The recall system identifies defective
automobiles that are already on the road, by notifying car owners
about how to get them fixed. Generally, it includes defects that
affect the car's safety, cause it to fall below federal safety standards,
or both, and that are common to a group of the same kind of cars
or equipment. The defect can be in performance, construction, components,
or materials found in the car or in related equipment, such as child
safety seats.
Many recalls result from the manufacturer's response
to owner complaints. The National Highway Traffic Safety Administration
(NHTSA), however, influences and orders many recalls. The NHTSA
receives safety-related complaints through letters and its telephone
toll-free hotline. (This hotline number is listed at the end of
this chapter.) When the NHTSA registers enough complaints, NHTSA
engineers perform an engineering analysis. Then the NHTSA engineers
contact the automobile's manufacturer. The manufacturer must either
remedy the defect or launch its own defect investigation. Ultimately,
the NHTSA decides if a final defect determination and recall is
proper.
The manufacturer must remedy the defect for free. This does not
apply when the first buyer bought the car more than eight years
earlier. In comparison, the standard for tires is three years. The
manufacturer has the option of repairing the defect, replacing the
car, or refunding the purchase price. If it refunds the money, the
manufacturer may deduct a certain amount for depreciation (loss
in value). The manufacturer reimburses the dealer who makes the
repairs. If the manufacturer chooses to repair the defect, it must
do so within a reasonable time. Otherwise the manufacturer must
replace the vehicle or refund the purchase price.
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