Recourse for dealers with cars with stop sale notices

Recourse for dealers with cars with •stop saleê notices

Many of the recent recall announcements have been accompanied by a –stop sale” order from the manufacturer or NHTSA. The law prohibits the sale of such vehicles until the defect is remedied. What recourse do dealers have in such cases?

For new cars, the federal Motor Vehicle Safety Act says that manufacturers have –an obligation either to repurchase vehicles subject to defect recalls, or to provide a remedy for dealers to implement immediately.”

Manufacturers are required to pay dealers an additional 1% of the price dealers paid for the vehicle(s), per month, prorated from the receipt of the –stop sale” notice until the vehicle is repurchased or the repair made. Manufacturers must also pay dealers for associated parts and labor.

Thanks to the Wisconsin Auto and Truck Dealers Assn for framing this report.