Automakers & Auto Dealers Oppose Recall Bill For Rental Cars

May 24, 2013

For years, advocates have been pushing for legislation that would require rental car companies to fix recalled vehicles before loaning them to customers. The rental car industry helped kill such a bill last year, but a new version has been drafted, and it's now working its way through Congress. 

Only problem is, according to Detroit News, the rental car companies still hate it.

And so do automakers.

Earlier this week, the Senate Commerce subcommittee heard testimony from Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, which represents nearly all major automakers doing business in the U.S., including the Detroit Three. He expressed concern that the new bill would have one of two unpleasant consequences, and possibly both:

  • It could force automakers to prioritize repairs on vehicles owned by rental companies, putting vehicles owned by individuals and other corporations at the back of the line.
  • It could encourage rental companies to sue automakers for loss of revenue if their vehicles aren't repaired lickety-split.

Speaking for the National Association of Automobile Dealers, President Peter Welch said that the policy of providing loaner cars during recalls could be cost-prohibitive if immediate repairs are required on rental fleets. He pointed out that some recalls are more dire than others, and that while some issues make vehicles unsafe to drive, others don't. Treating the former and the latter the same doesn't make sense.

Both Bainwol and Welch were criticized by legislators. Senator Barbara Boxer (D-CA) attacked Bainwol, insisting that he had made assumptions about the bill that simply weren't part of its language.

Senator Claire McKaskill (D-MO), who chairs the subcommittee, thought it very unlikely that rental agencies would sue the very companies they depend on for favorable deals on fleet vehicles. She also pointed out that automakers and dealers would face a public relations backlash for opposing a bill that offers such important consumer protections.

David Strickland, head of the National Highway Traffic Safety Administration, spoke in favor of the bill. He pointed out that rental companies only repair about 50% of their cars within the first four months of a recall being issued. A year after those notices go out, the figure sits at just 60%. 


On the one hand, we can see Welch's point: some recalls are more important than others. Though there's a lot of gray area between "extremely urgent" and "it can wait" recalls, there are at least one or two people on Capitol Hill with the requisite brainpower to devise some useful system of classification.

On the other hand, it is hugely important that this bill -- or some version of it -- work its way through Congress. It's one thing for consumers to skip repairing their own vehicles after receiving recall notices. It's another thing entirely for rental companies to shirk responsibility and put drivers behind the wheels of damaged vehicles they know nothing about. Such laziness can have tragic, fatal results.


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