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Safety Recalls: Think You’re Covered?

Watch Out for the Different Severities of Safety Recalls

We have heard from dealers who want a severity rating for safety recalls, such as a “one through five” rating system. They’ve even asked if we would set one up. Until the federal government changes the nature of recall classification, our answer has been and will be an emphatic no. That would be putting ourselves, our clients and their customers and drivers at serious risk of injury or death.

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One example of a perceived “low severity” recall that could turn out to have terrible consequences is: “This safety recall is just a sticker that needs to go into the manual. I can just sell it without disclosure.” 

If the sticker is for a certain (corrected) tire pressure, and if someone doesn’t know about it, they could have a blowout and someone could be injured. They will come to you for compensation. 

There are different types of recalls. For example:
• Safety recall
• Service campaigns
• Emission recalls
• Customer satisfaction campaigns
• Technical service bulletins, etc.

However, a safety recall is a Safety Recall. Full stop.

Safety recalls are the types of recalls that can injure or kill someone. They are the types that carry heavy penalties, and where the industry focuses its efforts to be as diligent as possible.

That said, there are different “subtypes” (not “severities”) of safety recalls. Subtypes may make requirements — and legal recourse — even more stringent. Two subtypes of particular interest include:

Noncompliant Safety Recall

Certain safety recalls are noncompliant with the federal government’s Federal Motor Vehicle Safety Standard (FMVSS). California’s Motor Vehicle Safety Code prohibits dealers from selling or offering for sale any vehicle with an unrepaired noncompliant (FMVSS) safety recall. This is true for in-brand and off-brand.

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Recalls Under Stop Sale and Do Not Drive Orders

What is a dealer or fleet manager to do with vehicles that have a safety recall under a Stop Sale or Do Not Drive order? What do these orders even mean?

Ford, through its DCS, OASIS, will instruct its franchised Ford/Lincoln dealerships that all new vehicles with an open safety recall and some used vehicles are under “Delivery Hold.” GM’s Global Connect might say “Vehicles Must Be Held and Not Delivered.” OK, isn’t that clear? Yes and no.

All new vehicles with an open safety recall are under a Do Not Deliver instruction, because it is illegal to sell new vehicles with an open safety recall. The OEM may decide that vehicles with other recalls must likewise be held. That does not mean it is a Stop Sale recall. Clear as mud?

There are certain safety recalls where the OEM tells NHTSA — via defined forms — that a safety recall is under a Stop Sale or Do Not Drive order. These are not the same thing, and only very few are listed by the OEM as both. Nor are they necessarily the same as Delivery Hold instructions, although they could overlap.

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Although this may be confusing, companies that want to minimize their safety recall liability should seriously consider knowing the Stop Sale and Do Not Drive status of the vehicles in their inventory on a recall-by-recall basis per OEMs’ instructions for vehicles with safety recalls under Stop Sale or Do Not Drive for off-brand.

But Wait, It Gets More Confusing

For off-brand vehicles (for franchised dealers), it is especially difficult because a Toyota dealer does not have access to Ford’s DCS, OASIS. And a GM dealer does not have access to SubaruNet. Additionally, NHTSA’s recall look-up, SaferCar.gov’s VIN look-up and OEMs’ VIN-verification websites almost never list vehicles’ safety recalls as being under Stop Sale or Do Not Drive orders, even when they are. What is a dealer to do?

Independent dealers, most rental car companies and fleets have no access to any DCS, which means it is next to impossible to know what is really going on relative to safety recalls. Think of it in terms of the Venn diagram above. 

The delays in the safety recall ecosystem for identifying Stop Sale and Do Not Drive recalls are worse than the delays from OEMs and NHTSA announcing recalls and even the propagation of recall repairs throughout OEMs’ systems.

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In 2020, every minute of time and every dollar wasted counts. 

Remember: Manual Processes = Missed Recalls = Missed Profits & Higher Liability.

It is almost impossible to generate the most warranty revenue and have the lowest liability possible and know if off-brand vehicles have Stop Sale or Do Not Drive orders without automated, multi-sourced best-in-class safety recall services.

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