Tipline Investigation: Buying a car from north of the border falls into a gray area

SANTA BARBARA, Calif. - People thinking about buying a used vehicle these days will probably run a Google search first, check Carfax and maybe get a pre-purchase inspection. But even then, some unexpected problems fall into a gray area.

Victor Sanchez purchased a 2015 Mercedes Benz C63 AMG S, a luxury sports car equipped with 500 plus horsepower, in October, 2017 from a dealer in San Luis Obispo. Weeks later, he received a safety recall notice. He needed other work done, so he took it to Mercedes.

“They worked on the factory warranty issues no problem, but they say they could not do the recall and they weren’t sure why,” said Sanchez.

The car was originally sold in Canada and then brought to the U.S without going through Mercedes USA, so that makes it a ‘gray market’ car. 

“No, we can’t do the recall because the car is Canadian. So Mercedes Benz USA won’t honor the recalls of a foreign vehicle,” said Sanchez as he described what Mercedes representatives told him at first.

Sanchez admits the used car dealer that sold him the car disclosed that it was Canadian after he noticed all of the numbers in the vehicle were metric system.

“I was not worried since it was still under factory warranty and the car had been serviced at Mercedes Benz. Also, they showed me the Carfax which seems to be pretty reliable and it didn’t show any issues,” said Sanchez

Plus, Sanchez said the car has U.S. and California inspection stickers. However, the recall, a safety problem with the vehicle’s software, made Sanchez very nervous and rightfully so. 

“I want my money back,” said Sanchez.

Sanchez said he went back to the used car dealership that sold him the car. It offered a trade-in allowance that was $30,000 less than what he had paid just six months before. Mercedes Benz USA declined to buy the car or do the recall repairs. Sanchez said he even offered to pay for the recall work out of his own pocket. Mercedes declined again. Instead, he was told to put it on a flatbed truck and ship it back to Canada.

“So the closest dealership for me is 1,200 miles away,” said Sanchez.

Instead, he called the NewsChannel Tipline and we contacted Mercedes Benz USA in Atlanta. We received a written statement that reads in part: 

“Since there are subtle, but sometimes important differences in the hardware and software found in Canadian and US vehicles, additional training and specialized tools may be required for US dealership technicians to complete recall work and other repairs beyond basic maintenance on Canadian specification vehicles.”

That makes sense, but if that’s the case, how could a Mercedes Benz dealership work on the car at all? Sanchez said they’ve serviced the vehicle for maintenance and even factory warranty repairs in the U.S. already, sometimes costing thousands of dollars.

A Mercedes representative told us it can get complicated. But, they eventually agreed to repair Sanchez’s safety recall.

“We are glad that Mr. Sanchez was able to work with our US dealer partner to address the only open recall campaign associated with his vehicle, a software update for the Electronic Stability Program (ESP) control unit.”

“I did a lot of work and then you did a lot more, you called the right numbers,” said Sanchez to NewsChannel Reporter C.J. Ward.

Sanchez said he did talk with attorneys who told him he had a good case against the used car dealership that sold him the car in the first place, but that he would probably end up spending tens of thousands of dollars in a legal fight.

Sanchez is selling the Mercedes, but he said if it doesn't sell he’ll just enjoy it because he says it is really fun to drive. Watch the entire story live tonight on NewsChannel at 6 & 11pm.

NewsChannel would like to thank Mercedes Benz USA and Santa Barbara Mercedes Benz for their assistance in resolving this problem for Mr. Sanchez. Here is the full written statement sent to NewsChannel for this story:

“Thank you for contacting us and we hope the following information will shed light on the matter regarding the 2015 Mercedes-AMG C63 S owned by Mr. Victor Sanchez. First off, we would like to note that the C-Class vehicle platform (W205) like that of Mr. Sanchez is not affected by the Takata airbag recall. We would also like to thank Mercedes-Benz of Santa Barbara for going above and beyond to assist Mr. Sanchez. Our records indicate the vehicle in question carries a Canadian Vehicle Identification Number (VIN) and was designed, assembled, and homologated to meet the regulations set forth by the Canadian Government. The vehicle was originally distributed for sale by Mercedes-Benz Canada and brought into the United States by a private party as a gray-market import and not by Mercedes-Benz USA, the exclusive importer of Mercedes-Benz vehicles in the US.

All recall actions associated with a vehicle are organized and tracked by its VIN. In this case, our colleagues at Mercedes-Benz Canada, under requirements of Canadian regulations, issue any recalls associated with Mr. Sanchez’s vehicle. Since there are subtle, but sometimes important differences in the hardware and software found in Canadian and US vehicles, additional training and specialized tools may be required for US dealership technicians to complete recall work and other repairs beyond basic maintenance on Canadian specification vehicles.

As noted in your initial outreach, the car was purchased by Mr. Sanchez pre-owned from an independent retailer and not an authorized Mercedes-Benz dealership. In addition, there is no record showing the vehicle has ever been serviced at any of our 383 US dealerships. There are certain advantages to visiting an authorized Mercedes-Benz dealership for service including, but not limited to the fact that any recall would have been addressed during the course of maintenance. However, we are glad that Mr. Sanchez was able to work with our US dealer partner to address the only open recall campaign associated with his vehicle, a software update for the Electronic Stability Program (ESP) control unit.”

If you have a problem and need help or a story idea contact the NewsChannel Tipline at 805-882-3903. We try to call back as many people as possible, unfortunately we can't get back to everyone. We apologize.