12 September 2016

Auto Dealers Alerted to Consequences of 800,000 Vehicles Recall over Safety Issues

Brian Smith
Brian Smith

Australia’s auto dealers need to be aware of the consequences of a staggering 800,000 vehicle safety recall.

As news media have reported, more cars have been recalled this year than any other time in Australian automotive history.  The recalls come on the back of what is reported, by the Federal Chamber of Automotive Industries, as a bumper month for new vehicle sales in June, and they also come as the industry is still struggling to keep up with replacing potentially deadly Takata airbags in 1.3 million cars in Australia that can spray shrapnel if deployed in a crash.

Managing the sheer volume of vehicles recalled is likely to have the potential to become a logistical nightmare for Australian motor dealers.

While delays have been flagged as an issue in arranging replacement parts for the recalled vehicles, dealers should keep and manage succinct records of any contact made with the owners of affected vehicles and keep concise details of all scheduled repair appointments and recall arrangements in carrying out the recall repairs.

This all accumulates into difficult times for automotive dealers and thus all motor vehicle dealers are urged to ensure they keep detailed notes for all trade-in and used vehicle sale transactions if the vehicles are among the models affected, or any vehicle recall, to avoid downstream liability issues and thereby to cover yourselves legally.  I emphasise that it’s going to be all about covering yourself against liability issues.

If you are selling a used vehicle (including a trade-in vehicle) included in a recall, but not yet rectified, you must ensure you make a full disclosure of this fact to buyer.

Dealers will navigate a delicate path going forward.  If you offer too little for a trade-in the customer may opt instead to sell the vehicle privately, and as a consequence, you may risk losing a new car sale in addition to the used car sale.

Having regard to the total picture nobody really knows what the full legal impact of such a huge recall on the auto trades will be: it is uncharted territory in some ways.

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