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Michael Phelan
Michael Phelan
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AutoNation Won’t Sell Recalled Vehicles

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Kudos to AutoNation, the country’s largest auto retailer, which announced on Tuesday that it will no longer sell any new or used vehicles under recall that have not been repaired.  It’s time for CarMax and the other major auto retailers to follow suit.  According to Auto Nation’s CEO, Mike Jackson:

“There’s no way to expect that customers would or should know of every safety recall on every vehicle they might purchase, so we will ensure that our vehicles have all recalls completed. “We make it our responsibility as a retailer to identify those vehicles and remove them from the market until their safety issues have been addressed.”

The move by AutoNation comes after a huge wave of GM and Chrysler recalls over the last two years, the most significant being the GM recall of about 2.5 million small cars from model years 2003 through 2007 that were equipped with defective ignition switches that could slip from the “on” to the “accessory” position, cutting off power to the vehicles other electrical systems, including power steering.  The defect was tied to 124 deaths.  In July, Fiat Chrysler was fined by the National Highway Traffic Safety Administration (NHTSA) up to $105 million in Chrylser recall- related penalties.
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Chrysler issued its own defective ignition switch recall, stating in a  6/3/2015 recall update that:

Chrysler has decided that a defect, which relates to motor vehicle safety, exists in 2005 through 2007 model year Jeep® Grand Cherokee and 2006 through 2007 Jeep® Commander vehicles.

The problem is…
Some Jeep Commander and Jeep Grand Cherokee vehicles may experience an unintended change in ignition switch position while driving which may result in loss of engine power, power steering, and braking assist increasing the risk of a crash and disabling one or more of the vehicle’s safety features including the frontal airbags.

The product defects leading to these recent recalls pose significant safety hazards to vehicle occupants, other motorists, and pedestrians.  Some auto retailers take the position that they are not responsible for ensuring that recall-related repairs are made to their inventory of vehicles, and that they are not responsible for warning their customers that the vehicle is subject to a pending recall.  AutoNation is taking the responsible positition, and is doing so at a significant cost.

The president of Consumers for Auto Reliability and Safety, Rosemary Shahan, was quoted in USA Today calling AutoNation’s move “a historic commitment to safety,” and stating that “This is a huge breakthrough, particularly since AutoNation’s CEO is speaking publicly about the responsibility of dealers to be part of the safety recall solution and to ensure that unsafe, recalled used cars are not only not sold to consumers, but also not sold at wholesale, until they are safe.”

AutoNation, which operates 293 dealer franchises across the country, said the decision will come at significant cost because it will retain more inventory while the recall-related repairs are completed than it would before the policy was implemented.

The program applies to AutoNation’s entire inventory, not just vehicles on the sales floor. The company has said it will not have any role in enabling these vehicles being on the road, including selling them at wholesale at used vehicle auctions or other markets.

Hey, CarMax, the ball is in your court!