Recalls continue to be a challenge for automotive manufacturers, dealers and consumers alike, as nearly 20% of all the vehicles on the road have an unrepaired recall. That’s about 50 million vehicles with potentially life-threatening safety issues.
For dealers, these vehicles can represent a significant liability issue and financial risk. It’s illegal to sell a new vehicle with an open recall and, in many states, an open recall on a used vehicle must be disclosed at the time of sale. Further, the FTC can fine dealers for selling Certified Pre-Owned vehicles with open safety recalls, even in the absence of laws prohibiting the sale of used vehicles with recalls. Failure by dealers to meet these standards opens them to substantial risk and can literally put their customers’ lives in jeopardy.
And for consumers? Many are completely unaware they have a vehicle with an open recall, particularly if it’s a used vehicle with more than one previous owner.
The vehicle manufacturers and NHTSA are certainly driven to make vehicles safe and protect consumers, and there are processes and requirements for notifications and tracking progress. They take a macro-level view, measuring success by how many vehicle-recall repairs are completed each year.
However, auto dealers are on a different timetable. If they have a vehicle in their inventory, dealers need to know immediately if it has an open recall. If they don’t, it’s possible they could sell a vehicle with an open recall without even knowing it.
In-Transit Vehicles: A Great Time to Catch Open Recalls
In today’s vehicle sales climate, many dealerships are actively selling vehicles that have yet to arrive from the factory. This contrasts with past practices when inventory was plentiful and more than enough to meet consumer demand.
Listing and selling in-transit vehicles increase the need for early identification of recalls. Customers expect to pick up a vehicle when it arrives at the dealership. If a recall is identified for an in-transit vehicle, it is important for the dealer to be prepared to repair it upon arrival. Quickly repairing the vehicle will help avoid delivery delays and customer dissatisfaction.
If dealers can track, list and sell in-transit vehicles, why not check for recalls, as well? Certainly, dealers can continually check with their OEM dealer communication system for recalls on incoming vehicles, but do they have time to do so for each vehicle every day? While at least one OEM is proactively providing dealers with notifications of recalls on inbound vehicles, for the most part it is left up to the dealerships to check.
Much like an emergency room can prep for an incoming patient arriving by ambulance, a dealer can prepare for the recall repair before the vehicle even arrives on the carrier. Parts can be ordered, shop time and technicians can be scheduled, and customers can be notified if necessary. Being proactive ensures the least impact to customer satisfaction as well as quicker warranty reimbursement revenue opportunity. Even if the vehicle is not pre-sold in-transit, getting recalls identified and repaired immediately upon arrival gets the vehicle to the showroom floor faster and ensures a safe vehicle awaits a prospective customer.
A key factor is implementing an automated system to streamline and ensure consistency while avoiding errors. If dealers try to rely on their own manpower to pull VINs and check them manually against various recall information sources, it will be an onerous burden. It will lead to lost time, lost productivity, lost money, missed recalls and an increase in liability and customer satisfaction issues.
AutoAp research shows dealers who automate the vehicle-recall identification and reporting process are far more successful in recognizing and rectifying open recalls.
Adding in-transit vehicle VIN checks is a logical step of the recall automation process. Dealers who are already taking advantage of this process will have an advantage over their competitors who do not.
Mark Allen (pictured, above left) is president of AutoAp, a provider of safety-recall management software.