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Sales Recall Alert Sent Earlier Today
Yesterday Toyota Motor Sales instructed its dealers to temporarily suspend sales of eight models involved in the recall related to the issue of the sticking accelerator pedal. This recall is separate from the recall related to the on-going recall of Toyota and Lexus vehicles to reduce the risk of pedal entrapment by incorrect or out of place accessory floor mats. Approximately 1.7 million Toyota Division vehicles are subject to both separate recall actions. More specifics on the recall are provided below.
The Toyota vehicle recall impacts all NHADA members, new or used. Toyota has instructed its franchised dealers to cease selling vehicles. Federal law prohibits new vehicle dealerships from selling a new vehicle that does not meet federal safety standards or that has been the subject of a manufacturer or NHTSA recall notice (49 CFR 573.11, 49 USC § 30112). The federal law is very specific and does not apply to every recall that occurs. As of this writing, I am not sure if Toyota's recall falls directly under this standard; however Toyota has made it clear that its dealers need to halt selling the vehicles in question.
The above cited federal regulation and statute do not apply to the sale of used vehicles. Specifically, 49 USC § 30112 provides that the prohibition does not apply to "the sale, offer for sale, or introduction or delivery for introduction in interstate commerce of a motor vehicle or motor vehicle equipment after the first purchase of the vehicle." In addition, 49 CFR 573.11 specifies that dealers may only sell a new vehicle subject to a manufacturer or NHTSA recall after the defect or nonconformity is remedied. Dealers may still offer such a vehicle for sale.
Though it appears clear dealers are not prohibited from selling used vehicles that are subject to the recall, the question remains whether or not the sales should occur, especially if accident, injury, or death should occur. At the very least, before selling a used Toyota under recall, dealers should provide written notification of the recall with a customer signature verifying receipt of the notification. By the end of the day today, NHADA will provide its members with a sample notice to be used in sales of used vehicles under recall.
Toyota's accelerator pedal recall and suspension of sales involves the following vehicles:
2009-2010 RAV4,
2009-2010 Corolla,
2009-2010 Matrix,
2005-2010 Avalon,
Certain 2007-2010 Camry,
2010 Highlander,
2007-2010 Tundra,
2008-2010 Sequoia
No Lexus Division or Scion vehicles are affected by these actions. Also not affected are Toyota Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, which will remain for sale.
Due to the sales suspension, Toyota is expected to stop producing vehicles on North American production lines involving the Corolla, Matrix, RAV4, Sequoia, Highlander, Avalon, and Tundra.
NADA was in contact with Toyota throughout the day yesterday urging Toyota to clarify the situation for its dealers. NADA is continuing to work with Toyota to identify a plan to help dealers get through this. In the meantime, NADA is encouraging Toyota dealers to check to see if they have business interruption insurance, more specifically Contingent Business Interruption. Such a policy is designed to provide coverage when you have to suspend your business operations as a result of a covered loss to your independent supplier.
Here is a link to toyota's corporate press site with info:
http://pressroom.toyota.com/pr/tms/toyota/toyota-consumer-safety-advisory-102572.aspx
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