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Senators Announce Breakthrough Deal with Rental Car Companies to Keep Recalled Vehicles Off the Road

Press Release

Location: Washington, DC

U.S. Senators Charles E. Schumer (D-NY), Barbara Boxer (D-CA) and Claire McCaskill (D-MO) announced Thursday that they have reached an agreement with the top four rental car companies in the U.S. to stop the renting or selling of vehicles that have been recalled by their manufacturer.

Under the agreement, rental car companies Enterprise/National/Alamo, Hertz/Advantage, Avis/Budget, and Dollar/Thrifty, as well as the American Car Rental Association, have all endorsed new legislation authored by the senators to ensure recalled vehicles stay off the road. Together, the four companies represent 93 percent of the rental car market.

The deal caps a years-long push by the senators and consumer safety advocates to fix a loophole in current law. While car dealers are prohibited from selling a recalled automobile, rental car companies are not barred from renting or selling one. The new Senate bill would change this, requiring that vehicles under a safety recall will be grounded as soon as possible, but no later than 24 hours after the rental company gets the safety recall notice. Rental companies will have up to 48 hours for recalls that include more than 5,000 vehicles in their fleet.

Also under the senators' legislation, the National Highway Traffic Safety Administration will, for the first time, have authority to investigate and police rental car companies' recall safety practices.

Senator Schumer said: "This breakthrough was years in the making. It will help take recalled rental cars off the road for good. Consumers will no longer have to worry about what they're getting when they go to the rental car counter. With the industry's full backing, we think we have a great shot to get this legislation passed before the end of the year."

Senator Boxer said: "No one obtaining a car from a rental car company should ever have to worry that it's been recalled. This compromise makes clear that vehicles rented or sold by rental car companies must be safe and sound."

Senator McCaskill said: "This agreement has required compromise from stakeholders on all sides, but it's resulted in a solution that boosts safety for Missouri families without undue burdens for employers in our state," McCaskill said. "Consumer advocates and industry representatives were able bridge their differences and find common ground here, and that's what we need more of in politics. I plan to work as hard as I know how to get this agreement enacted into law as soon as possible, because it is the right thing to do for consumer safety, for providing certainty for our employers and for the legacy of two daughters lost in a tragic accident."

The senators were joined for the announcement Thursday by longtime safety advocate Cally Houck of California. Houck's two daughters--Raechel and Jacqueline Houck--were killed in a 2004 crash due to a safety issue with their rental car that went unfixed despite a recall by the manufacturer.

In memory of the Houck daughters, the Senate bill is named the "Raechel and Jacqueline Houck Safe Rental Car Act of 2012."

Houck said: "If this bill had been the law, and the rental companies complied, my beautiful, precious daughters would still be alive. My abiding hope is that it will be enacted, and other families will be spared our devastating loss."

The senators' agreement with the rental car industry was also hailed by consumer safety groups.

Rosemary Shahan, President of Consumers for Auto Reliability and Safety (CARS), said: "Consumers should not have to worry about rental car companies playing "rental car roulette' with their safety. This bill will make both car renters and used car buyers safer."

The legislation is also endorsed by AAA, Advocates for Highway and Auto Safety, Consumers Union, and State Farm Insurance.

The Senate legislation endorsed Thursday by the four major rental car companies includes revisions from earlier bills introduced by Schumer and Boxer. For instance, though the bill stipulates that vehicles may not be rented or sold until the vehicles are fixed, one exception is allowed for rental companies to sell a recalled vehicle with a junk title for parts or scrap.

Another revision notes that if a manufacturer's recall notice specifies temporary steps that can be taken to eliminate the safety risk until new parts are available, a rental company may continue to rent the vehicle if those measures are put in place but must ground and repair the vehicle once the new parts become available.

The rental car companies released public letters of support for the new Senate legislation.

In its letter, Hertz--which worked with CARS to become the first company to support federal legislation barring the rental of recalled vehicles--hailed the new version of the bill as "consensus legislation." The company said "the current draft makes only minor changes to the original CARS/Hertz agreement, while completely fulfilling the original intent to keep unsafe cars off the road. Accordingly, we are pleased to express our strong support for this proposal and commit to help secure its passage as soon as possible."

In a separate letter, Enterprise, Avis and Dollar/Thrifty wrote: "For the last year we have worked closely with all stakeholders to develop legislation that would carry wide support. We firmly believe that this consensus legislation accomplishes this objective. We applaud the work of Sens. Schumer, Boxer, McCaskill and Blunt to facilitate and support a process through which this legislation could be developed. Our industry will work for its successful passage."

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