At his Toyota dealership in Lake Park, Fla., near North Palm Beach, Stewart has long had a hard-and-fast ban on selling used cars with unrepaired safety recalls. He bolstered that policy in June, refusing even to wholesale used cars with open recalls. That's just "kicking the can" he said.
It hasn't been easy. Dealers throughout the country have been struggling with the burden of record recall volume, including the massive federally coordinated campaign to repair some 78 million Takata airbag inflators by 2019.
And Stewart's location in Florida is one of the high-heat, high-humidity zones that are the initial focus of the nationwide Takata recall. Through August, he says, honoring the policy cost him more than $75,000 in storage costs and lost sales.
Holding a hard line on unrepaired recalled cars can be difficult even for the big guys, especially when replacement parts are in short supply. AutoNation, the nation's largest dealership group, announced a policy last year barring the sale of any vehicle with open recalls, going a step beyond a federal law that applies only to new cars. But after pressure from the Takata recall began to weigh on its profits, AutoNation modified the policy to allow the wholesaling of unrepaired vehicles, which it marks with a warning tag. It still won't sell the vehicles to retail customers.
The National Automobile Dealers Association has resisted calls to bar dealers from selling vehicles with pending recalls, saying dealers shouldn't be required to ground recalled vehicles that are considered safe to operate or be penalized for the failures of manufacturers. NADA has urged dealers to disclose pending recalls on the used cars they sell.
Stewart calls his stricter policy a "moral decision" with some upside. "We're not being quiet about what we're doing," he says.
"My problem is my profits and my expenses out of this," he adds, "but I'm selling more used cars than we ever have."
To put the policy in motion, Stewart instructed dealership staffers and managers to stop selling cars with safety recalls unless they can be fixed. At the same time, he instructed staffers to pay fair market value for trade-ins, even if they have pending Takata recalls.
Dealership staffers check Carfax and AutoCheck reports for any outstanding recalls on the trade-ins. Staffers also run the cars' vehicle identification numbers through the search tool on safercar.gov, the National Highway Traffic Safety Administration's recall database.
"In about 30 percent of the cases, Carfax or AutoCheck does not disclose the Takata airbag, so we always go to the NHTSA site," he says.
Many of the most common trade-in models in his market have recalled Takata inflators for which replacement parts aren't yet available, Stewart says. Those cars are moved to a parking lot he rents close to his dealership to await parts.