Tuesday, January 26, 2010
Toyota has announced that dealers must suspend sales of certain model new Toyota vehicles as a result of its voluntary safety recall involving potentially sticking accelerator pedals.
Toyota dealers should carefully review all communications from Toyota on this subject and should obey the sales suspension requirement. Dealers have obligations in the event of a recall. Here is a summary.
Sale of affected New Vehicles. It is a violation of federal law to sell a new motor vehicle on which recall replacements and repairs have not been done. The National Highway Transportation Safety Administration has made clear that it is not appropriate to deliver a vehicle with a promise to repair it when the customer can return. A new vehicle subject to recall, but not yet sold to a consumer, should be removed from sale as quickly as possible. Federal law makes clear that a recalled product cannot be sold until remedied.
Parts. Replacement motor vehicle equipment in a dealer's parts inventory is under the same rule. If there is a recall affecting parts - in this case accelerator pedals -- in the inventory of a dealer, those parts must be removed from sale.
Used Cars. Sales of Toyota used cars subject to recall pose a potential problem for Toyota dealers. While the law does not specifically penalize sale of a used car subject to a recall as it does sale of a new car, a dealer who sells a used car of the brand for which it holds a franchise that has an unremedied recall defect runs the risk of significant liability. If there is an accident related to the unremedied defect, the dealer is likely to see a lawsuit for negligence for selling the vehicle with a defect it knew or should have known was subject to recall
In publications, NHTSA has advised manufacturers that they should "encourage" their franchised dealers to ensure that the used vehicles of the manufacturer brand have all applicable recall work completed before resale to the public.
What Should A Toyota Dealer Do? Any recall notification material you receive should be forwarded to the sales department, to the parts department, and to the service department.
- In the sales department, the management should determine whether the dealership stocks any new Toyota vehicles subject to the recall. Halt sales of those vehicles until the recall repairs are performed according to the directions of Toyota.
- In the parts department, determine whether affected accelerator pedals are in inventory. They should be immediately removed from sale.
- In the service department, a procedure must be implemented to carefully and appropriately handle customer requests for performance of recall repairs and to handle repairs of dealer inventory.
- Used Toyota vehicles of the models affected by the recall should be put on hold until the recall obligations have been met. The liability for selling a vehicle with an unrepaired recall that is then in an accident involving death or serious injury can be devastating for a dealer.