Safe Rental Car Act: Closing a Dangerous Loophole

If under federal law, auto dealers must comply with all vehicle recalls. Surprisingly, there are no law that requires rental companies to have fleet vehicles fixed when an automaker issues a recall. Shouldn’t this logic apply to them as well?

Most consumers will rent a vehicle at some point, even if only for a day. That one day could change your life if the rental car company knows the vehicle you rent has a safety defect and there is a recall, but they fail to take the car out of its fleet until the repair is fixed. Ask a California mother who lost her two daughters when Enterprise Rent-A-Car failed to carry out a recall on the Chrysler PT Cruiser. A fire broke out under the hood and they collided with an 18-wheeler. A recall had been issued four months prior because power steering fluid could leak and cause a fire in the engine compartment.

The National Highway Traffic Safety Administration (NHTSA) does not have the authority to force rental-car companies to carry out recalls, although they expect them to provide safe vehicles to their customers and fixing any recalls. Enterprise said that their policy is not to rent vehicles without carrying out recalls if they involve “the risk of sudden loss of control, safety-restraint failures or fire hazards.” By definition, a recall involves a safety problem that is considered a threat to consumers. Why does the decision to comply or not comply with a recall lie with the rental car company? Wasn’t the risk of fire in the PT Cruiser a threat? Enterprise, or any other rental car company, should not have the right to pick and choose which recalls they will act upon. Rental car companies do not have to pay for the recall repairs; all they lose is the use of the vehicles while the repair is being performed. That means loss of short-term profits. That means they are putting greed over safety.

After five years of fighting the suit, Enterprise admitted liability in the death of the two young women and awarded the parents a damages-only verdict of $15 million. Now, U.S. Senator, Charles Schumer is introducing the Safe Rental Car Act to keep unsafe rental cars that are subject to recall notices, off the road. He says that in order to protect consumers, all recalled vehicles should be parked until they are fixed.

“Rental car companies should be immediately barred from renting cars that would be pulled from showrooms and car dealer lots because of safety recall concerns,” said Schumer. “This is a serious public safety issue and, tragically, we have already seen the grave and devastating consequences of inaction. This bill is just plain common sense – rental car companies should not be in the business of renting cars that pose serious risks to drivers and passengers. We need to keep these cars off roads until they are fixed, and the Safe Rental Car Act will make sure that’s exactly what happens.”

Under the new legislation, rental car companies would be subject to the same strict regulations that prevent auto dealers from selling automobiles under recall. When a recall notice is issued for a particular vehicle, auto dealers are forbidden from selling the vehicle until it has been serviced and the issue that sparked the recall notice has been corrected. Rental car companies fall into a dangerous loophole that allows them to continue placing the same vehicles that would be barred from show rooms and dealer lots on the streets.

According to Clarence Ditlow, executive director of the Center for Auto Safety (CAS), the Federal Trade Commission Act states that companies “shall not engage in unfair trade practices. And, not repairing a defective vehicle after it has been recalled, before renting it out, is an unfair trade practice, and is a violation of the act.”

It is time that these rental car companies stop gambling with your life. Until the Safe Rental Car Act is passed, the best recourse we as consumers have is to simply ask the rental car agent if the vehicle you are renting is subject to an outstanding safety recall. If the answer is yes, choose a different vehicle if the agency will not answer the question, choose another rental car agency.

Mark Bello has thirty-three years experience as a trial lawyer and twelve years as an underwriter and situational analyst in the lawsuit funding industry. He is the owner and founder of Lawsuit Financial Corporation which helps provide legal finance cash flow solutions and consulting when necessities of life litigation funding is needed by plaintiffs involved in pending, personal injury litigation. Bello is a Justice Pac member of the American Association for Justice, Sustaining and Justice Pac member of the Michigan Association for Justice, Business Associate of the Florida, Tennessee, and Colorado Associations for Justice, a member of the American Bar Association as well as their ABA Advisory Committee, the State Bar of Michigan and the Injury Board.