Should Rental Companies Be Required To Fix Recalled Cars? (UPDATED)

February 24, 2012
Enterprise Rent-A-Car

Enterprise Rent-A-Car

UPDATED: See below

In 2004, Raechel and Jacqueline Houck rented a Chrysler PT Cruiser from Enterprise Rent-A-Car -- a vehicle that had been recalled for a power steering fluid leak. While driving, the leaking fluid caught fire, which caused the sisters to lose control of the car and collide with a big rig. Both women were killed. 

Today, there is a law pending in Congress that would force rental companies to ground recalled vehicles. According to a report in USA Today, it comes in the form of an amendment to a transportation bill that Congress will begin discussing after it reconvenes next week.

The amendment would give the National Highway Traffic Safety Administration control over the way in which rental companies like Enterprise manage recalls. That makes sense, since the NHTSA is the agency charged with establishing standards for motor vehicle safety and for overseeing recalls.

The amendment -- known as the "Raechel and Jacqueline Houck Safe Rental Car Act of 2011" is supported by a number of legislators, as well as the Houck's mother, Cally, and the advocacy group Consumers for Auto Reliability and Safety. However, Ms. Houck claims that even though Enterprise admitted fault in the accident that killed her daughters, the company is lobbying against the legislation, and she has started a petition to bring attention to that fact.*

What it does

If passed, the Raechel and Jacqueline Houck Safe Rental Car Act would do several things. Chief among them:

1) It would prevent companies from renting, leasing, or selling recalled vehicles from the date that companies receive notice of the recall.

2) It would require that companies immediately provide alternate vehicles to rental customers who are already in possession of recalled models.

3) It would require the NHTSA to gather data on "safety features that are normally included in the sales of such motor vehicles to consumers" but which rental companies occasionally decline. (For example: side-curtain airbags are commonly purchased by retail customers, but to save money, rental car companies may opt not to get them.) How this will affect the way rental cars are sold to consumers in the future remains to be seen.

The pros, the cons, and the outcome

It's hard to argue against this kind of legislation. Some might say that certain recalls -- like the mis-labeling of proper inflation pressure for spare tires -- are less urgent than others, and that lumping them all into the same category seems silly. But then, one blowout on a rental car, and those folks might change their tunes.

An extreme libertarian could argue that the bill enlarges an already-bloated government and allows a federal agency to meddle in the affairs of private business. But does that person trust her rental car company to care for the thousands of rides in its fleet with the same attention to detail that she gives the one car in her own garage?

Rental car companies like Hertz insist that they absolutely do not rent vehicles that are under recall. Enterprise, however, says that it has "a team of senior executives" who review recalls to see if there's an interim fix available. That seems sensible for less-urgent recalls -- but then again, what counts as a "less-urgent recall"? Isn't a recall urgent by definition? And can consumers always count on rental companies to be conservative in favor of customer safety? That old image of a mysterious car under Enterprise wraps carries some unfortunate resonance.

Similar bits of legislation have come up before at the state level, but they've not met with much success. However, Hertz has expressed support of the Raechel and Jacqueline Houck Safe Rental Car Act, and with the Houck's mother leading the charge, it may be difficult for legislators to say "no" -- unless of course, they table the full transportation bill. Which isn't out of the question, given how many people on the left and the right have criticized the bill. Even Ray LaHood says it's "the worst transportation bill" he's seen in decades.

We'll keep you posted.

* UPDATE: We just received a statement from Laura Bryant with Enterprise Holdings indicating that, as of yesterday, Enterprise announced "formal support for federal legislation to oversee the way car rental companies manage the safety recall process for vehicles in their fleets". (Which, BTW, is not quite the same as saying that Enterprise supports the Raechel and Jacqueline Houck Safe Rental Car Act in particular). Here's an excerpt from her email.

For the past two years there has been an ongoing discussion about this issue – a discussion that began in earnest following the resolution of a lawsuit in which Enterprise Rent-A-Car accepted responsibility for an accident involving one of its vehicles that claimed the lives of two young women, sisters Raechel and Jacqueline Houck.  The vehicle was under recall at the time. The tragedy of the Houck sisters’ deaths can never be undone, and all of us at Enterprise are profoundly sorry.

Through the court process we accepted responsibility for the accident, and since the accident in 2004, Enterprise and others in our industry have made many significant changes and improvements in the process for inspecting and repairing recalled vehicles. Then, as now, we wanted to ensure that this tragedy is never repeated. Given all the changes and improvements we have made since that fatal crash, today that vehicle would never be rented.

Today, our customers can rest assured that we have the operating procedures and policies in place to ensure that the vehicles they rent from us are properly maintained and meet the highest standards for safety.

But even with all of these safeguards, a number of individuals and organizations have asked for additional oversight in the form of federal legislation. In the past, we believed that this step was unnecessary, but a growing number of people, including our customers and business partners, clearly want more assurance on this critical issue. We hear them – and what we’ve heard has caused us to rethink our stance. 

[h/t JV]

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