63.9 million – the number of recalls in 2014. Is that high? Yes. How high? Consider this – using the same data set for 2011, 2012 and 2013 combined there were only 51 million. A record year indeed!
Safety defects pose not only a risk to the driver and passengers of the affected vehicle, but also to anyone in the path of that vehicle.
Now that we’ve identified the defect we’re all safe, right? Not so fast.
While much of the discussion this year has centered on the failure of automakers and regulators to detect defects – there is another element of the recall discussion that hasn’t receive much attention. That is the completion rates associated with a campaign or the rate in which vehicles are repaired.
In light of the increased attention around recalls many automakers have went above and beyond the statutory requirements of First Class Mail notification. Some, like Honda, are calling and emailing their owners. While it is too early to tell if these efforts are producing higher completion rates we know that on average completion rates have been less than optimal especially given NHTSA’s goal of 100% completion rate for any campaign.
Crunch the data, Use the data
According to a June, 2011 GAO review of NHTSA’s recall process found that “on average about 70 percent of all vehicles subject to a recall are fixed within the 18-month period during which manufacturers provide recall completion data to the agency. However, analysis of NHTSA’s completion rate data for passenger vehicle recalls from 2000 through 2008 found considerable underlying variation in completion rates in several areas.”
They go further to say that for specific components like air bags, something we are very familiar with today, the completion rate was lower than the average – in the case of air bags, 60%. The agency recommended that NHTSA further explore why some components had higher rates of completion to try and uncover and trends that might improve those with lower rates.
How I would improve recall completion rates
While automakers and NHTSA try to come up with something like a bigger, brighter red recall envelope I will recommend 5 ways to improve recall rates today
1. Automobile Insurers
Any insurance agency that provides automobile insurance should update their Terms of Coverage stating if an owner knowingly operates a vehicle open safety recall they risk having their policy terminated and/or potential non-coverage in the event of an accident caused by that defect. Also, the insurer could develop an API that would connect to NHTSA’s VIN Look-Up Tool (this needs to be coordinated with NHTSA as the use of the API and recall data was limited in the rulemaking process) to determine if any VINs covered by the insurer currently have open safety recalls. This would allow the insurer to inform the owner of the recall while also reminding the owners of their Terms of Coverage to include loss of coverage.
2. Car-Buying Websites
Over 78% of Americans do some form of online homework before purchasing a vehicle. Car-buying websites, like Cars.com, Edmunds.com, TrueCar, etc. should look to incorporate a data field in the used car listing that queries NHTSA’s VIN Look-Up Tool to display any open safety recalls associated with both dealer-listed and private party ads. While this may discourage some from listing their vehicle, especially if they have open safety recalls, it would give that car-buying website a competitive advantage while also garnering good will from consumers.
3. State Certifications
Many states have various inspection requirements for vehicles to ensure all the proper safety and emissions equipment are installed and working. States should consider adding a requirement to resolve any outstanding safety recalls. Inspectors could use NHTSA’s VIN Look-Up Tool to determine if the vehicle has an open safety recall. If the vehicle does, the inspector would issue a 30 day temporary waiver during which time the defect should be remedied and the vehicle inspected again.
4. Mobile Repair (a la Tesla Rangers)
When your Tesla Model S isn’t working Tesla sends out a regional repair tech called Rangers to see what is going wrong and hopefully resolve it on the spot. Now, this type of mobile service won’t work for many recalls as they typically involve components that require a vehicle to be placed on a lift or require unique non-portable mechanical equipment – but in the case of a component that doesn’t require those things why not have a technician schedule a time to repair the car that is easiest for the owner reliving them from the 4-12 hour stint at the dealer.
This is the most extreme (and slightly absurd) method to reaching 100% completion rate and it isn’t one I think would ever happen, nor am I a big supporter of it, but it has proven to be successful in other places. In Germany, automotive regulators, have the authority to impound vehicles who fail to have safety defects addressed in a timely manner. Can you imagine NHTSA sending a tow truck to your house to pick up your car?
Remember the goal
A few of these ideas are not feasible and even the ones that appear feasible would take a great deal of effort, time and money. But these are just that – ideas. But they’re a start to finding a solution for a problem that will only be compounded as we identify more defects.
Remember the goal here isn’t to identify defects, but to repair those defects.