Enterprise joins Hertz to support tougher laws covering recalled rental vehicles
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Enterprise is joining Hertz to team up with safety advocates and prod Congress to prohibit rental companies from renting, leasing or selling recalled vehicles until they are fixed.
But Richard Broome, Hertz' vice president of corporate affairs, says Hertz and several other major rental companies already have a policy of pulling recalled vehicles from fleets until they are repaired.
"Rental car companies have already been handling these things," Broome said. "Government oversight is just really going to solidify that what we do today is the law. It's not intruding on how we mange recalls. It will just reassure consumers that their rental car is safe to drive."
Enterprise today became the second rental company to throw its support behind federal legislation to oversee the way car rental companies manage the safety recall process for vehicles in their fleets.
"A number of individuals and organizations have asked for additional oversight in the form of federal legislation," Enterprise said in a statement. "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."
Hertz and Consumers for Auto Reliability and Safety hope Congress will give the National Highway Traffic Safety Administration authority over rental companies' recall-related practices.
The agreement could help advance an amendment with similar requests, backed by Sen. Charles Schumer, D-N.Y., and Sen. Barbara Boxer, D-Calif. They hope to include the amendment in a transportation bill that the Senate expects to address after it reconvenes Feb. 27, USA Today reported.
Although federal law prohibits manufacturers and new car dealers from selling recalled vehicles before they are fixed, the rules don't apply to rental car companies. The auto-rental industry has been accused in the past of renting cars that were recalled by automakers but not repaired.
NHTSA has opened an audit query on the nation's four largest rental companies, Enterprise, Hertz, Avis-Budget and Dollar, and have been investigating them for more than a year based on these allegations. NHTSA is still evaluating information, the agency said. NHTSA currently cannot prohibit auto-rental companies from renting, leasing or selling vehicles under recall.
"NHTSA believes rental car companies have a responsibility to provide safe vehicles to their customers and should promptly fix all recalled vehicles," NHTSA spokeswoman Lynda Tran said in a statement.
Avis Budget hasn't joined Hertz in its agreement with Consumers for Auto Reliability and Safety, but has been reviewing the agreement between Hertz and consumer advocates, USA Today reported this week.
Rosemary Shahan, president and founder of Consumers for Auto Reliability and Safety, says she doesn't think there will be a huge change for rental companies should a federal law pass, only a small shift for companies that continue to rent out vehicles with smaller recall problems.
"The majority of recalled vehicles are taken off the road when companies get the recall notice," she said. "Where there's a problem is if there's a major recall during a big holiday weekend and a lot of people have reserved cars. When the company runs out of safe cars, they want to use the unsafe ones."
Shahan says that if a car couldn't be sold at a car dealership, it shouldn't be rented at a rental agency.
Broome said when Hertz receives notification of a recall, the company promptly identifies all affected vehicles and removes them from service. He said Hertz has the recalled vehicles fixed within a few days once it receives the parts. The company has recalled about 133,000 vehicles in the past two years.
Broome says the agreement came after opposing a state-by-state approach to regulation.
"As a national car-rental company with cars constantly crossing state lines, a state-approach is absolutely unworkable," he said. "A single national solution is simple and effective and allows us to manage the recall process."
In its audit, NHTSA said documents submitted by Chrysler and General Motors show that it can take more than a year before rental companies repair a recalled vehicle. The documents do not reveal how many recalled vehicles were rented out before they were fixed.
Broome says some auto manufacturers that submitted data to NHTSA told the agency that their data were not accurate and didn't reflect whether rental companies owned the cars at the time of the recall.
"A couple of the manufacturers admitted that, in many instance, the cars had been sold prior to the recall," he said. "Also, a lot of time when the cars hadn't been repaired, it was only because we hadn't received the parts yet. To the best of our knowledge, there's no evidence that rental companies are renting out unsafe cars."
You can reach Ellen Mitchell at emitchell@crain.com.
