Understanding U.S. Vehicle Recall Laws — What Dealers Need to Know in 2025

In 2025, vehicle recalls remain a critical focus in the automotive world, affecting everything from dealership compliance to customer safety. With federal oversight tightening and states adopting more rigorous standards, it's essential for automotive retailers to understand how these laws work and how new technologies are reshaping recall management.

From legal obligations to digital innovation, here’s what every dealership should know and how BizzyCar is driving both compliance and customer engagement forward.

What Is a Vehicle Recall?

A vehicle recall is issued when a vehicle, part, or equipment is found to contain a safety-related defect or fails to meet Federal Motor Vehicle Safety Standards (FMVSS).

Commonly affected systems include:

• Airbags

• Brakes

• Fuel systems

• Steering components

• Seat belts

• Tires

Recalls can be:

• Voluntary – initiated by manufacturers

• Mandatory – ordered by the National Highway Traffic Safety Administration (NHTSA) after an investigation

The State of Vehicle Recalls in 2025

If it feels like recalls are on the rise, you're absolutely right. According to our BizzyCar Q2 2025 Recall Report, over 7.3 million vehicles were recalled in just the first half of 2025! This sharp increase highlights the growing complexity of modern vehicles and the heightened attention regulators and automakers are placing on safety and compliance.

Key trends from the report include:

• A surge in recalls related to electronic systems and electronic components

• OEMs acting faster to issue voluntary recalls in an effort to avoid regulatory penalties

• Dealerships being overwhelmed by manual recall processes and outdated notification channels, leading to missed opportunities and compliance risks

With recall volume at historically high levels, it's no longer a question of if a dealership will be impacted, but how well prepared it is to respond.

The Legal Framework Behind Recalls

There are two core federal laws that govern how recalls are handled in the U.S.:

1. National Traffic and Motor Vehicle Safety Act of 1966

This act granted NHTSA the authority to:

• Establish motor vehicle safety standards

• Require manufacturers to recall vehicles or parts that pose safety risks

2. 49 U.S. Code Chapter 301

This outlines:

• The responsibilities of manufacturers to report defects and initiate recalls

• The requirement to provide free remedies to affected consumers

• Civil penalties for failing to meet recall obligations

Manufacturer Responsibilities

When a safety defect is identified, manufacturers must:

• Notify NHTSA within 5 business days

• Send recall notifications to owners, dealers, and distributors, traditionally through first-class mail

• Offer a no-cost remedy, such as:

  • Repairing the issue

  • Replacing the part or vehicle

  • Refunding the original purchase price

Why Texting Is Now the Most Effective Recall Notification Method

Although notification by mail remains the federally mandated standard, it is no longer the most effective way to reach modern consumers. Mail often goes unopened, gets delayed or lost, and typically lacks urgency, especially when compared to digital communication methods.

Worse yet, mail notifications must be sent within 5 business days of defect acknowledgment, even if no fix or parts are yet available. This often results in confused customers showing up to the dealership unannounced, expecting service that can’t be delivered immediately. These walk-ins:

• Disrupt service operations

• Cause longer wait times

• Lead to frustrated customers and negative experiences

In contrast, text messaging is a game-changer:

• Captures attention instantly, with over 90% of texts read within minutes

• Prompts action through proactive AI messaging that books the appointment directly

• Allows for smarter timing, so you notify customers only when parts and fixes are available, reducing chaos and improving satisfaction

BizzyCar Solves This With Automation

BizzyCar’s platform transforms recall communications by automating the entire process and intelligently syncing notifications with service readiness.

Dealers can:

• Identify open recalls by VIN across their DMS

• Send personalized messages via SMS, triggered at the right time

• Enable hands-free appointment scheduling with no links or staff intervention

• Prevent walk-ins by coordinating part availability and staffing ahead of time

This approach leads to:

• Higher engagement rates

• Faster appointment scheduling

• Increased recall completion rates

• Fewer service disruptions

• Smoother operations

• Happier customers

All while ensuring your dealership stays fully compliant with federal and state regulations.

BizzyCar Is Pushing for Policy Change

BizzyCar is not just helping dealers execute better recall outreach, we are also helping to shape the future of how recalls are communicated.

In a major step forward, Ryan Maher, CEO of BizzyCar, recently traveled to Capitol Hill to support a new NHTSA rule that would allow digital-first recall communications, including text messaging as the initial notification method. This initiative is part of a broader push to modernize outdated recall processes that no longer match consumer communication habits.

Read the full story: Modernizing Recall Communications: BizzyCar Supports NHTSA Rule Advancing Congressional Mandates

Dealership Responsibilities

Dealerships have their own set of legal duties when it comes to recalls:

• Do not sell or deliver new vehicles with open recalls

• Disclose open recalls on used vehicles, and in certain states (like California), repair them before sale

• Document all recall activity thoroughly

Penalties for failing to comply can include:

• Fines of over $26,000 per vehicle, with total penalties exceeding $130 million

• Brand damage and lawsuits

• Loss of consumer trust and service revenue

Consumer Rights

Consumers are entitled to:

• Free recall repairs, regardless of vehicle age or warranty status

• Use of the NHTSA VIN Lookup Tool to check for recalls: nhtsa.gov/recalls

• The ability to file complaints, which can trigger new investigations

Manual Recall Management Is Outdated — Here's What Dealers Need Instead

With millions of vehicles under active recall and new safety issues emerging regularly, dealerships can no longer afford to rely on spreadsheets, manual outreach, or disconnected systems. These outdated methods lead to missed opportunities, compliance risks, and unhappy customers.

That’s why leading dealers are turning to BizzyCar’s Automated Recall Management Platform, a modern, fully integrated solution built for the realities of 2025.

BizzyCar delivers:

• Direct OEM Data Access
  Leverages OEM partnerships for nightly updates to identify vehicles with open recalls in your database

• AI-Powered SMS Communication
  Automatically engages customers via personalized texting, answering questions and guiding them through the process without requiring human intervention

• Hands-Free Appointment Scheduling
  BizzyCar’s AI communicates directly with the customer, sets the appointment, and adds it automatically to your dealership’s service scheduler and DMS — no links, no extra steps, and no staff needed

• Built-In Compliance
  Ensures alignment with federal and state recall regulations, protecting your dealership from costly fines

• Customer Retention Engine
  Re-engages lost or inactive customers, often those who haven’t visited in 600+ days, and brings them back into your service drive

• Revenue Optimization
  Maximizes every recall visit by surfacing additional service opportunities, increasing average repair order value

Final Thoughts

Recalls are more than a compliance obligation. They’re an opportunity to:

• Re-engage lapsed customers

• Demonstrate your commitment to safety

• Increase service revenue through proactive communication

By embracing automated platforms like BizzyCar and supporting initiatives that prioritize digital-first outreach, dealerships can stay compliant, save time, and build stronger relationships with customers.

Ready to modernize your recall strategy?

Schedule a demo today and learn how BizzyCar can turn recall compliance into a competitive advantage.