Rental car companies agree not to rent recalled cars
Sen. Charles Schumer: "Today we are closing this loophole in the law once and for all."
Photo credit: MIKE THEILER/REUTERS
WASHINGTON (Reuters) -- Leading U.S. car rental companies have agreed to back Senate legislation to pull vehicles from the road when recalled for safety defects, lawmakers and the firms said on Thursday.
The legislation brings car rental companies in line with auto dealers, who are barred from selling a car being recalled for a defect until the fault is repaired.
"Today we are closing this loophole in the law once and for all," U.S. Sen. Charles Schumer, D-N.Y., one of the measure's sponsors, said in a conference call.
The accord was agreed by Hertz, Avis Budget Group Inc, Dollar Thrifty Automotive Group Inc. and Enterprise Holdings' National and Enterprise units.
Those companies make up more than 93 percent of the rental car market. The bill is also supported by the American Car Rental Association, the Truck Renting and Leasing Association and AAA.
The measure stems from a 2004 accident in which two California women, Raechel and Jacqueline Houck, were killed in a head-on collision with a truck.
They lost control of their Enterprise rental car when a hose rubbed against the catalytic converter and leaked steering fluid, their mother, Cally Houck, said on the call. The model, a Chrysler PT Cruiser, had been recalled for the hose defect.
Houck lobbied for the bill, which is named for the two women. Schumer said he hoped for Senate approval in the lame-duck session following the November general election.
The measure -- the Raechel and Jacqueline Houck Safe Rental Car Act of 2012 -- would bar the rental or sale of vehicles subject to a safety recall, require rental companies to ground vehicles under a recall and let rental companies rely on temporary repairs identified by manufacturers.
The National Highway Traffic Safety Administration also can investigate and police rental companies' recall safety practices.
Avis Budget Group said it has never rented vehicles under a safety recall, so the law did not change its business practice.
"We have always supported federal legislation that would apply this same standard fairly and equally to all industry participants,” an Avis spokeswoman said. “We are pleased that this compromise bill accomplishes this objective and therefore we support its passage."
In the spring of 2010, following the Toyota's highly publicized recalls for sticky accelerators, Enterprise changed its policy to not rent out any vehicles with any open recall. Prior to this, they only pulled vehicles when it was recommended by the manufacturer.
"Because the major car rental companies had revised their recall policies years ago, we initially did not believe that federal oversight of our industry was necessary. But when car rental customers let us know that they would be more comfortable with legislation in place, we quickly changed direction and began working closely with all involved stakeholders," an Enterprise spokeswoman said in an e-mail.
"We now believe federal oversight -- which will codify current practices and operational policies -- will help to strengthen our industry’s safety efforts. The bill is a tribute to the courage and determination of Ms. Houck in response to the loss of her daughters. We share her goal of preventing anything like that from happening again, and we look forward to seeing this legislation become law as soon as possible."
Theresa Clift contributed to this report.Contact Automotive News