FREDERICK, MD - On January 26, Toyota Motor Sales (TMS) announced they were instructing all Toyota dealers to temporarily suspend sales of eight models involved in the recall for sticking accelerator pedals. In response to TMS’ announcement, which at the time was an unprecedented event, the National Auto Auction Association (NAAA) recommended that all member auctions immediately halt the sales of these vehicles until the recall issues were resolved.
On March 5, General Motors instructed their dealers to “Stop the delivery of all new and used 2005-2010 Chevrolet Cobalts and 2007-2010 Pontiac G5s that may be in dealership new or used vehicle inventory” until the Steering Recall was completed. In response to this announcement the National Auto Auction Association (NAAA) recommended that all member auctions immediately halt the sales of these vehicles until the recall issues were resolved.
These actions that were taken by NAAA because of the perceived safety issues pertaining to the vehicles involved have caused a great deal of confusion in the wholesale remarketing industry related to manufacturers’ recalls.
Based on the opinion of counsel, it is the position of The NAAA that vehicles should not be withheld from sale in dealer-only sales at its Member Auctions solely because of the existence of open manufacturers’ recalls. Dealers should be aware of the risks involved in purchasing vehicles in the wholesale market and auctions cannot realistically be expected to monitor the recall status of every vehicle that is offered for sale.