ABC News Investigation Uncovers Hundreds of New Vehicles Across the US Sold Under Open Safety Recalls

ABC News found hundreds of new vehicles were sold under open safety recalls.

ByABC News
March 19, 2015, 7:31 AM

— -- Each year nearly 17 million new cars are sold in the United States – and according to federal law, those cars are supposed to be free of safety defects and not under recall. But an ABC News investigation has confirmed that several hundred vehicles from various automakers were sold with open recalls at over 100 dealerships across the United States. Most of those sales occurred just in the second part of 2014.

So "GMA" Investigates went undercover to several new car dealerships in New York and New Jersey to find out if new cars with open recalls might be sold to an ABC News producer. When asked specifically about open recalls, some salespeople checked and told the producer that the vehicles did, in fact, have recalls.

Another salesperson told ABC News that the cars had no recalls, when a simple computer check would have disclosed an open safety recall. The ABC News producer spoke with a salesman named Arnie at Hawthorne Chevrolet, in Hawthorne, New Jersey, regarding the purchase of a brand new 2014 Chevrolet Silverado pickup truck. Before arriving at the dealership, ABC News identified a potentially dangerous open safety recall on the vehicle – some vehicles can shift into neutral unexpectedly, losing power in the middle of traffic, for example. But when the producer asked Arnie about open recalls on the nearly $50,000 vehicle, he said there were none.

“Absolutely not,” Arnie told the ABC News producer. ABC News is choosing not to use Arnie's last name.

Although car salespeople like Arnie are not legally required to inform customers about the recall, the dealership is required by law to fix the recall before it is sold. So, the producer gave Arnie a $500 purchase deposit on the vehicle over the phone – and returned two days later to finish the sale.

After driving off the dealership lot with his newly purchased truck, the ABC News producer, along with ABC News Correspondent Gio Benitez, checked the truck’s VIN number on the General Motors website and the National Highway Traffic Safety Administration (NHTSA) database to see if the recall had, in fact, been fixed by the Hawthorne Chevrolet dealership.

“There it is, 2014 Chevy Silverado. Recall incomplete,” Benitez said as he read the GM website results. “The customer would experience a loss of motive power which could increase the risk of a crash. That’s a serious recall that needs to be fixed.”

A loss of motive power means a vehicle can unexpectedly shift into neutral.

So "GMA" Investigates returned to Hawthorne Chevrolet for an explanation.

“You sold [our producer] this car and you said there were no recalls on it. But in fact there are recalls on it. In fact a very serious one,” Benitez said.

Arnie expressed surprise that there was a recall on the truck.

“I have to check it out and see. I wasn’t aware,” Arnie answered.

But Benitez wanted to know why Arnie told the producer there was no recall, if he was not sure.

“Why did you say though that there wasn’t a recall?” Benitez asked.

“I don’t remember even talking about that,” Arnie answered.

Benitez then played video footage for Arnie, taken on the producer’s undercover cameras. After viewing video where he said the truck has no recalls, Arnie admitted his error to Benitez.

“When you get a new car it’s always supposed to have all the be taken care of,” Arnie said. “And I made a mistake I guess. But I’ll follow up from now on, on all the cars.”

In a statement to ABC News, the president of Hawthorne Chevrolet said: “We have realized that our failure was tied exclusively to human error … From now on we will be cross-checking serial numbers with our service records, prior to delivery, to ensure that each vehicle has been properly tended to.” He told ABC News they have added an extra step to their sales process -- checking VINS at time of sale before delivery -- to make sure this never happens again.

General Motors, the manufacturer of the Chevrolet Silverado, told ABC News it “instructs its dealers to complete all open recalls on new and used vehicles prior to sale and delivery to customer.” GM added they have a completion rate of 86 percent on the unwanted transfer case shift to neutral recall, meaning that about 402,000 of the 467,000 recalled vehicles have been fixed. The recall also affected 2014 GMC Sierra 1500s and certain 2015 Chevrolet Silverados, Suburbans, Tahoes, GMC Sierras, Yukons and Yukon XLs.

NHTSA, the government agency responsible for policing new car dealers on open safety recalls, has fined only two dealerships in 2014 for not adhering to federal law.

NHTSA declined an on-camera interview with ABC News, but they defended their enforcement efforts in light of budget restraints. They said in a statement: “Selling a new vehicle that is under recall but has not been remedied is a violation of the law and a risk to public safety. There is no excuse for dealers to sell new vehicles while under recall, and NHTSA has penalized dealers who have failed to meet their safety responsibilities, including two in just the last six months. Anyone with information about dealers selling new cars with safety defects should provide that information to NHTSA so we can investigate and hold dealers accountable for any violations."

National Automobile Dealers Association (NADA), which represents more than 16,200 new car and truck dealerships in the U.S., told “GMA” Investigates, “While we do not comment on how the law may apply to individual situations, auto retailers should comply with all applicable federal, state and local laws and operate their businesses in accord with the highest standards.”

ABC News discussed some of its findings from the investigation with Sen. Ed Markey, D-Massachusetts, who sits on the Senate subcommittee on consumer protection.

“Senator, we found hundreds and hundreds of new cars that have recalls on them. And guess what? They were sold,” Benitez revealed.

“Yeah – and that’s just wrong,” Markey responded.

Markey, who says the law barring dealers from selling new cars with open recalls is not enough on its own, said NHTSA needs to do more to enforce it.

“NHTSA has 51 people on its enforcement team. We have a couple of producers looking at this – and we pulled up hundreds and hundreds of cars with these issues,” Benitez said. “Why can’t NHTSA?”

“NHTSA should have done this work,” Markey answered. “It shouldn't take an investigation by ABC to find this problem.”

Customers shopping for a new car can do their own investigating to help protect themselves from such recalls, by checking their car’s VIN number on NHTSA’s database or the car manufacturer’s website.

Customers can also check their car’s VIN number for free on the MyCarFax mobile application. The application allows customers to plug a license plate or VIN number into the CarFax database to locate any open recalls on the car. It will also alert customers in the case of a future recall.