Senate & House Consider Bills To Force Rental Companies To Repair Recalled Cars

May 6, 2015

Rental car companies like Avis and Hertz aren't required to fix recalled vehicles before loaning them to customers. Several years ago, that yielded tragic results for Raechel and Jacqueline Houck, two sisters who were killed after unknowingly renting a recalled car from Enterprise Rent-A-Car.

The Houck sisters' vehicle caught fire because of a power steering fluid leak -- the exact problem that had caused the recall. As a result, they lost control of the vehicle, which led to a fatal accident.

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Numerous times, Congress has considered legislation that would change rental car laws and force companies like Enterprise to repair vehicles, but so far, every such bill has failed. Detroit News reports that new legislation has been proposed by four U.S. Senators and four of their colleagues in the House -- though we're not entirely optimistic about either's chance of success.

BACKSTORY

The family of the Houck sisters helped lobby for the "Raechel and Jacqueline Houck Safe Rental Car Act of 2011". It was tacked onto a massive surface transportation bill that was approved in 2012, but the Houck amendment didn't make the final cut.

How is that possible? In this age of increased transparency, when the slightest corporate screw up can unleash a massive Facebook backlash, how has this kind of bill not passed? Simple: Rental car companies are opposed to it. They don't want to lose inventory and potential rentals by hauling cars to dealerships the minute they've been recalled.

More astoundingly, automakers have expressed reservations about these bills, too. Why? Because some car companies think that they'd be obligated to move vehicles from rental firms to the front of the repair line or face lawsuits from those companies over loss of revenue.

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Late last week, four Senators -- Barbara Boxer (D-CA), Claire McCaskill (D-MO), Bill Nelson (D-FL), and Charles E. Schumer (D-NY) -- revived the Raechel and Jacqueline Houck Safe Rental Car Act. Four of their colleagues in the House -- G.K. Butterfield (D-NC), Lois Capps (D-CA), Walter B. Jones (R-NC), and Jan Schakowsky, (D-IL) -- have sponsored a similar bill. 

The bills appear to be identical to the previous version proposed in 2011. So, what are the chances that either will pass in 2015?

On the one hand, the timing is excellent for the bills' supporters. Last year saw a record number of recalls -- nearly 64 million in the U.S. alone -- and many of those recalls resulted from problems that proved deadly to passengers. In other words, elected officials and their constituents are both aware of the potentially fatal results of failing to fix flawed vehicles. 

Also, sponsors say that automakers have changed their tune, expressing support for the bills. President Obama and the National Highway Traffic Safety Administration are in favor of them, too. They've included this legislation as part of the massive, Department of Transportation-sponsored GROW AMERICA Act

On the other hand, you'll note that seven of the eight sponsors of these two bills are Democrats at a time when Republicans control both houses of Congress. We're not saying that the two parties can't find middle ground on certain issues, but it's very, very rare -- and getting rarer by the day.

And last but not least, the National Automobile Dealers Association has expressed skepticism about bills like these, because recent iterations have held used car dealers to the same standards as new car dealers. In particular, they would require used car dealers to fix recalled vehicles before selling them -- something they're not currently obligated to do. That seems like common sense to many of us, but NADA has proven to be tone-deaf now and then.

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