You've probably heard of product recalls. However, there's an equivalent to that when it comes to the motor industry. Recalls in the automotive space refer to an official statement issued by the manufacturer outlining a defect in a specific make and vehicle model, compromising the general safety of that given vehicle. Therefore, such a car is not deemed safe for the general public use. These recalls may be based on the manufacturer's in-house recommendations or the government's set safety standards for a vehicle (NHTSA). These defects may involve brakes, safety belts, ignition systems, steering wheels, among others.
These recalls can apply to both the new and used vehicles, but the majority of the affected cars are usually new arrivals. When a vehicle is recalled, three courses of action are available: repairs, replacements, or refunds. The manufacturer can then opt for the repair option usually carried out free of charge, replacing the recalled vehicle with an identical version or equivalent, or fully refunding the dealership, considering the depreciation hit.