Closing the Gap on Open Recalls
- 50 million cars in the U.S. have an open recall.
- Focus on safety and liability to get customers in your store.
Right now, over 50 million cars on the road in the U.S. have an open recall, according to CARFAX. Even though the NHTSA requires manufacturers to send recall notices, customers aren’t responding, and they aren’t coming into the dealership. Why? One, vehicle ownership has changed and the message is irrelevant, or two, consumers are so inundated with emails and mailers they simply delete or throw stuff like that away.
While safety is the concern for consumers, there’s also risk for the dealership. One Texas dealership was sued earlier this year for not replacing a Takata airbag on a vehicle before they sold it. That vehicle was later involved in an accident in which the airbag injured someone in the car. A New York dealership is also under investigation for selling a 2021 vehicle with an open recall. The case is still pending, but the government is cracking down on regulations to protect consumers. Dealerships that sell vehicles to consumers with open recalls can face penalties from the government and the OEM, including fines up to $6,000 per offense.
How should your dealership handle open recalls with both safety and liability on the line?
For starters, focus on your own marketing. Manufacturer recall notices are failing to bring customers in, so you need to get their attention. Manufacturer notices instruct owners to visit any local dealer. Capitalize on this by reaching out to affected customers through email, direct mail, or even social media so they know your dealership is equipped to fix their recall issue. This is an effective way to bring customers to your dealership for repairs.
If you want to stand out from all the other “junk” consumers receive, use attention-grabbing designs and send targeted messages about their exact recall. You can also consolidate recalls attached to the same VIN so you’re not hitting them with multiple, disparate messages. To increase your success, follow up with phone calls to customers who aren’t responding.
Another way to improve your success on open recalls is a comprehensive recall database linked to your DMS that helps identify, alert, and prioritize open recalls. Whether a VIN is added in F&I or desking, service, or even accounting, recall information is gathered in seconds. Look for a solution that provides:
- Recall descriptions
- Remedies for the problem
- Risk ranking
- Recall type
- Parts availability
- Labor time
- Reimbursement amounts
Recalls can make consumers nervous, so the more information you provide upfront, especially for someone who’s present with you in the dealership, the more likely they are to move forward on the repairs. If you can present the recall holistically, it puts their mind at ease knowing you are on their side, despite the scariness of the situation.
As vehicles continue to get more complex, recalls in general are climbing. From 2020 to 2021, we saw a 39% increase. Most are tech-related, not just parts-related1, so this becomes even harder for consumers to understand.
Leverage routine service appointments to identify these vehicles. Coach your service advisors on the value of open recalls and ensure your technicians are performing thorough multi-point inspections. Not only do you increase trust and loyalty with your customers, but there are benefits to offering additional services as well – 58% of repair orders derived from an open recall have additional customer pay work tied to them2.
As long as you provide quick and complete information to the consumer, you are bettering the safety of your customers and the limiting the liability for your dealership.
1 2021 State of Recalls Study, Recall Masters
2 Recall Masters