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First GM, now Toyota — why car recalls are becoming more common

The General Motors world headquarters complex November 18, 2010 in Detroit, Michigan.
The General Motors world headquarters complex November 18, 2010 in Detroit, Michigan.
Bill Pugliano/Getty Images

It's not just your imagination. More and more automakers are recalling vehicles because of safety problems and defects right now.

It's only April, but automakers have already recalled 13 million vehicles in the US this year — informing drivers that their cars have potentially dangerous flaws and repairing them for free. Car companies are on pace to break the record for recalls in a single year.

This includes the infamous General Motors recall, in which the company recalled 2.6 million vehicles with a faulty ignition switch that had been linked to 13 deaths. (GM is in trouble for not recalling those vehicles earlier.) But it's not just GM. There was a big April 9 recall by Toyota, which called back 1.8 million US vehicles over problems with airbags and seat rails. Plus Ford, Volkswagen, Nissan, and Honda.

Why the sudden spate of recalls? For one, automakers don't want to get stuck in GM's position — waiting too long before identifying a deadly problem and then facing a criminal probe. Plus, some automakers figure now's a good time to issue recalls — while all the heat is on GM. But there's another possibility: as companies have cut costs over the years, analysts say, they've built cars that are potentially more prone to problems.

Why auto recalls are on the rise

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Automakers typically recall cars or trucks when they've identified a defect that could jeopardize public safety.

That's not always a simple decision, though. Many problems are obvious hazards — like faulty airbags. Other defects, however, are less clear-cut. What if a car has windshield wipers that, under very rare conditions, might become improperly torqued? (Toyota faced this situation last year.) Should the company issue a costly recall? Or let it slide?

Different automakers make different calculations in those close-call situations. But since the 1990s, a growing number of companies are erring on the side of issuing a recall — even for seemingly minor problems.

One reason: the federal TREAD Act, passed in 2000, requires automakers to promptly alert regulators about any potential problems rather than waiting for customer complaints. (Most recalls are voluntary, though an increasing number are initiated by regulators.)

Another factor: in recent years, US regulators have been more assertive about treating car safety issues as potential criminal matters. In March 2014, Toyota had to pay $1.2 billion to the Justice Department after allegedly concealing evidence about a deadly unintended-acceleration problem in its vehicles. Likewise, GM is now facing a federal criminal probe over allegations that it waited too long to disclose ignition-switch defects in its vehicles.

Those crackdowns may have helped spur the recent recall frenzy. "Given the sensitivity around auto safety in the last five years, it should be no surprise that we see as many recalls as we do today," said Jessica Caldwell, an analyst at Edmunds.com.

Do cars have more problems than they used to?

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Toyota recalled 650,000 Toyota Prius hybrids in 2010 to repair cooling pumps that could fail and cause the vehicle to overheat and lose power. Justin Sullivan/Getty Images

Another question is whether auto recalls are increasing because the cars themselves are becoming more unreliable.

At first glance, this seems unlikely. After all, consumer surveys from J.D. Power and Associates have found that US cars actually became more dependable between 1998 and 2012.

But there are subtle twists that might affect the number of recalls. Karl Brauer, a senior analyst at Kelley Blue Book, points out that auto companies have been trying to cut costs in recent years by using the same parts across multiple vehicles.

The downside? If a particular part is faulty, then the problem will affect many more models. After Toyota had to recall 5.3 million vehicles in 2013, it blamed the fact that a single defective part had been used in a number of different popular models. And, in 2013, the same defective airbag used by BMW, GM, and Toyota forced all three automakers to issue recalls.

Recalls also never work perfectly...

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Ford announced the recall of over 400,000 2013 models of cars and SUVs, including the Fusion, Escape and Taurus models for a possible fuel tank leak that could cause fires. Justin Sullivan/Getty Images.

Here's another important fact about recalls: they're never perfect. Usually, auto makers send out a recall notice to car dealerships and hope that about 70 percent of drivers bring in their vehicles for repairs. 70 percent is considered a good rate, analysts say.

Why only 70 percent? Plenty of drivers never hear about the recall in the first place — especially if they've bought the car second- or third-hand. (The notice often goes to the original owner.) And other drivers can't be bothered to bring their car in for repairs. "Usually about one-third of cars will never get addressed," says Brauer.

That's one reason why it was a big deal that GM waited so long to recall its vehicles over the faulty ignition switch — as the years go by, people sell or trade in their defective cars and it becomes much harder for companies to identify the owners. (GM, for its part, says that it's currently poring through registration data to try to find and notify as many owners as possible.)

Further reading: Popular Mechanics has a nice list of the five most notorious car recall campaigns of all time.