The recall by Toyota Motor Corp. of about 50,000 early-2003 Sequoia SUVs on Wednesday for an electronics problem spotlighted a little-known quirk of the auto industry.
Some drivers can find themselves paying to fix a defect that the automaker has known about for years and has repaired for others at no cost.
It turns out that Toyota discovered the problem — which could prevent the vehicle from accelerating as fast as the driver expects — within months of putting the Sequoia sport utility vehicle into production in 2003 and issued to its dealers what is known as a technical service bulletin explaining how to resolve the issue. Owners, however, were not notified.
People who complained about the problem quickly had their vehicles repaired under warranty. But others who waited past their warranty’s expiration or did not discover the infrequent problem until after that date had to pay for the fix, Toyota acknowledged. The company on Wednesday offered to reimburse those Sequoia owners who can produce a copy of a repair order.
“Unfortunately there are lots of examples of this. They are charging you to fix what they know is a defective car,” Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento consumer advocacy group that pushes for stricter automotive “lemon laws.”
Shahan said repairing the vehicles of some owners but not others might represent a violation of a California law prohibiting what she called “secret or hidden warranties.”
This type of situation “happens more often than people realize” and it’s “not fair,” said Karl Brauer, an analyst at auto information company Edmunds.com.
Brauer advised motorists to check an online database of the National Highway Traffic Safety Administration at www-odi.nhtsa.dot.gov/tsbs, where manufacturers are obligated to list their service bulletins.
Drivers who find their vehicle listed should ask their dealer to correct the problem as a matter of “good will and at no charge” even if the vehicle is technically beyond its warranty.
“It is the smart thing for both dealers and manufacturers to do,” Brauer said.
Now that Toyota has issued a recall, it is offering to reimburse all customers for repairing the Sequoias.
That’s different from the way the automaker handles technical service bulletins, whereby “if it is not under warranty the dealer is under no obligation to fix it for free,” said John Hanson, a Toyota spokesman. “This is the way the industry operates.”
A technical service bulletin, he said, is designed to tell dealers about the problem and how to fix it. If a customer complained about the issue, the dealer would be expected to make a repair during the warranty period and charge the expense to the automaker. But if the complaint came after the warranty expired, Toyota left it to the dealers to decide whether they wanted to fix the problem on their own dime or charge the customer for the repair.
This latest recall by Toyota will upgrade the software in the vehicle stability control system on the SUV. The electronic system is designed to prevent a loss of traction in turns as a result of front or rear tire slippage during cornering.
Toyota said that vehicles without the upgrade could experience the stability control system briefly activating at low speeds — less than 10 mph — as the Sequoia accelerates from a stop.
The automaker said there have been no reported injuries or accidents as a result of the condition. And Hanson said it did not represent a safety issue, something that federal safety officials dispute.
NHTSA spokeswoman Julia Piscitelli said the agency specifically asked Toyota “to issue a safety recall.”
Safety regulators began looking at the problem in late 2008 based on complaints to NHTSA and Toyota. NHTSA elevated its investigation to an engineering analysis in April 2009.
“Over the last 18 months, NHTSA has been investigating electronic stability control malfunctions which have turned up 163 safety-related failure incidents reported to Department of Transportation or Toyota,” Piscitelli said.
Filings by Toyota to NHTSA in February show that the automaker has been confronting problems with the Sequoia for years. The automaker has been the subject of seven lawsuits and received 1,291 complaints from vehicle owners about the operation of the electronic system.
A 2003 complaint revealed that as early as August of that year, Toyota had a “repair kit that was developed to assist in resolving concerns” related to the problem. Others complained of multiple, successive visits to dealerships for repairs that ultimately did not resolve the problem, followed by buyback requests that were denied by the automaker.
Toyota also reported that it has received 25,593 warranty claims for repairs related to the system on the 2003 Sequoia, compared with fewer than 3,300 for the 2004 and 2005 models of the same vehicle.
The automaker plans to send out letters to all owners of 2003 Sequoias next month informing them of the recall and refund program.
This month Toyota agreed to pay a $16.4-million fine to the federal government for failing to promptly disclose that gas pedals in eight models could stick and cause sudden acceleration. It was the largest fine on an automaker ever levied by NHTSA.
The automaker has issued roughly 10.5 million recall notices worldwide in the last seven months for a variety of problems including unintended acceleration and braking and corrosion problems.
Also earlier this month, Toyota said it would recall 9,400 Lexus GX 460 SUVs from the 2010 model year to correct a problem that could lead to a loss of control.
The stability-control problem was first identified by Consumer Reports magazine, which issued a blanket warning urging drivers not to buy the vehicle. And in another recent action, the automaker launched a voluntary recall involving about 600,000 Sienna minivans sold in the U.S. to address potential corrosion in the spare-tire carrier cable.
Times staff writer Ken Bensinger contributed to this report.