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Legislation Would Block Renting of Recalled Cars

Enterprise demands loopholes.

by on Aug.06, 2012

Enterprise continues to resist demands it repairs recalled vehicles before renting them.

Democratic lawmakers in both the House and Senate have introduced legislation that would require rental car companies to repair recalled vehicles before putting them back into their fleets.

The issue has become a hot topic when a jury slapped giant daily rental company Enterprise with a $15 million verdict, in 2010, after two young women were killed due to a defect that the firm had not repaired.  Enterprise had repeatedly rented the Chrysler PT Cruiser despite receiving a recall notice.

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“We will not rest until Congress has passed legislation that protects American consumers from these unsafe vehicles, and we urge all the rental car companies to join Hertz in committing to the safety of their customers,” said Sen. Barbara Boxer, a California Democrat.

The new Senate legislation – which mirrors a House bill introduced last month – comes as three of the four major rental firm, including Enterprise, Dollar Thrifty and Avis, have dug in their heels and rejected a voluntary repair plan.  Only Hertz has so far agreed to take recalled vehicles out of its fleets until they are repaired.

In May, Enterprise management had indicated it would also stop renting recalled vehicles but has since said the company wants an exemption allowing it to continue to use those vehicles in its fleet if the recall involves minor problems. The firm would prefer to be able to continue rentals while advising customers the vehicles are subject to recall.

There are a wide range of recalls.  Several manufacturers have this year staged callbacks because the wrong tire inflation information was posted on the placards found in the driver’s door jamb. At the other extreme, Ford recently announced a series of recalls for the new 2013 Escape including one advising owners of certain models to park the vehicle until a leaky fuel line can be fixed.

Together, the four firms control about 92% of U.S. rentals.  Enterprise alone, through the Enterprise, National and Alamo brands, accounts for about a third of all airport business in the U.S.

The proposed legislation has won widespread support from both consumer groups and from the National Highway Traffic Safety Administration.

The measure does not cover limousines, car services or taxis, but Boxer says that gap can be addressed later.

While the rental companies say the proposed legislation would create problems by forcing them to take cars out of service at times when business might be heavy they also insist they are normally quick to respond to recalls.  Enterprise contends 90% of the affected models in its fleet undergo necessary repairs or inspections within 90 days.

General Motors and Chrysler have advised NHTSA that, on the whole, about 50% of vehicles used by rental companies are in compliance with a recall within one year.

The legislation first introduced into the House last month is called the Raechel and Jacqueline Houck Safe Rental Car Act of 2012.  The bill is named after the sisters whose vehicle went out of control, crossed a highway median and struck a tractor trailer in 2004.

“When demand called, we rented out recalled vehicles, it happened, I won’t lie,” the California jury hearing the case was told by Mark Matias, who had served as an Enterprise area manager in San Francisco, near where the accident occurred.

Enterprise initially tried to blame the sisters, arguing 24-year-old Raechel, who was behind the wheel, might have been “suicidal or on drugs.”  The company rejected a $3 million settlement offer that, ironically, would have allowed it to keep the case out of the public eye by sealing all court documents.

Hertz Asks for Federal Oversight of Recalled Cars

Rental industry under fire for potential safety lapses.

by on Feb.21, 2012

Hertz has agreed to support legislation that would require rental vehicles to be repaired before being returned to rent-a-car lots.

With the industry facing criticism for ongoing safety lapses, rent-a-car company Hertz is calling for government oversight to ensure that recalled cars are fixed before being rented to consumers.

Two senior lawmakers say they will introduce legislation to do just that in the coming weeks.

Though rental firms like Hertz and Enterprise, the largest in the field, are the single biggest purchasers of new cars in the U.S. they are not subject to regulation by the National Highway Traffic Safety Administration, which oversees automotive manufacturers.  NHTSA can block the manufacture and sale of vehicles experiencing safety defects but it is currently powerless to prevent them from being rented out.

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Nonetheless, NHTSA has been investigating the rental industry for more than a year following revelation that rental companies have frequently allowed vehicles subject to safety recalls to remain on rental lots.  As first reported in July 2010, officials with Enterprise, Alamo and National acknowledged in court they would delay making safety-related repairs, in one manager’s words, “when demand called.”


Feds Launch Probe Into Rental Car Recall Delays

Investigation triggered by evidence some firms regularly delay repairs on defective vehicles.

by on Nov.22, 2010

Rental firm accused of delaying repairs on recalled vehicles if they're in demand.

Federal regulators want to know whether daily rent-a-car companies may be risking the lives of their customers by delaying repairs for known safety problems in order to keep potentially defective vehicles in circulation.

The investigation comes as several rental car firms defend their actions in court.  As first reported, last July, officials with Enterprise, Alamo and National have acknowledged in court delaying safety-related repairs, in one manager’s words, “when demand called.”

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But industry officials are denying such allegations and, if anything, are blaming automakers for failing to properly notify fleet managers of pending recalls.

The National Highway Traffic Safety Administration’s new investigation is specifically examining how major rental car companies have handled 29 individual recalls ordered by Detroit’s Big Three automakers.  In all, those recalls involved 3 million vehicles sold to rental companies.