• ETC
  • Jul 31, 2014

New cars under recall must be repaired before a dealer can sell them but used cars are under no such mandate.

When it comes to informing the car-buying public about potential safety hazards on used vehicles, there are two emerging schools of thought among used-car dealers.

In one camp: those who disclose as little as possible. Used-car giant CarMax leaves it to customers to check to see whether a car is under recall. Consumer groups filed a petition with the Federal Trade Commission last month, because they believe the lack of information amounts to deceptive advertising.

In the other: Honda, which has gone in the opposite direction. The company recently started disclosing possible recalls related to airbag malfunctions in certain vehicles. Honda is asking customers buying those used cars to sign a document that acknowledges they've been made aware of the issue. Buyers may be better informed, but such a signature could also shift liability away from the automaker.

It's a vexing issue on several fronts.

New cars under recall must be repaired before a dealer can sell them, under rules imposed by the National Highway Traffic Safety Administration. But used-car sellers are under no such mandate. Honda's disclosure helps consumers understand their new purchase may contain a potentially lethal defect, but some are worried that it could frighten customers away or expose dealerships to greater liability.
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"They're taking advantage of the fact the consumer doesn't expect a Honda dealer to hook them into such a risky car."

Eric Chase, a lawyer who often represents car dealers, tells Automotive News that the document, called the "Airbag Inflator Recall Disclosure and Acknowledgement," is a big problem.

"If a dealer called me and said, 'We're talking about something that is under recall but we can't repair it and it's dangerous to the point we'd have to warn them about death,' I'd say, 'you've got to do everything you legally can to make sure a consumer does not get behind that wheel.'"

Consumer advocates don't like the disclosure either. They say it's designed to limit the company's liability from lawsuits related to the defect, which can cause the airbags to explode instead of normally deploying in an accident, showering occupants with a potentially deadly amount of metal shrapnel and debris. They want Honda – and other automakers affected by the same problem – to stop selling them until repairs are completed.

"I think this form of disclosure is probably worse than nothing," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. "They're taking advantage of the fact the consumer doesn't expect a Honda dealer to hook them into such a risky car. ... The reality is that it will be in a stack of papers that a customer is signing hours into the buying process."

Even once the recall comes, it may not encompass all the affected cars.

Part of the complication is the affected used Honda cars aren't under recall – yet. Honda expects some of them will be soon. The company is currently compiling a list of Vehicle Identification Numbers for affected cars, and a recall will occur "within the next couple of weeks," Honda spokesperson Chris Martin tells Autoblog.

Even once the recall comes, it may not encompass all the affected cars. The defect behind the exploding airbags is one that automakers have struggled with fully identifying for more than a decade. Starting in 2001, several automakers have issued more than 20 separate recalls for millions of these airbags, which are manufactured by global supplier Takata. Exploding airbags are responsible for at least two deaths in the US, and scores of injuries.

Last month, BMW, Chrysler, Ford, Honda, Mazda, Nissan and Toyota issued eight recalls for 2.1 million vehicles that had Takata airbags installed. The automakers didn't recall vehicles from across the country; they were regional in nature.

High humidity is thought to contribute to the problem, so automakers only recalled vehicles either originally sold or currently registered in Florida, the US Virgin Islands, Puerto Rico and Hawaii. Honda went beyond that scope and added Alabama, Georgia, Louisiana, Mississippi, South Carolina and Texas.

The cars are some of Honda's best sellers, and if used-car buyers balk, the document could hurt sales.

In its ongoing review of Vehicle Identification Numbers, Honda is matching the ID tags to cars that may have eventually been sold outside those states. In the meantime, it is asking dealers to have customers sign the disclosure.

Cars affected span a decade. In certain model years, they include the Honda Accord, Civic, Element, Odyssey, Pilot and Ridgeline pickup. Acura models affected include the MDX, TL, CL and RL. The cars represent some of Honda's best-selling cars, and if used-car buyers balk, the document could hurt sales.

"It certainly might, but we're not interested in trying to cover any of this up for a customer," Martin said. "It's not in our best interest to have a customer buy this car and then take it later as a surprise. ... We're making sure customers are fully aware of the situation, and bring it in for repairs when parts are available."



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    • 1 Second Ago
  • 8 Comments
      Larry Litmanen
      • 4 Months Ago
      If the dealer knows that he has to tell the buyer that there's a recall on the car they will just fix it before selling it. If car is from a different brand they can simply make an appointment and get it fixed and sell the car. I think Honda is right on this one.
        carnut0913
        • 4 Months Ago
        @Larry Litmanen
        oh? and what about recalls that are announced but its 6 weeks before the parts come in? Dealer Z is supposed to hold on to the car until Mftr A ships the part and Dealer B can fit them in? If you buy a used car, the first thing ou should do is check for recalls with the local mftr's dealer. they should have a database to check against, no?
          Larry Litmanen
          • 4 Months Ago
          @carnut0913
          Carnut, what you don't understand is how REAL world works. Yes people SHOULD check but they do not, so if the car fails they end up suing dealerships or manufacturers. Even if manufacturer wins they still have to spend money on the lawyer (some of them make few K an hour) It is easier to sell a car without these recall issues than have someone get hurt and deal with that. Look at GM, many here say well the driver is at fault by putting something on the keychain.......................does that help GM how that they may or may not be responsible, last time i checked GM already lost BILLION in money and took a hit to the brand name. Reality and a make believe world where everyone takes responsibility are two different things.
      Andre Neves
      • 4 Months Ago
      Next thing you know, Toyota will be asking customers of their new cars to sign an agreement that they aren't responsible for recalls after the sale.
      jazzyhands
      • 4 Months Ago
      I will have to parrot the article's attorney message to these used car dealers: selling unreasonably dangerous products is short-sighted and subjects your business probable wrongful death and products liability lawsuits. Even if a commercial seller of these vehicles could shield their liability, resulting in a win via disclaimer document, a phyric victory results. Honestly, ask yourselves if any of you would consider buying from a dealership who knowingly sold unrepaired and unreasonanably dangerous products.
      Parris Boyd
      • 4 Months Ago
      This corporate-controlled government looks out for its crooked friends in the auto industry instead of consumers. Dealers simply shouldn't be allowed to sell a vehicle - used or new - with a known safety defect. I've been blogging about the Washington gang's efforts to help automakers conceal defects - search "Beware of Toyota. Their next victim may be YOU..."
      Alex
      • 23 Days Ago

      Honda's demand of forfeiture of their liability is criminal and should be prosecuted to its fullest degree. Perhaps they thought if one is gullible enough to buy Honda/Acura, they would still sign such release of liability too.

      I have never bought Honda or Acura because their technology has always been decades behind the curve. They use fraudulent advertisement to entice gullible customers. The latest report of them under-reporting deadly accidents and previous lawsuits regarding their false claims on hybrid gas mileage are indication of unscrupulous nature of their doing business.