It doesn’t take much effort to recognize and appreciate that recalls are significantly increasing for West Virginia dealers. You already know that selling customers safe, reliable transportation is one of the best parts of what we do — and it’s also one of the smartest ways to protect your business. When a safety recall pops up, it can feel like a curveball, but the rules are fairly simple. Let’s talk plainly about what federal law (and common sense) expects when you’re selling new or used vehicles with an open recall, plus the government tools that make checking them a breeze. NEW VEHICLES: NO EXCEPTIONS — FIX IT FIRST Here’s the bottom line for any new car or truck on your lot: You simply cannot sell, offer for sale, or deliver it if it has an open safety recall. Federal law is clear on this point, and NHTSA enforces it. That means the recall repair has to be completed before the customer drives off the lot — no ifs, ands, or buts. Fines for violations of this rule range from $21,000 to $26,000 per vehicle. The good news? Manufacturers are required to notify you right away, send the parts (or tell you when they’ll be available), and pay you the warranty rate for the labor and parts. If a recall drags on and you’re stuck with floor-plan interest costs because parts aren’t available, the National Traffic and Motor Vehicle Safety Act gives the new motor vehicle dealer a path to recover those floor-plan costs. This is typically a rate based upon what your floor plan lender is charging, starting from receipt of the stop-sale notice until the remedy is available, the vehicle is repurchased, or it can be sold. (See 49 U.S.C. § 30120.) Bottom line: Hold the vehicle, get it fixed, and everyone stays safe and compliant. It’s not worth the risk of fines or headaches to do anything else. I appreciate that manufacturers will attempt to avoid warranty costs by exchanging parts, reducing the cost of the parts and reducing the alleged allotted repair time, but that is a topic for another time. But please know that your West Virginia franchise law does provide protections for this specific instance. USED VEHICLES: MORE FLEXIBILITY, BUT USE GOOD JUDGMENT Used cars are a different story. Neither federal law nor West Virginia law prohibits you from selling a pre-owned vehicle that has an open recall. You’re not required to fix it before the sale, and there’s no automatic legal duty to disclose every single one. That said, we all know that “legal” and “smart” aren’t always the same thing. If the used vehicle is the same make and model line you sell new, think twice before sending it out with a safety-related recall open — especially anything involving brakes, airbags, steering or fuel systems. Those deserve extra caution because customer safety, your reputation (and your service department’s relationship with customers), and legal exposure are on the line. We cannot COUNSELOR’S CORNER Navigating Vehicle Recalls A STRAIGHTFORWARD GUIDE FOR WEST VIRGINIA DEALERS Johnnie Brown, Esq. Pullin, Fowler, Flanagan, Brown & Poe PLLC WVADA NEWS 16
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