Florida dealer Earl Stewart is suing a competitor for selling used cars with recalled Takata airbags that haven’t been replaced.
The owner of Earl Stewart Toyota in Lake Park, Fla., filed a lawsuit Wednesday against Arrigo Enterprises, which has dealerships in West Palm Beach, Fort Pierce and Tamarac, Fla., that sell the Dodge, Chrysler, Jeep, Ram, Fiat and Alfa Romeo brands.
Stewart had mystery shoppers inquire about recalled vehicles at two dozen dealerships in South Florida. Even though most of the stores said the vehicles didn’t have any open safety recalls when asked, Stewart said the Arrigo stores were targeted in the lawsuit because their salespeople were the most egregious in their denials.
The Arrigo salespeople either failed to inform consumers of the airbag recalls at all or concealed the significance of the issue by telling them the vehicles could be repaired immediately, the lawsuit says. In fact, it can take up to six months to get replacement airbags installed.
Injunction sought
The lawsuit, which targets Arrigo’s stores in West Palm Beach and Fort Pierce, seeks both monetary damages and a court injunction, which would halt Arrigo’s sales of the relevant vehicles.
As of press time on Thursday afternoon, officials from Arrigo had not returned a call seeking comment.
“This situation I find myself in is probably the most difficult I’ve encountered in my nearly 50 years as a car dealer. It tears me,” Stewart said during a news conference Thursday. “No matter what choice I make, I’m going to make some big enemies. Unfortunately, [I’m] virtually the only car dealer that has taken a stance against this. All the other car dealers I know are actively selling these used cars with defective Takata airbags -- in most cases knowingly.”
70 million
Last week, U.S. regulators and American Honda Motor Co. confirmed the 11th U.S. death linked to a ruptured Takata airbag inflator.
Nearly 70 million Takata inflators in U.S. vehicles are or will be recalled through 2019 under a massive recall plan being coordinated by the National Highway Traffic Safety Administration. According to the agency, some 11.4 million Takata recalled inflators had been replaced as of Oct. 7, representing about 36 percent of the total number of airbags under recall to-date.
The Takata inflator crisis -- the largest safety recall in U.S. history -- has affected 15 automakers. Honda and Acura vehicles make up 10.7 million of the nearly 70 million.
Stewart stopped retailing used vehicles with recalled Takata airbags this summer, a position also taken by a handful of other dealership groups, including AutoNation Inc. of Fort Lauderdale, Fla., the nation’s largest new-vehicle retailer.
Disadvantage
But Stewart says his decision to stop sales has put him at a competitive disadvantage.
He still accepts the vehicles as trade-ins, so now he has around 40 to 50 cars on his lot that he refuses to sell. Stewart said his stance has cost him nearly $110,000 due to factors such as storage fees and vehicle depreciation.
Many of the vehicles are Honda models, which are popular used vehicles. Stewart said he won’t sell the Hondas, but his competitors are continuing to do so while reaping the benefits.
Stewart believes it should be illegal to sell used vehicles with open safety recalls. He wrote an open letter to Florida Gov. Rick Scott this summer to bring light to the issue.
The National Automobile Dealers Association said parts availability can complicate things. It urges dealers to inform customers of open recalls.
“Dealers have the capacity and service expertise to fix these recalled vehicles -- and if they have access to the vehicles, the only thing standing in the way of a 100 percent completion rate is the availability of parts,” Jonathan Collegio, senior vice president of public affairs for NADA, said in a statement. “If parts are not available for a fix, we encourage dealers to notify consumers if a used vehicle being purchased is under recall.”
Petition
Stewart started a petition on Change.org to bar the sale of used inventory with open safety recalls. The petition, which has garnered nearly 700 signatures, is aimed at Florida Gov. Scott along with Florida’s House of Representatives and Senate.
“All I care about is to stop the practice of selling these cars. Put them in the same category that you do with new cars,” Stewart said. “There’s no logical rationale whatsoever that you should not be able to legally sell a new car with a defective airbag, but you can sell that same car used. It’s even illegal to rent a car with a defective air bag.”
