According to the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA), there were over 9 million recalls for vehicles in 2012. Since the agency was formed in 1966, it has issued 17,000 recalls involving over 500 million vehicles. Already in 2013, there have been several recalls issued, affecting millions of vehicles, particularly for airbag issues.
Existing law prohibits car dealerships from selling recalled vehicles to consumers until they the defect is repaired. However, there is a loophole in the law that allows rental-car companies to rent and sell vehicles with an open manufacturer's recall. Recently, a bi-partisan group of Senators introduced the Raechel and Jacqueline Houck Safe Rental Car Act of 2013, which would close that loophole.
The bill is named after two sister, Raechel, 24, and Jacqueline, 20, who both died in a fiery crash in 2004 while driving a rental vehicle. The sisters had rented a 2004 Chrysler PT Cruiser from Enterprise Rent-a-Car. A month before, Daimler Chrysler sent out safety recall notices for 435,000 PT Cruisers from 2002 through 2005. The notice said the power steering hose could leak, resulting in a fire. Enterprise records showed the PT Cruiser the victims rented had not been repaired. Records also showed that this was the fourth time this particular vehicle had been rented out since the recall. A jury awarded the parents of the victims $15 million in a wrongful death suit.
The new law would prohibit rental or sale of vehicles subject to a safety recall until the vehicle is repaired, consistent with existing law for new-car dealers. It would require to the company to ground all activity with a recalled vehicle within 24 hours of receiving the recall notice form the NHTSA, or 48 hours if the rental company has more than 5,000 of the affected vehicles in its fleet.
If temporary safety measures are identified by manufacturers in the recall, the new law will allow a rental company to continue to rent the vehicle after taking those measures, but must ground the vehicle once replacement parts are available. The law would also give the NHTSA the right to investigate rental car companies' compliance with the law.
Sen. Charles Schumer (D-New York), one of the sponsors of the bill, told Associated Press (AP), “Rental car companies are rolling the dice with passengers’ lives each and every time they rent a car that’s under recall. The practice has already proved tragic.”