Below is a summary of key federal requirements and advice all dealerships should review:

Summary / Background on Federal Requirements

Sale of affected New Vehicles. It is a violation of federal law to sell a new motor vehicle on which recall replacements and repairs have not been done. NHTSA has made clear that it is not appropriate to deliver a vehicle with a promise to repair it when the customer can return. A new vehicle subject to recall, but not yet sold to a consumer, should be removed from sale as quickly as possible. Federal law makes clear that a recalled product cannot be sold until remedied.

Parts. Replacement motor vehicle equipment in a dealer's parts inventory is under the same rule. If there is a recall affecting parts - in this case accelerator pedals -- in the inventory of a dealer, those parts must be removed from sale.

Used Cars. Sales of Toyota used cars subject to recall pose a potential problem for ALL dealers. While the law does not specifically penalize sale of a used car subject to a recall as it does sale of a new car, a dealer who sells a used car that has an unremedied recall defect runs the risk of significant liability. If there is an accident related to the unremedied defect, the dealer is likely to see a lawsuit for negligence for selling the vehicle with a defect it knew or should have known was subject to recall. Dealers franchised for the affected brand may be held to a higher standard, but in a recall this broad and this highly publicized, all dealers are impacted.
In publications, NHTSA has advised manufacturers that they should "encourage" their franchised dealers to ensure that the used vehicles of the manufacturer brand have all applicable recall work completed before resale to the public.

There are many unresolved questions related to this recall, for dealers, consumers, and for Toyota.  As more information becomes available, we will continue to provide updates. 


If you have questions on any legal or regulatory topic, please contact:

Colorado Automobile Dealers Association
 290 East Speer Boulevard Denver, CO  80203
 Telephone:  303.831.1722  |  Facsimile: 303.831.4205