Manufacturers and Dealers Must Resolve Recall Cost Disputes
The friction between automakers and U.S. dealers over which is responsible for expenses related to vehicle recalls should hardly be a surprise.
Amid a record run in U.S. recalls, the rapidly mounting costs of millions more cases involving potentially defective Takata airbag inflators make such conflict almost inevitable.
Manufacturers and franchised dealers have a long history of jostling over recall costs. The basic pattern that has emerged is for dealers to fix recalled autos and automakers to pay dealers for the service.
But the Takata crisis creates new wrinkles based on the difference in recalls of new and used vehicles. Federal law bars the sale of new vehicles with pending recalls until they are fixed and requires the manufacturer to compensate the dealer if it can't provide parts. But there's no such requirement regarding used vehicles. Various manufacturers have imposed different policies about selling unrepaired used vehicles, and the dispute is being taken up by state legislatures.
A Virginia law taking effect in July, for example, requires monthly compensation to dealers holding recalled vehicles that cannot be immediately fixed if a manufacturer would penalize dealers for selling them.
With more state legislation pending, dealers and automakers should resolve their recall differences to avoid more serious breaches in relationships. Automakers and dealers need each other.
This flare-up is a reminder that the U.S. recall system continues to function poorly, with massive delays in notifying owners, producing replacement parts, identifying which recalls are urgent and completing repairs. The sooner manufacturers, regulators, dealers, independent garages and Congress tackle a comprehensive overhaul to protect U.S. motorists, the better.
But until then, automakers and dealers should work harder to find common ground. Ultimately, manufacturers are responsible for fixing flaws in the vehicles they produce, but everybody should focus on protecting the public.
This article originally appeared on autonews.