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The Problems Associated With Car Recalls

» Posted July 15, 2016Resources | Share This Post

Millions of vehicles have been recalled in recent years, some because of serious safety issues that have led to fatalities.  Auto Remarketing reports that there are lingering consequences associated with the fact that so many cars have had such serious problems. 

Car dealers are faced with consumer suspicions about used cars that may have been subject to recalls. Used car dealers are also subject to limitations on their marketing, which stems from agreements reached between car manufacturers and the government.

The problems with the certified pre-owned market are harming auto sellers, as well as consumers. Those who own cars that were recalled could find themselves with a vehicle that has a low trade-in value.

Unfortunately, some consumers will have lost the funds that were spent on the car because its resale value has declined so much more than it would have if the recall had not happened. Car buyers may also face more challenges in finding a quality pre-owned car because of the issues that certified pre-owned dealers are having with their inventory.

The problems with the used car market serve as yet another reminder that cars with defects are still being released into the marketplace and sold to the public. Car manufacturers have a responsibility to produce safe products that work as intended, and car owners suffer when they don't. A California lemon law attorney can provide assistance to eligible car owners if their particular issues entitle them to a remedy from the car maker.

Vehicle Recalls Are Hurting the Pre-Owned Market

In response to issues with General Motors (GM) vehicles, the Federal Trade Commission (FTC) settled with GM, Jim Koons Management and Lithia Motors. These car sellers had touted rigorous inspections for vehicles, but had not declared that some of the used vehicle models they were selling had been subject to safety recalls that had not yet been repaired.

The FTC took action and the proposed consent orders between the FTC and dealers can remain in effect for 20 years. These consent orders prohibit car sellers from claiming their used cars have been subject to rigorous inspection, unless the companies disclose all recalls and/or can confirm the cars are not subject to an un-repaired recall.

Under these consent decrees, it will be much more difficult to advertise certified pre-owned vehicles. Dealers will either have to cure the recall or give car shoppers a copy of the recall certificate. Either of these things will be costly because the car will likely sell for a lower value due to the recall certificate and/or because dealers will now have to spend time and money making sure that the recalls are cured on all of the cars they sell.

In addition to the GM cars, problems with Takata Airbags could also be an issue, as there are close to 60 million units that have these airbags. If all of these cars are subject to recall and car dealers have to alert customers or fix the airbag issue, this means millions more used cars will be less valuable to dealers.

Car makers need to ensure they do not cause financial loss to others by releasing vehicles with problems. If you have a car with issues and you believe the lemon law could provide you with a remedy, contact a lemon law attorney today.

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Posted By: Clay Coker