Dealer Best Practices for Handling Recalls

Vehicle recalls present a mixed bag for auto dealers.

On the one hand, the recall work boosts service department revenues, as manufacturers cover the cost of remedial fixes.

On the other hand, dealers must face customers who aren’t happy about the recall fixes, even if they’re not paying for them. Recalls may make cars safer, but they can nip at customer satisfaction scores.

That’s especially true now that dealerships’ back shops are busier than ever, mainly because many consumers who bridle at today’s rising prices of vehicles are keeping theirs longer, an estimated 12.5 years. As the units age, they typically require more repairs.

So, although recalls beef up dealerships’ bottom lines, squeezing those customers into service schedules is a challenge, Michael Glassman, dealer principal at Glassman Automotive Group, Southfield, MI, tells Wards of his Kia and Hyundai customers.

Finding an automaker that has not had recall campaigns, whether self-imposed or government-ordered, is challenging.

Doing the Math

Last year saw 932 recalls affecting 30.8 million vehicles in the U.S. “It’s growing,” Alex Ansley, the National Highway Traffic Safety Admin.’s recall manager, says at a recent auto industry webinar.

Hyundai and its sister division Kia are among the latest brands to take a spin in the recall barrel.  

The South Korean companies say they are recalling more than 113,000 newer vehicles in North America because of fire risks.

The campaign covers the’23-’24 Hyundai Palisade, ’23 Tucson, Sonata, Elantra and Kona vehicles and ’23-’24 Kia Seltos and ’23 Souls and Sportages.

The problem stems from electronic controllers for an oil-pump assembly that may contain damaged electrical components that may cause overheating. Dealers inspect and replace the electric oil pump controller as needed.

Meanwhile, Toyota is recalling more than 150,000 ’22 and ’23 Tundra pickup trucks (including hybrid versions) because of possible fuel leaks that could cause a fire.

“Fire” is a hot-button word in the auto industry, although vehicles rarely catch fire, contradicting some media reports.

The National Fire Protection Agency reports that in general about 535 car fires per day that kill about seven people each week.

Dealers’ Best Practices for Recall Service

1. Fast fixes

In recalls, job one for dealers is to make the fix. But beyond that, dealers must also hand-hold nervous customers and placate irked ones, lest they bolt the brand and spread negative reviews.

“Obviously, all service work is important, but recalls are a top priority,” says Andrew DiFeo, dealer principal at Hyundai and Genesis of St. Augustine, FL. “We want to get the vehicles back on the road as quickly as possible.”

Glassman says he’s committed to fast turnaround – especially when a recalled vehicle is involved.

“It’s trickier,” he tells Wards. “Customers in for recall work have different expectations than regular service customers. They expect a quick turnaround. And they’re not cool about it if they don’t have alternative transportation.”

Getting customers in and out requires sufficient auto-technician staffing levels. Glassman says he is committed to that, too. “It’s definitely a challenge but we don’t want to shut the service schedule down because we don’t have enough technicians. We have people come to us for service from other states, like Ohio, because they know we’ll take care of them.”   

2. Loaner Vehicles

When a fast, in-and-out recall fix isn’t possible, dealers provide loaner cars or put people in complimentary rental vehicles.

“There’s a delicate balance of getting the fix done as soon as possible and yet getting it done right,” DiFeo tells Wards.

Typically, dealers arrange alternative transportation for customers if the repair work exceeds a certain length, such as three or four hours. If all loaners are taken, dealers turn to rental-car agencies or even Lyft and Uber (gratis to the dealership customers), says DiFeo.

It gets touchy if a customer looking for a loaner has a terrible driving record. “I can’t put everyone in a loaner,” says Glassman. “Some people – how can I put this? – don’t qualify.”

3. Sound the Alarm

Automakers quickly notify customers and dealers by mail, email and other media if serious recalls (especially ones involving safety issues such as malfunctioning airbags) are announced.

But car companies often don’t communicate as diligently if it’s a minor issue, such as an infotainment system glitch.

“We’ve sometimes learned about (non-life-threatening) recalls from the local news, but communications are getting better,” says DiFeo, who has served as the head of Hyundai’s national dealer council.   

Although recall notification responsibility rests mainly with automakers, others should participate in alerting and reminding affected consumers to take care of mandated fixes, says Raymond Roth, director-disputes, compliance and investigations at Stout, a company that tracks recalls.

“It should be tackled collectively, not only by manufacturers,” he says, citing dealerships and DMVs.

“So many organizations touch consumers,” he says at a recent Society of Automotive Analysts webinar.