---

Published: December 2011

Congress should close the unsafe rental car loophole

Advocates for consumer safety, including Consumer Action, ask Congress to enact a law that forbids rental car companies from renting or selling cards that have been recalled. The letter was prompted in part by the tragic death of two sisters who were driving a recalled Chrysler PT Cruiser.

Below is the full text of the letter:

Sisters Raechel and Jacqueline Houck, ages 24 and 20, were tragically killed while driving a recalled Chrysler PT Cruiser rented from Enterprise. About one month before the Houck sisters were killed, Enterprise received a recall notice that the PT Cruiser had a defective steering component that was prone to catching fire and that it would be repaired by Chrysler free-of-charge. Despite the warning, Enterprise did not get the vehicle repaired, and rented it out to three other customers before renting it to the Houck sisters. The defect caused the car to catch fire and crash head-on into a tractor-trailer, killing both sisters.

• Rental car companies should be prohibited from renting or selling a vehicle that is subject to a federal safety recall until the vehicle has been fixed.

• Manufacturers and auto dealers are already prohibited from selling or leasing new vehicles under recall until they have been fixed. Rental car companies should be subject to the same obligation.

• Rental car companies are the largest purchasers of new vehicles in the U.S. According to data provided by the rental car industry, in 2009, rental car companies purchased over 1,637,000 vehicles. As the first purchaser – and the owner -- of the vehicles, the rental car companies receive safety recall notices from the manufacturers. They should be required to make the necessary repairs, rather than endangering their customers and the rest of the motoring public.

• According to a recent GAO report, unrepaired recalled vehicles pose a serious risk to the public that should be addressed.

• Rental car companies claim that legislation is unnecessary because what happened to the Houck sisters, while tragic, was a one-of-a-kind occurrence. There is no way to verify this statement, however. Most product injury lawsuits are settled with confidentiality agreements, which keep the facts from becoming public. Enterprise offered the Houck family a settlement in exchange for such a confidentiality agreement, but the family rejected the offer. In any case, how many such tragedies should it take to make sure it never happens again?

• According to the National Highway Traffic Safety Administration (NHTSA), every safety defect resulting in a recall notification to car owners presents “an unreasonable risk to safety.” When non-safety defects are involved, auto manufacturers use other types of remedies, such as “consumer satisfaction campaigns” and “inconsequential defect” classifications that do not result in safety defect recall notifications to owners. Therefore, every time a rental car company receives a safety recall notice, the vehicles should be grounded until they are repaired to conform to the federal auto safety act, with no exceptions.

• In response to formal inquiries by NHTSA, the major rental car companies have stated that they “usually” repair vehicles before renting them, but they also have admitted that they sometimes continue to rent and sell vehicles that are under a safety recall, without bothering to get them fixed first.

• Requiring timely repairs of unsafe cars will create jobs for people who perform the repairs. For example, in the wake of the Toyota recall, Enterprise stated that it opened 100 new service facilities.

• NHTSA should investigate and report to Congress about two other rental car industry practices:
  • Ordering vehicles from the manufacturer that are missing standard safety equipment, such as side air bags, putting their customers at increased risk of serious or fatal injuries; and 
  • Dumping recalled vehicles into the used car market after receiving advance notice of pending safety recalls.

Other Organizations

Carol S. “Cally” Houck, Mother of Raechel and Jacqueline Houck | Advocates for Highway and Auto Safety | Center for Auto Safety | Consumer Federation of America | Consumers for Auto Reliability and Safety | Consumers Union | National Association of Consumer Advocates | Trauma Foundation

Download PDF

No Download Available