Published on May 7, 2014

Ariz. Chevy dealer probed for recalled car sale

(General Motors Co. photo)
GM recalled 38,197 of the 2013 Chevy Malibu Eco for malfunctioning generator control modules.

By Gabe Nelson, Crain News Service

WASHINGTON (May 7, 2014) — A suburban Phoenix Chevrolet dealership is under federal investigation, accused of selling a recalled car without doing repairs that General Motors Co. ordered last year.

Sands Chevrolet of Surprise, Ariz., is believed to have “sold and delivered at least one new vehicle to a customer without having had all required safety recall repairs performed on that vehicle,” the National Highway Traffic Safety Administration (NHTSA) said in an audit notice posted May 6 on its website.

GM’s recall affected 38,197 units of the 2013 Chevrolet Malibu Eco and the 2012-13 Buick Lacrosse and Regal built before December 2012. Sands Chevrolet doesn’t sell new Buicks. The cars were equipped with GM’s eAssist mild-hybrid system, which uses a battery in the trunk.

When it recalled the cars last May, GM said a malfunctioning generator control module could drain the battery, usually within the first 1,000 miles of operation. If the driver ignored a warning light, the engine could stall. In severe cases, it could lead to “a burning or melting odor, smoke and, in rare instances, a fire in the trunk.”

It’s against federal law for a retailer to sell a recalled vehicle that hasn’t been repaired. Federal lawmakers are proposing to extend that ban to rental and loaner vehicles as well.

The two-store Sands Chevrolet group, which also includes a dealership in nearby Glendale, Ariz., is led by Louis “Buzz” Sands. His family opened its first Chevy dealership in Phoenix in 1934. Mr. Sands, who has donated more than $10 million toward scholarships, a computer lab and football facilities at the University of Arizona, was a nominee for the Time Dealer of the Year Award in 2014.

A spokesman for GM and John Thomas, listed on Sands Chevrolet’s website as the general manager of the Surprise store, didn’t immediately reply to email messages seeking comment on the audit.

Audited dealers often settle with NHTSA rather than let the audit continue.

Last year, NHTSA reached a $125,000 settlement with Southern Honda Powersports, a motorcycle dealer in Chattanooga, Tenn., accused of selling 329 motorcycles without first doing recall repairs. That was significantly less than the maximum civil penalty it faced, which was $6,000 per vehicle sold.

In November 2012, NHTSA increased the penalty to $7,000 per vehicle sold.

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This report appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business.

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