Summer Roundtable August 16-18, 2017

Hilton Nashville DowntownNashville, TN

• Open Recalls – What is all the fuss about?

• NAAA policy and position statement

• Selling Vehicles - Be open & honest!

• Awareness– Technology to help

• Actions– How to mitigate pre & post sale issues

• Best Practices

Sessionoverview

OpenRecalls:Thisissuekeepsongettingbigger

OpenRecall:WidespreadproblemwithconcentrationsinCA,TX,FL,PAandNY.

1. Open Recalls impact the safe operation of a vehicle

2. Manufacturers alert owners, but Owners and Lessee’s are not as responsive as they should be

3. Vehicles cannot be rented if they have an Open Recall

4. Open Recall = Lower Transaction Price

5. Consignors and Auctions are impacted but we have options

OpenRecalls:RealityStatements

• The National Highway Traffic Safety Administration (NHTSA) launched a VIN lookup tool in August of 2014, available at www.safercar.gov, which provides open recall status on vehicles.

• A Seller will build credibility in its product, and a Buyer will have more confidence in its purchase decisions, when there is disclosure and/or awareness of all material facts about a vehicle being offered for sale/considered for purchase.

• As such, NAAA recommends Sellers use NHTSA’s VIN lookup tool on each vehicle registered for sale and provide disclosure to Buyers of such information in the event an open recall exists on any particular vehicles and that Buyers use NHTSA’s VIN lookup tool on each vehicle being considered for purchase to ensure awareness of all material facts prior to bidding on vehicles.

NAAA’sOpenRecallPositionStatement

1. Do Open Recalls impact your business? How?

2. How do you know what is open, resolved or not subject to recall?

3. What actions can you take to close open recalls?

4. What actions can be taken to mitigate risk?

DetectionMethods– AwarenessorBlissfulIgnorance?

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Summer Roundtable August 16-18, 2017

Hilton Nashville DowntownNashville, TN

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Discussion Topics• Pain Points- Buyers

– Stop Sell– Risk to a buyer if they’re unable to sell the car– Liability

• Pain Points- Sellers– Consignors are reluctant to announce recalls– Extends days to sell– Reduces the value of a vehicle– Liability– Transparency- May be difficult to know if a vehicle has an open recall– OEMs don’t do a good job of sharing information

• Pain Points- Auctions– Takes up space– Increased costs

What actions can be taken to mitigate risk?• Ensure lease agreements specifically spell out the importance of acting on Open Recall

notifications in addition to scheduled maintenance• Know what you are buying, do your homework so you don’t buy a vehicle with an Open

Recall (B)• Develop relationship with local franchise dealers to have Open Recalls fixed as soon as the

vehicle arrives at the lot (B)• Standardize Open Recall announcements and get Consignors on board to announce them –

this is a safety issue!• Announce Open Recall when the vehicle is offered for sale• Take every action possible to have the previous driver address the open recall before it enters

the remarketing process• Sellers need to disclose.

– Open recall information on a VIN by VIN basis is available at: www.Safercars.gov– Open recall information on multiple also available from Autocheck (data from above

website)– Open recall information available from Carfax (data directly from OEMs)

Resources• CarProof report (Canada)

• NHSTA, safercar.gov

• Experian

• Carfax

• OEM websites, OEM systems

• Announcements (B)

• Direct feed from OEMs (US 90%, Canada 75%)

• Global Warranty Database does not allow funds to transfer

• AutoCheck

• Carpart

• Consignors alert the auctions

• Signage in the lanes for www.safercars.gov to allow dealers to confirm recall status on vehicles

What actions are you taking to close open recalls?• Work Closer with OEMS

– Vehicles repaired at the OEM franchise dealers near the auction

• Disclose Open Recall to consumer buying the vehicle

• Reach out to customer and encourage them to have the Open recall addressed before

turning it in.

– Fleet drivers also

• Allow Auctions to close out Open Recalls

• Consignors provide financial resrouces to help auctions announce and close out recalls

• Consistency policy across consignors

• Signage at the auctions

• Announce vehicles with No Open Recall