Did You Drive a Recalled Rental Car?

Despite the thousands of car recalls that have come out in the past few years, rental car companies are still offering these vehicles to consumers, even though they have not been repaired.  Rather than ground these vehicles to fix the defects, rental car companies have continued to rent out recalled cars, generating more than $20 billion in profits last year and putting consumers at risk for being in a motor vehicle accident.

According to a study conducted by the National Highway Traffic Safety Administration (NHTSA), the biggest culprits are the top three rental car companies, including Hertz, Avis/Budget, and Enterprise, which owns both National and Alamo.  Researchers for NHTSA studied 10 recalls by GM and Chrysler between 2006 and 2010.  They found that after 90 days, Enterprise had fixed only 65 percent of the cars under the recall, while Avis/Budget had fixed 53 percent, and Hertz a mere 34 percent.

Death and serious personal injury can occur when driving these recalled vehicles.  The Houck sisters were killed in an accident in October 2004 when the PT Cruiser they had rented from Enterprise caught fire and hit an oncoming semi truck.  Just one month earlier, that same PT Cruiser had been recalled because of a potential leak in the power steering fluid that could cause a fire under the hood.  The girls' parents sued Enterprise for negligence.

Before the trial, Enterprise had offered the Houcks a settlement of $3 million and asked in return that the family not tell the public about what happened to their daughters.  The Houcks turned down the settlement offer and took their case to trial, where a jury found in their favor, awarding them $15 million in damages.  The family is now lobbying local and national politicians to change the law on rental cars.

The Houcks' wrongful death trial against Enterprise shed light on the rental car industry's practices of renting out recalled cars.  Enterprise employees admitted that the company had no policy for renting out recalled cars and that if the demand was high, recalled rental cars would be given to consumers even if they had not been repaired.  Other rental car companies have admitted they also do not have policies regarding renting recalled vehicles.

Realizing the danger these cars pose to consumers, U.S. Senator Charles Schumer (NY) recently announced that he will introduce a bill to stop rental car agencies from renting recalled cars that have not been fixed.  He argues that the rental car companies should be held to the same standard of care as car dealerships, which cannot lease cars that are under recall and have not been fixed.

The American Rental Car Association (ARCA) is arguing for a two-tier approach to the problem in which cars with serious safety issues would be kept off the road until they have been fixed, while cars with less serious issues would be kept on the road even if they have not been fixed.  Citing the lack of guidance by the NHTSA, ARCA has insisted that its proposed two-tier approach will be best for both the industry and consumers.  But Senator Schumer argues that this standard allows the rental car companies to avoid fulfilling their duties to consumers.

If you recently rented a recalled vehicle and were involved in an accident, contact Van Wey Law today.