Is it Safe to Purchase a Recalled Car?

Toyota Avalon Recall

Photo by JLaw45

Over the past year, we’ve seen a lot of auto manufacturers recall their vehicles for a variety of reasons. Each time we’ve seen a car recalled, we are left to wonder whether the car we once loved is really safe.

Of course, most recalled cars end up back on the roads after necessary repairs, but does this mean it’s a good idea to purchase one? Let’s take a look at whether it’s smart to take out a loan on a vehicle after it’s been a part of an auto recall.

The Nature of an Auto Recall

A manufacturer recall on autos is similar to any product recall. The maker of the vehicle is requesting a return of a product, usually after the discovery of one or more safety issues. Conducting the recall limits the liability for corporate negligence, while at the same gives the company a chance to improve their image and fix whatever issues the product has.

Since recalls are very costly, they only occur when it is apparent that major problems exist that need to be addressed immediately. In the case of auto recalls, sometimes thousands–or even millions–of cars may be recalled voluntarily or through the requirement of the National Highway Traffic Safety Administration (NHTSA).

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When an auto maker realizes that it must recall a vehicle, these are the steps that are typically taken:

  • Initial notification: The maker or a dealer notifies the proper authorities, letting them know that they intend to recall one or more types vehicles based on make, model and/or year of distribution.
  • Hotlines are established: At this point, consumer hotlines are established so vehicle owners will be able to address whomever sold to them when the car recall is announced.
  • Recall announced: Once the beginning steps are initiated, the recall announcements are released to government agency websites and the local or national media.
  • Consumers receive instructions: After the announcements are made (or sometimes during), the manufacturer begins distributing instructions on where to take vehicles to get the correct auto repair. Usually, the owner is instructed to park the car unless taking it to a mechanic. Instructions on how to drive the car are also given.

The process is normally streamlined and works in a way that will ensure the vehicle has no additional troubles until it’s repaired.

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Cars That Have Seen Recent Recalls

A number of cars have been recalled in recent months. Here is just a short list of some of the recalls we’ve seen:

  • Toyota: Between January and July 2010, Toyota recalled millions of vehicles, including the Corolla, Matrix, Tundra and Camry, which were all affected by a “sticky gas pedal,” and the Avalon, which had a steering lock issue. Cars with gas pedal issues have already been put back on the road and are deemed safe to drive.
  • GM: In June 2010, GM recalled 1.5 million vehicles due to a windshield wiper fluid system issue that could cause a fire to ignite. Since the supplier of the system is no longer in business, GM said it would remove the heated feature in vehicles and compensate owners $100.
  • Honda: In August 2010, Honda recalled nearly 400,000 vehicles, including Accords, Civics and Elements from years 2003 and 2004. The recall was initiated because an ignition mechanism was causing cars to roll away and possibly crash. As of the end of September, the issue had not been rectified.
  • Hyundai: In September 2010, Hyundai voluntarily recalled 140,000 Sonatas due to steering problems. To date, there is no word on whether the lot of cars is considered safe to drive.

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There is no doubt that a large number of cars have seen recalls this year alone, but while some have already been put back on the road, does this mean you should buy one?

Should You Purchase a Recalled Car?

During the time a vehicle is recalled, the manufacturer is usually under a legal obligation to stop making and selling those vehicles, as determined by the National Highway Traffic Safety Administration. So if you are interested in a vehicle in a recall stage, you may not be allowed to purchase it at all.

What about when the car is deemed safe and ready again to be driven on the roads again, however? If you are interested in a previously-recalled vehicle that is now considered safe, here are a few tips to think about before committing to any auto loans:

  • See if it has been deemed safe: If you are sure that the recalled vehicle is the one for you and you have been given the green light to purchase it then you probably won’t have problems with the car–at least not any reflected in the recall.
  • Know what steps to take if issues arise: Make sure that you have a list of instructions that tell you what to do if the vehicle you purchase does have issues. This way, you not only know how to be safe on the roads, but also where to take the car to have the issue fixed.
  • Check recall history: Find out if this car had any other recalls in the past. By checking its recall history with the NHTSA, you could see if the manufacturer itself has recalled too many vehicles for your taste.

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There is no rule that says you cannot purchase a car after it’s been recalled. Once the issue has been fixed, it pretty much falls into the same category with all other vehicles that have been produced on mass assembly lines and have the potential for problems.

So if you feel comfortable with the idea, then it probably doesn’t hurt to purchase a recalled car. Just be sure you know all of the risks you could be facing if you do.

About the Author

Stacey Bumpus

Stacey Bumpus holds both her Bachelor and Masters degrees in Communications. After spending years in corporate communications, she discovered freelancing was really her cup of tea and fell in love with finding and writing about the latest financial news. Now, providing news and tips about banking, mortgages, taxes (and even logging her own efforts to save for retirement), she's not only fulfilling her lifelong passion, but also helping others manage their finances responsibly.

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