Automakers, Dealers Remain Opposed To Bill Preventing Rental Firms From Renting Recalled Vehicles

Major automakers and auto dealers told a Senate panel on May 21 that they remain opposed to legislation that would prohibit rental car companies from renting or selling vehicles that are subject to a federal safety recall.

Representatives from the National Automobile Dealers Association (NADA) and the Alliance of Automobile Manufacturers told the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance that they oppose the latest bill -- which enjoys bipartisan support in the Senate -- requiring rental car companies to restrict all recalled vehicles from being rented before they are repaired.

The legislation, the Raechel and Jacqueline Houck Safe Rental Car Act of 2013, was named after two women, ages 24 and 20, who were killed in 2004 when a recalled Chrysler PT Cruiser they had rented from Enterprise caught fire and hit a truck. The rental car company had received a safety recall notice about thirty days before the accident.

Eventually, Enterprise admitted liability, but it wasn’t until May 2012 that the rental car company said it would stop renting unrepaired recalled vehicles. Avis Budget Group, Hertz Global Holdings Inc., Dollar/Thrifty, and the American Car Rental Association later agreed to support the legislation.

Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said in written testimony that grounding defective vehicles is warranted and appropriate for recalls that direct owners to stop driving cars, "but a broad, federal mandate grounding all vehicles regardless of the nature of the recall triggers potential negative impacts that consumer notifications would not."

Bainwol said the bill would "pit" businesses against consumers when a vehicle is recalled.

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