Auto Safety:

NHTSA Has Options to Improve the Safety Defect Recall Process

GAO-11-603: Published: Jun 15, 2011. Publicly Released: Jun 15, 2011.

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In 2010, auto manufacturers recalled more vehicles than any other year, according to the National Highway Traffic Safety Administration (NHTSA), the federal oversight authority for vehicle recalls. However, many recalled vehicles are never fixed, posing a risk to vehicle operators, other drivers, and pedestrians. After the recent recalls of Toyota vehicles, Congress raised questions about the auto safety defect recall process, including the sufficiency of NHTSA's oversight authorities and whether vehicle owners are being effectively motivated to comply with recalls. In response, GAO reviewed laws and documents and interviewed NHTSA and stakeholders about the (1) extent of NHTSA's role in the recall process, and how its authorities compare to selected federal and foreign agencies that oversee recalls; (2) benefits and challenges of the recall process for NHTSA and manufacturers; and (3) options for improving the recall process. GAO also conducted focus groups with vehicle owners to better understand their perspectives.

NHTSA monitors manufacturers' recall campaigns and completion rates (the number of defective vehicles that are fixed) and provides information and guidance to the public. NHTSA is responsible for reviewing the planning and implementation of recall campaigns to ensure compliance with legal requirements. To this end, the agency is responsible for reviewing, among other things, the manufacturer's description of vehicles affected by a safety defect, actions the manufacturer plans to take to remedy those vehicles through a recall, and notification letters the manufacturer plans to send to the vehicles' owners. NHTSA also monitors the effectiveness of manufacturers' recall campaigns, based in large part on the data manufacturers are required to submit on completion rates. In addition, the agency provides information and guidance to the public on recalls, primarily through its Web site. NHTSA generally has similar authorities to those of selected federal and foreign agencies GAO reviewed that oversee recalls--the Consumer Product Safety Commission, the Food and Drug Administration, the U.S. Department of Agriculture, and agencies in Canada, Germany, Japan and the United Kingdom--although some differences exist in how they can implement their authorities. Auto industry stakeholders are generally satisfied with the recall process, but several challenges may affect recall completion rates, and thus, the number of defective vehicles that are removed from the road. Manufacturers cited NHTSA's role in the process as a key benefit, reporting clear requirements and open communication. Although franchised dealerships had some concerns related to manufacturers' communication and availability of repair parts, they were also generally satisfied with how manufacturers reimbursed them. Nevertheless, NHTSA faces challenges that may affect recall completion rates; for example, focus group participants reported that 1) they preferred notification letters with certain elements and may be more likely to comply if the letters included the vehicle identification number (VIN) and clarified the severity of the defect and 2) they were unfamiliar with NHTSA's primary means of communicating defect information to the public--its Web site. Furthermore, according to GAO's review, although recall completion rates vary considerably by certain factors, NHTSA has not consistently used the data it collects to identify which factors make some recalls more successful than others. Finally, NHTSA does not have authority to notify potential used car buyers of a defect. Based on these challenges, NHTSA has the following and other options for improving the recall process and, more importantly, recall completion rates. First, NHTSA could modify the way manufacturers must present information in safety defect notification letters and publicize information resources, like NHTSA's Web site, so that vehicle owners are better motivated and informed. Second, NHTSA may be able to use manufacturers' data to identify what factors make some recalls more or less successful than others to better target monitoring of recall campaigns and identify best practices. Finally, expanding NHTSA's recall authorities may help identify more defective vehicles and improve recall completion rates. GAO recommends that NHTSA (1) modify requirements for notification letters; (2) enhance and publicize its Web site (3) better use manufacturers' data; and (4) seek legislative authority to notify potential used car buyers of recalls. NHTSA agreed to consider GAO's recommendations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The National Highway Traffic Safety Administration (NHTSA) oversees the process of recalling vehicles that have safety defects. Under this process, consumers are notified that their vehicle has a safety defect and of the manufacturer's plan to remedy it. In 2011, we reported that NHTSA is responsible for reviewing auto manufacturers' planning and implementation of safety defect recalls to ensure compliance with legal requirements. To this end, the agency is responsible for reviewing, among other things, the manufacturer's notification letters it plans to send to owners of affected vehicles. Auto industry stakeholders are generally satisfied with the recall process, but NHTSA faces challenges that may affect recall completion rates. For example, focus group participants reported, among other things, they preferred notification letters with certain elements and may be more likely to comply if the letters included the vehicle identification number (VIN) number, clarified the severity of the defect and used the word "urgent" to indicate the seriousness of the defect. Therefore, we recommended that NHTSA modify the recall notification letters they send to consumers by adding the word "URGENT" in large type as well as the (VIN), so that consumers knew the their vehicle was involved in a recall. In 2015, we confirmed that NHTSA required that the recall notification letters include the words, "IMPORTANT SAFETY RECALL" and the VIN. As a result, consumers should have clearer information that indicates they need to bring in their vehicles for safety repairs.

    Recommendation: In order to encourage vehicle owners to comply with safety recalls, provide vehicle owners with specific information about whether their vehicle is involved in a recall, and identify factors that affect recall completion rates, among other things, the Secretary of Transportation should direct the Administrator of NHTSA to modify the requirements for defect notification letters to include additional information such as (1) the word "urgent" in large type to obtain readers' attention, and (2) the VIN of the recalled vehicle so it is clear that the letter pertains to the owner's current vehicle.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: The National Highway Traffic Safety Administration (NHTSA) oversees the process of recalling vehicles that have safety defects. Under this process, consumers are notified that their vehicle has a safety defect and of the manufacturer's plan to remedy it. In 2011, we reported that NHTSA provides information and guidance to the public on recalls, primarily through its Web site. The information NHTSA provides on its Web site could be more useful. In particular, a centralized database (developed by NHTSA or another party) that allows consumers to search for recall information by vehicle identification number (VIN) would allow vehicle owners to determine if their specific vehicle is affected by a recall. For example, we found that used car dealerships may be willing to notify potential buyers of outstanding recalls but the lack of a public, VIN database made such notifications difficult. Therefore, we recommended that NHTSA create a VIN search function on its website and publicize the site to vehicle owners and the public. In September 2014, NHTSA staff reported that, in response to this recommendation, they had launched such a search function on their website and we verified this was the case. As a result, consumers will have access to additional information about recalls, which should increase the number of consumers who bring in their recalled vehicles for service.

    Recommendation: In order to encourage vehicle owners to comply with safety recalls, provide vehicle owners with specific information about whether their vehicle is involved in a recall, and identify factors that affect recall completion rates, among other things, the Secretary of Transportation should direct the Administrator of NHTSA to create a VIN search function on www.safercar.gov and publicize the Web site to vehicle owners and the public.

    Agency Affected: Department of Transportation

  3. Status: Open

    Comments: When we confirm what actions NHTSA has taken in response to this recommendation will provide updated information.

    Recommendation: In order to encourage vehicle owners to comply with safety recalls, provide vehicle owners with specific information about whether their vehicle is involved in a recall, and identify factors that affect recall completion rates, among other things, the Secretary of Transportation should direct the Administrator of NHTSA to develop a plan to use the data it collects on recall campaigns to analyze particular patterns or trends that may characterize successful recalls and determine whether these represent best practices that could be used in other recall campaigns.

    Agency Affected: Department of Transportation

  4. Status: Closed - Implemented

    Comments: The National Highway Traffic Safety Administration (NHTSA) oversees the process of recalling vehicles that have safety defects. Under this process, consumers are notified that their vehicle has a safety defect and of the manufacturer's plan to remedy it. In 2011, we reported that auto industry stakeholders were generally satisfied with the recall process for safety defects, but NHTSA faces certain challenges that may affect the completion rate of recalls. One such challenge is that NHTSA lacks the authority to require manufacturers to notify used-car dealerships of recalls and to require used-car dealerships to notify potential buyers of the existing defect. With over 35 million used cars sold by used and franchised dealerships in the United States in 2009 alone, this could pose a significant risk to the safety of millions of vehicle drivers and may have a negative impact on recall completion rates. Therefore, we recommended that NHTSA seek legislative authority to ensure that potential buyers of used cars and are notified of any outstanding recalls prior to sale. In 2015 we confirmed, that NHTSSTA supported and were monitoring HR 2198, the Raechel and Jacqueline Houck Safe Rental Car Act, which would close a loophole in the motor vehicle statute by prohibiting rental companies from renting or leasing motor vehicles under a safety recall. Also, the Department of Transportation had included a provision for such authority in the Grow America Act, which it had sent to Congress in 2015. With this authority, NHSTA NHTSA will have the ability to prevent consumers from putting their lives at risk driving defective rental cars.

    Recommendation: In order to encourage vehicle owners to comply with safety recalls, provide vehicle owners with specific information about whether their vehicle is involved in a recall, and identify factors that affect recall completion rates, among other things, the Secretary of Transportation should direct the Administrator of NHTSA to seek legislative authority to ensure that potential buyers of used cars are notified of any outstanding recalls prior to sale.

    Agency Affected: Department of Transportation

 

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