Do Open Recalls Change a Car’s Trade-in Value?

So you have your eye on a new car. But when you search your old car’s VIN, you find it has an open recall. Will this hurt your old trade-in’s value? Is there anything you can do? Read on for car buying tips.

A dealer may choose to offer you less for a trade-in with an open recall. But a savvy shopper can have most recalls rectified before trading. This way, recalls won’t hurt the used car’s value. Sometimes, a resolved recall can improve the value of a vehicle on the used car market. However, owning a car with a recent recall that the manufacturer has not yet solved may trap you with a low trade-in value for several months.

Why Open Recalls Decrease Trade-In Value

Second hand car salesman Vincent McCann admires a 1979 Bentley with a customer, UK, 1992. (Photo by Tom Stoddart Archive/Getty Images) Do open recalls change a car's trade-in value?
Second hand car salesman admires a 1979 Bentley with a customer | Photo by Tom Stoddart Archive/Getty Images

A small, independent used car dealer must buy vehicles cheaply and quickly sell them for more. If a used car dealer takes on a car with an open recall, they must contact a franchised dealership to have the recalled issue taken care of. In this case, the dealer will lose valuable time before selling the car. 

In some states, a used car dealer can sell a car with an open recall. The salesperson must choose between telling prospective buyers about the recall–possibly scaring them off–or not tell prospective customers. In a business built on trust, this final option is a non-starter for many salespeople. One used car dealer said he avoids buying vehicles with recalls because “I don’t want to get stuck with a car that is going to be difficult to sell.”

Franchised, new car dealerships have technicians and service centers equipped to take care of open recalls. Does this mean a new car dealership will happily take a trade-in with an open recall? Not always. 

When a manufacturer issues a recall, it provides its dealerships with any necessary new parts. It also commits to pay dealerships for labor. But this monetary factory reimbursement is often “dismal.” Worse for car dealerships, they are required to repair every recalled vehicle a customer brings in. This ties up technicians and maintenance bays, delaying higher-paying work.

It is no wonder that when you bring a recalled vehicle into a dealership, they are not always happy to see you. Sadly, if you offer a trade-in with an open recall, they are not obligated to pay you top dollar–or accept your car at all.

Maximize Trade-In Value By Repairing Recalls First

08 April 2019, North Rhine-Westphalia, Essen: A Jaguar XK 120 from 1949 repaired in the Jaguar Landrover Classic Center by workshop master Marco Walter. The car dealership for English classic cars also shows its cars at the Techno-Classica trade fair. Photo: Roland Weihrauch/dpa (Photo by Roland Weihrauch/picture alliance via Getty Images) Do open recalls change a car's trade-in value?
A Jaguar XK 120 from 1949 being repaired | Photo by Roland Weihrauch/picture alliance via Getty Images

First, establish whether your used car is subject to any open recalls. Search your VIN on the National Highway Traffic Safety Administrations online VIN Check or SaferCar App. You can also see NHTSA’s recall history. You can even check your vehicle manufacturer’s website.

Second, contact a franchised dealership to have the vehicle repaired. If you bought your car new, call the dealership where you purchased it. If you purchased your car used, contact the nearest new car dealership carrying the same brand. If the nearest dealer cannot repair your vehicle soon, you may try a dealership further away.

After your vehicle is repaired, you can trade it in at the new car dealership, a used car dealership, or even sell it private-party with a clear conscience. If you are listing your car online, be sure to include any recent recall repair work completed. Buyers will be happy to know your dealer installed new and improved parts–your vehicle’s value may even increase.

Can You Trade-In An Unsolved Recall?

A second hand car salesman and a man admiring brand new Triumph TR2s in the UK. Photo by Lambert/Getty Images. Do open recalls change a cars trade-in value.
A Triumph car lot | Photo by Lambert/Getty Images

One car owner wrote to Jalopnik about an unfortunate situation. This 2014 Audi A6 TDI driver tried to trade in their car and found it had an open recall for the passenger seat’s occupant sensor. To make matters worse, Audi had announced the recall for the faulty sensor–which could prevent the airbag from deploying–but had yet to send replacement parts to dealerships to fix the problem. 

The dealership told the owner that they could not resell the car. They added that they would not wait for parts to arrive, planning instead to sell the used car at its wholesale value. They then offered a meager trade-in value. Unfortunately, even franchised dealers are not obliged to buy a trade-in they think they cannot sell.

If your car has an as-yet unresolved recall, you have three options. You can keep your old car until your dealership has a solution to the recall. Or you can try to trade it in at a lower value. If you tell your salesperson that trade-in value may make the difference between your buying a new car or having to wait, they will do their best to take your trade-in. Finally, you can try to sell your old car to a private buyer. But make sure to tell the buyer about the open recall–otherwise, you might face a lawsuit.

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