A method for improving a failure mode diagnostic of an electric power steering system by overcoming a motor electric lock condition due to position sensor signal corruption or other motor faults. If certain conditions are met, the method determines that the motor is in an electric lock condition, and then reduces a torque current command to the motor so that it is able to be rotated by a vehicle hand-wheel. Once the motor is able to be rotated, then the method determines whether certain conditions have been met to determine whether the position sensor is malfunctioning.