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Toyota accelerator pedal recall forces all dealers to hit the brakes

November 10, 2010
 Toyota’s Jan. 21 recall of 2.3 million vehicles impacts more than just Toyota dealers. Any dealer with used Toyotas that are part of the recall are strongly advised NOT to sell affected Toyota vehicles unless or until the recall work has been completed.

The recall involves fixing accelerator pedals in certain Toyota Division vehicles; Lexus Division and Scion vehicles are not part of the recall. Toyota engineers developed a reinforcement to the pedal assembly that eliminates the excess friction that caused some pedals to stick. Toyota also developed an effective solution for vehicles in production.

Parts to reinforce the pedals are being shipped to Toyota dealers, and dealer training is under way.

The federal Motor Vehicle Safety Act does not specifically prohibit the sale of a used vehicle that is subject to a manufacturer’s recall. But a dealer who sells a used vehicle with an uncorrected recall defect runs the risk of significant liability, in the event of personal injury involving an accident related to the uncorrected defect.

Dealers in such cases can be sued for negligence for selling the vehicle with a defect they knew (or should have known) was subject to a manufacturer’s recall.

The National Highway Traffic Safety Administration has advised manufacturers to "encourage" their dealers to ensure that used vehicles subject to a manufacturer’s recall have all applicable recall work completed before selling such vehicles to the public.

Under Illliois law, the sale of a used vehicle without disclosure to a consumer of a "material defect"—such as an uncorrected manufacturer’s recall—may constitute consumer fraud.

However, if a dealer nonetheless chooses to sell a used vehicle subject to the recall, the CATA strongly suggests the dealer have the customer sign a Disclosure Form to acknowledge they have been advised of Toyota’s recall to correct the defect. The dealer also should have the consumer sign a waiver or release document that includes a covenant not to sue the dealership.

It should be clear, however, that while such a waiver or release may protect a dealer from a civil suit arising out of a consumer fraud claim, it cannot protect a dealer from potential personal injury claims arising from an accident caused by an uncorrected defect subject to a manufacturer’s recall.

The CATA strongly advises dealers NOT to sell any Toyota models (new or used) subject to the manufacturer’s recall unless or until the recall defect has been remedied.