork might prove to provide a level of customer service independent repair shops can rarely attain. It’s this differentiation dealerships are searching for in today’s highly competitive service landscape.   

If teamwork and good processes can make such a drastic difference in the service department, what effects could it have in other departments? It seems that Ford may be onto something.

According to an article posted on Ford Authority, Takata has taken a massive hit to the tune of a $1 billion settlement in the US, $25 million criminal fine, $125 million dollars to compensate victims and $850 million to compensate automakers. As a result, Takata has filed for bankruptcy and has to rely on an infusion of capital from another company to cover these costs.  

Despite all this, Takata still manufactures airbags – the same airbags, using the same inflation chemicals that degrade over time. Manufacturers continue to use these airbags on their assembly lines for new vehicles, with full knowledge that these airbags will need to be replaced within the next 5 to 7 years.  

The NHTSA recently recalled another 2.7 million vehicles with Takata airbags that pose a risk to consumers -- adding to the 42 million already recalled. To date, these faulty airbags have been responsible for 17 deaths and 180 injuries worldwide.  

While the Takata crisis remains in play, surprisingly, one manufacturer seeks reversal of a recent recall – a recall of a recall, so to speak. Ford Motor Company has taken exception to the latest recall, which includes more than 2 million Ford vehicles, and plans to fight the recall. Apparently, Ford does not believe that all the vehicles involved in the recall are affected, based on random field testing of these vehicles.  

Of course, there are always mechanisms in place for manufacturers to appeal NHTSA recall decisions. While the data Ford has presented is not yet public knowledge, the choice to dispute NHTSA’s decision is a risky move. The Takata airbag recall is the largest recall in history and, with several deaths attributed to this recall, it has become a highly sensitive and volatile issue in the public domain. The fact is that there’s no reason to believe that ANY Takata airbags are safe for consumers – past or current.  

Is NHTSA being hyper-cautious in the case of Takata airbags? Or does Ford have a right to seek more evidence in the matter? That debate has yet to be determined. However, in any recall of this size, the manufacturer’s reputation is damaged – especially when they have to notify consumers that their vehicles could potentially be unsafe and have to be taken into their dealership for repairs.  

This is not the first time a manufacturer has appealed a recall. I don’t know whether Ford’s data is compelling enough to lift the current recall. What I do know is that consumer safety is of utmost importance. Based on the high-profile recall involved, it’s highly unlikely that Ford will win its appeal – but what if it turns out that Ford was right about this matter? What if 1,999,999 of the 2 million vehicles are without defect?  

Well, what if that single vehicle places its driver and passengers at risk?  

I believe that saving a single life is worth the cost and expense -- regardless of the recall, Takata or otherwise. The NHTSA knows the cost and expense of issuing a recall -- it’s a decision they don’t take lightly.  

On the other side, Ford’s appeal involves the most dangerous airbag in history, yet claims that affected vehicles are in fact safe. I hope they’re correct. 

No matter what happens manufacturers, legislators and dealers should keep recalls front and center when choosing whether or not to place these vehicles in the hands of consumers. Based on Takata’s deadly missteps and tragic consequences, it’s better to error on the side of consumer safety. 

According to the Los Angeles Times, Honda recently released a statement detailing how a Takata airbag killed a Florida man who was working on his 2001 Honda Accord. The vehicle was not being driven at the time and the report states that the man removed the center console while working on something unrelated to the airbag. For some unknown reason, the airbag suddenly exploded, causing shrapnel to kill him. The report indicates that the vehicle ignition was on, but it is unclear why the air bag deployed without having been in a collision.  

This tragic event brings to light another set of dangers associated with Takata airbags. First, any do-it-yourself vehicle owner tinkering with a vehicle that has an airbag recall should ensure their airbag is replaced prior to performing any repairs. However, the bigger issue is the risk this represents to technicians from multiple industries that work on vehicles.  

Many independent repair facilities and other specialized repair shops do not check for airbag recalls prior to working on them -- nor would they even think about it. What about that Best Buy car stereo installer who must remove the center console to install a new deck or speakers? Or that mechanic who performs a small repair at an independent repair shop or franchised dealership? Unless these technicians are educated and trained in the proper way to disengage an airbag it is possible that another life could be lost. That business could also be liable for damages. And let’s not forget what’s at stake in service departments everywhere as far as employee safety.  

Not one individual in the automotive industry should feel separated from the responsibility of cleaning up the Takata airbag mess. It’s clear that Takata airbags present an even greater danger to consumers and businesses than previously thought – and that danger was already known to be lethal, expensive and damaging to consumer confidence!   

It is more important than ever to ensure that consumers are reached and made aware of the danger if they have a vehicle with an open Takata airbag recall. What I’m requesting is that we, in the industry, remain vigilant about the dangers of Takata airbags and that we elevate our state of awareness. Not only should dealerships monitor all the vehicles in their inventory daily for open recalls, but also check with unsuspecting consumers in their service departments and local communities whose vehicles may have had their original airbags replaced with Takata airbags.   

Take a look at your process and do what you can to provide this information at every possible touchpoint – phone, email, direct mail and on your website. Have signs in your service waiting area, at the cashier and at your service advisor desks.  

While some dealers may feel that educating consumers on the dangers of open recalls borders on creating unnecessary panic, even if it prevents just one incident from occurring, the mission is worth it.   

If anything, the dealerships who stand up and acknowledge these dangers communicate something very comforting to consumers – the fact that someone cares about their safety. We are fast approaching an era where consumers accept vehicle recalls as an inadvertent offspring to vehicle ownership. In taking a stand against recalls and in favor of consumer safety, your dealership combats complacency and takes a responsible role in finding a solution.  

Vehicles can easily change hands multiple times over their lifetime. When a recall occurs, it then becomes increasingly difficult for manufacturers and dealerships to notify the current owners, which compounds the problem of low recall compliance. For many vehicle owners, it’s not that they don’t want the recall fixed, it’s simply that they don’t even know about the recall in the first place!  

Sure, there are OEM campaigns sent out via mail. However, sadly direct mail pieces are quite often trashed because the person who receives the recall notice no longer owns the vehicle. It could literally have been years since the vehicle changed hands and the original owner may not even know who owns it at that point in time. So, the recall notification gets thrown away with the junk mail and some owner out there continues to unknowingly drive an unsafe vehicle.  

Consumers continue to keep their vehicles longer and as those same vehicles can change hands multiple times this issue of older vehicles on the road then becomes especially noteworthy. Recalls increase in number and OEMs and dealers attempt to contact customers to get their recall repairs completed -- all while the NHTSA and legislators breathe down their necks. 

Let’s face it - many of the owners of these older vehicles patronize independent repair shops. Because the independents cannot repair these problems they have little incentive to make any effort to identify any recalls and certainly don’t want to risk losing business by referring customers to a franchised dealership. This means that between government, OEM and dealership records, as a group, we need to do everything we can to identify these 2nd, 3rd and even 4th (or more) generation owners to inform them that they are driving unsafe vehicles. It is important that we all do our utmost to compel them to come into the dealership and get the repairs completed. 

Some state DMV agencies are considering recall notification as part of the vehicle registration process. In Pennsylvania, legislation has been proposed that will require independent repair shops to notify owners of open recalls as part of the annual safety inspection. Until these reforms takes shape for consumers it’s up to the collective automotive industry to do what we can. 

Within the dealership community there is a unique opportunity to find these customers in your local market, notify them and gain their trust AND potential future business. I think it’s safe to say that nobody wants to put themselves or their families in danger by driving around in an unsafe vehicle. The entity that reaches them first with a recall notification and then services them well will be remembered. This is especially true for those that make it easy for the customer and provide an outstanding experience. There are many dealerships exploring ways to work with independent repair shops to create such an environment of trust when it comes to consumer safety.    

I am sure your dealership spends a lot of money on customer acquisition in both sales and service. Effective recall management and a comprehensive approach to owner identification make for the easiest and least expensive way to acquire service customers. You are also performing a valuable service for your local community.  

Yes, it’s a complicated puzzle that takes effort but, in the end, it’s worth it. 

By now, everyone has heard of the fiasco that is the Takata airbag recall. With millions of vehicles affected, many consumers have either had their airbag replaced, or are awaiting parts to do so. These anxious consumers simply want to know that the vehicle is safe to drive.  

Many of these consumers visit informational websites such as MotorSafety.org and plug in their VIN number to see if their vehicle has a recall. Some do not find out until they visit their local franchised dealer and, with a recall that poses such a threat to consumer safety, it’s almost presumed by all that the repairs are made without delay …well, not so fast! 

A recent news article details how some recalled airbags are slipping through the cracks and consumers are driving vehicles they think have good airbags when, in fact, their vehicle has airbags with an outstanding recall.  

This can occur in a couple different ways.  

1. A consumer buys a used vehicle that was in a past accident where the original airbag was deployed and was subsequently replaced with an airbag that has a recall on it. 

2.  The consumer’s airbag deploys and it gets replaced.  

In both scenarios, according to the article, these airbags tend to be replaced with recovered airbags from junkyards, because it costs considerably less than a new airbag. The problem is that most consumers and shops don’t think to check the replaced airbags for recalls. They are installed in the vehicle and the consumer drives home with a false sense of security. However, the replaced airbag could easily have a safety recall, which means that the consumer would be driving around – or buying – a vehicle with a dangerous airbag. Because these replaced airbags aren’t being tracked by anyone, there are probably tens of thousands of Takata airbags installed in vehicles that may never be identified and replaced with safe airbags.  

Let’s circle back around to what this tangled mess means to you. Simply stated, if you want to really make an impression on your customers, consider training your service staff and instituting a process where it’s assumed that every customer’s vehicle has a recall. Most customers buy their vehicle without asking questions about whether an airbag has been swapped out – they just don’t know. But that’s where a good service advisor can help identify a huge risk that is completely hidden from the consumer at present.  

Want to win a customer’s loyalty? Be proactive and ensure that their vehicle is safe. Imagine being able to identify a swapped airbag and informing the customer who had no idea. They would probably be appreciative that the dealership cared enough to check without being asked.  

Elevate your service advisor’s recall senses. This will help ensure that you have good inventory acquisitions, build customer trust and loyalty, and keep dangerous vehicles off the road that would otherwise never be identified, making the roads safer for everyone.   

A few seconds to ask the consumer whether the vehicle has been in an accident could save a life and create a loyal customer. If the customer is unaware of the vehicle’s history, then let them know that you’d like to provide them with peace of mind, given the potential hazard.   

The recall crisis has now reached the point that your service team’s assumption should be that the vehicle has a recall which may be hidden from view. Isn’t it better to be safe than sorry?  That’s our duty as an industry – to clean this mess up and to restore the consumer’s trust.

I’ve written a lot about recall awareness and how dealers can position themselves to be champions in their communities by treating recall customers differently -- applauding those who simply won’t sell a used vehicle with an open safety recall. I’ve also warned several times in past blogs that the NHTSA is not happy with recall compliance rates and that, eventually, legislators would be taking action to resolve the matter.  

Well, it looks like some state legislatures are now getting into the recall muck, starting with New York.  

A recent article in Automotive News reported that the New York Attorney General reached legal settlements with 104 dealerships that sold used cars with open recalls without disclosing this to their customers prior to the sale. 

While it may be a financial burden to sit on used vehicles with open recalls for months awaiting a repair, if the outcome of the settlement in New York spreads to other states, and/or is adopted by them, selling these used vehicles is going to become a lot harder.  

Here are the consequences these 104 dealerships agreed to in the settlement: 

1. Dealers must include enough information about their vehicles for sale online so that a consumer can check websites and information providers to identify if the vehicle has any open recalls.  

2. If the dealer advertises “in print or other media,” it must disclose in the ad that the vehicle has open recalls.  

3. Dealers must place decals on the windows of vehicles for sale on their lot which indicate the existence of any open recall and provide directions to consumers on how to check the vehicle’s status online.  

4. TWO DAYS BEFORE the dealership sells a car with an open safety recall, it must provide the consumer with a written recall status report and obtain “written acknowledgment” from the consumer.  

5. Dealers must notify any customer who purchased a vehicle with a still unrepaired safety recall from January 2016 to present. Franchised dealers also need to pay for up to 5 days in a loaner car should the repair take longer than a day.  

Think about these rules for a minute and let them sink in -- they may startle you. Remember – dealers AGREED to these rules!  

How much harder will it be to sell a used vehicle with an open recall and gain the customer’s confidence in the quality of used vehicles being sold? Without a doubt, used vehicles with open recalls will be much harder to sell to consumers. However, with the dealer’s reputation at stake, purposefully misleading consumers by not fully disclosing those open recalls is far more damaging to the long-term sustainability of a dealership. Trust is difficult to win back once lost. 

Imagine reading a newspaper ad full of used car disclaimers with open recalls. What about having to insert the fact vehicles have open recalls into your radio ads? Or what will it be like simply watching your customers’ faces when they walk onto your lot and see recall window decal notifications? 

Even if the customer is fine with all of this (which many won’t be), you still can’t sell them a car they want RIGHT NOW for TWO DAYS! I’m pretty sure that, even if you are adhering to all of the notification rules, the one thing that will hurt sales the most immediately is forcing the customer to wait two days. If they leave, we all know they are going to visit another dealership and probably buy a car there.  

These rules, in all practicality, force these 104 dealerships to essentially stop selling used cars with open recalls. Or, at the very minimum, cease advertising them on ANY MEDIUM (which includes the Internet).  

The writing is on the wall - legislation on both state and federal levels is coming. If the rules the Attorney General of New York got these dealerships to agree to are any indication of what is to come, you should be prepared for an increasingly difficult road in future sales of used cars with open safety recalls. The time to take a proactive stance on recall management is now.  Don’t wait for laws to be passed before your systems and staff are ready to effectively manage open recalls.