Effect the Second-Smallest Amount of Recalls Since 2000 Left on the Used Market

While federal officials found the amount of recalls last year ended up as the second-smallest tally since 2000, Kelley Book Book analysts think the figure resulted in little impact on the used-vehicle market, especially in terms of pricing and shopping activity.

The National Highway Traffic Safety Administration determined manufacturers filed more than 650 safety recalls, affecting more than 17.8 million vehicles, child seats and vehicle equipment during 2012.

Alec Gutierrez, senior market analyst of automotive insights at KBB, explained why the recall amount “played little to no role” in used-vehicle pricing last year.

“Consumers have come to expect recalls as a part of the new-vehicle ownership process, and actually view them favorably when an auto manufacturer voluntarily issues a recall,” Gutierrez said. “It shows that a brand is acting proactively to ensure consumers have as few issues as possible with their new-vehicle purchase.”

Gutierrez pointed out that used-vehicle values stayed strong in 2012, finishing the year by ticking up 5 percent on a year-over-year basis.

“Supply continues to be the driving force behind fluctuations in used-car values, and with a strong need for late-model used vehicles still out there, dealers and consumers alike have not let recalls influence their preferences and ultimately, the prices paid,” Gutierrez said.

As Gutierrez noted, Toyota had more recalls than any other manufacturer last year. NHTSA said the automaker recalled 5,330,643 units in a dozen campaigns during 2012. Next closest in the amount of vehicles recalled according to federal data was Honda, which recalled 3,363,343 units through 16 different campaigns.

The agency indicated that Ford had the most individual recall campaigns last year with a total of 24, which covered a total of 1,398,837 units. General Motors was next with 17 campaigns for 1,476,319 units.

While Toyota’s recalls covered more vehicles than the 2012 campaigns of all three domestic OEMs combined, Gutierrez pointed out it still won Kelley Blue Book’s overall brand winner for the recently announced 2013 Best Resale Value Awards. 

“Furthermore Toyota was among the top researched brands on KBB.com, and consistently holds its value better than competitors in nearly every segment. Toyota also increased market share and was the No. 1 retail selling brand several months last year,” Gutierrez said.

Arthur Henry, manager of market intelligence for KBB.com elaborated further about the connection between recalls and shopper activity on the site.

“Automotive recalls have an effect on new- and used-car shopping activity to varying degrees. The more prolonged and high-profile the recall, the greater the effect. However, as soon as the news story becomes mute, KBB.com traffic will return to normal levels,” Henry said.

NHTSA determined the 2012 level marked a slight rise from the previous year when 17,282,107 units were recalled. The amount is still a fraction of some of the high points the agency mentioned in its data that goes back to 1966.

Some of the highest totals ever reports came in 1981 (31,000,131 units), 2000 (44,615,540 units) and 2004 (33,009,036 units). The all-time high was established in 1999 (55,560,458 units).