Chevy store fined $40,000 for selling recalled new vehicles without repairs

Federal regulators have fined a suburban Phoenix Chevrolet dealership $40,000 for selling recalled new vehicles without the proper repairs.

Sands Chevrolet of Surprise, Ariz., agreed to pay the civil penalty as part of a settlement with the National Highway Traffic Safety Administration after a two-year investigation, the agency said in a report posted on its website. Federal law prohibits dealers from selling new vehicles subject to open recalls without fixing them first.

The dealership also has changed its procedures to ensure that all vehicles are checked for open recalls before they are delivered to customers, NHTSA said. The dealership now checks every vehicle that comes into its service department for recalls and “takes steps to have all used trade-in vehicles repaired prior to retail sale,” the agency said.

Jerry Moore, dealer operator at Sands Chevrolet, declined to elaborate on the settlement, citing a confidentiality agreement with NHTSA.

“It was something that happened a few years ago, and we’re moving on from it,” he said in a brief interview Tuesday.

After NHTSA made its investigation public in May 2014, Moore told Automotive News that the dealership had sold two recalled Malibu Eco sedans without doing repair work mandated by General Motors. GM had recalled the mild-hybrid cars in 2013 for a malfunctioning generator control module that could drain the battery and cause the engine to stall. In severe cases, it could lead to “a burning or melting odor, smoke and, in rare instances, a fire in the trunk,” GM said at the time.

Moore said in 2014 that the sales were a mistake, which he blamed on the fact that the cars were being stored off-site during an $8 million construction project. Both of the cars were repaired after the customers took delivery, he said at the time.

The six-page settlement agreement, dated May 24, doesn’t say how many cars Sands Chevrolet sold without having safety defects fixed. The agreement says NHTSA opened its investigation after it “received information that alleged Sands Chevrolet sold and delivered” recalled cars that hadn’t been repaired.

The two-store Sands Chevrolet group is led by Buzz Sands, whose family opened its first Chevy dealership in Phoenix in 1934. Sands, who has donated more than $10 million toward scholarships, a computer lab and football facilities at the University of Arizona, was a nominee for the Time Dealer of the Year Award in 2014.

Staff reporter Ryan Beene contributed to this report.