First, the startling: The safety recall ecosystem is broken.
Additionally, at any given time, 20-25% of all vehicles on the road have one or more open recalls.
As disturbing, we’ve seen error rates in other sources for recall data/notification of up to 30%. We constantly find significant recall publication delays with NHTSA and even the OEMs, and all other sources.
This impacts dealerships of all sizes, brands and locations through liability and compliance impacts. They often buy and sell vehicles with open safety recalls and do not know it.
Fortunately, recall verification and monitoring data science from AutoAp integrated with reconditioning identifies and catches all open recalls and often reports them before OEMs notify their dealers.
Dealers no longer need to suffer the risk of poor recall identification and reporting — recall status can be obtained on-demand to capture profit opportunities as you acquire vehicles, as recalls impact cars already in inventory — for compliance, and in post-sale recall services to boost revenue.
1. When buying an otherwise-clean, low-mileage vehicle with an open safety recall.
Your costs can increase dramatically when you buy someone else’s problem — especially if you don’t know it when you’re making a buying decision. If you don’t have that information at your fingertips, then you are buying blind.
Imagine that the vehicle is off-brand and has a safety recall under a Stop Sale order. If you’re in Tennessee or Pennsylvania (or a state with a law headed that way), you cannot sell it. That’s a profit-killer!
If the recall has a remedy (and parts available) and is in-brand, knowing the warranty reimbursement opportunities provides better buying knowledge.
2. In inventory, where the recall notification was announced after vehicle acquisition.
The most obvious is the additional warranty reimbursement from “found” recalls. However, there are more impacts to be considered when weighing whether to automate recall management or not. More opportunities can be found by automating a “find recalls” service.
The most obvious is the additional warranty reimbursement from “found” recalls. However, there are more impacts to be considered when weighing whether to automate recall management or not. Just some of these potential impacts are:
- Costs and time lost, trying to manage recalls manually
- Service-bay inefficiencies
- Lost sales due to not knowing until retailing vehicles
- Additional warranty reimbursement
- Holding costs: vehicles with and without remedy
- Holding costs: in-brand and off-brand vehicles
- Holding costs: vehicles with stop-sale recalls
- Acquisition costs
3. Post-sale when you continually track your customers’ vehicles for safety recalls.
There’s money in the VINs! Setting up a weekly report, where you can continually track your customers’ vehicles for safety recalls, can provide a steady stream of profit possibilities. If you think of these vehicles as your “sold inventory,” then you can start a similar process to entice your customers to return.
With a 70% defection rate (to independent repair shops), bringing back your customers to have recall issues addressed not only increases your CSI/CX scores but your customers may be enticed to come in more regularly since you are taking such great care by watching out for them.
Additional preventive maintenance and/or repair work will likely be requested by your customers, so the total customer pay maybe another 50-100% in addition to the average warranty reimbursement of about $396.
If you think your dealership is covered, find out — visit AutoAp to obtain a report of findings, along with your Safety Recall Liability Score and financial benefits of automated safety recall management by answering just six questions.