Senators File Bill Banning Rental of Recalled Cars

McCaskill Will Hold Hearing

Washington, D.C., May 9, 2013

A bipartisan group of U.S. senators, including Claire McCaskill (D-MO), has introduced a bill banning rental car companies from renting recalled vehicles that have not been repaired to consumers.

The bill, the Raechel and Jacqueline Houck Safe Rental Car Act of 2013, would close a dangerous loophole that allows rental car companies to rent or sell unrepaired recalled vehicles that are unlawful for car dealers to sell.  The legislation is named for two young women in California who were killed when their rental car caught fire.  The bill has the support of the rental car industry and will receive a hearing by a subcommittee of the Commerce Committee.

In addition to McCaskill, the sponsors of the bill are Senators Charles E.  Schumer (D-NY), Lisa Murkowski (R-AK) and Barbara Boxer (D-CA).  Supporting the bill are all the major car rental companies – Hertz, Enterprise, Avis Budget, Dollar Thrifty and National – as well as the American Car Rental Association, which together represent virtually 100 percent of the rental car market.

While current law prohibits car dealerships from selling recalled vehicles to consumers, no law bans rental car companies from doing the same or renting them to unsuspecting consumers.  The Raechel and Jacqueline Houck Safe Rental Car Act of 2013 would keep unsafe rental cars that have been recalled off the road.

Later this month, Senator Claire McCaskill, chair of the Senate Commerce Committee’s Consumer Protection Subcommittee, intends to hold a hearing on the bill.  She said, “Our goals for this legislation are twofold — to protect families, and to prevent undue burdens for employers — and this agreement succeeds on both fronts.  Neither side got everything they wanted, but by everybody giving a little, we’re getting a lot — and that’s what compromise is all about.”

Schumer noted, “Rental car companies are rolling the dice with passengers’ lives each and every time they rent a car that’s under a recall.  This practice has already proved tragic.  Most rental companies have now changed their policies, but we need a law to ensure that recalled cars are never again driven off of rental lots.  This bipartisan bill is a common sense safety measure, and I’m very grateful that Senator McCaskill has agreed to hold a hearing on it.”

Boxer said, “This legislation honors the memory of Raechel and Jacqueline Houck – two beautiful girls who lost their lives in a senseless tragedy – by ensuring that no other family will have to fear that the rental car they are driving is unsafe.  Because of the tireless work of their mother, Cally [Houck], we are able to introduce this bipartisan bill today that will make sure that vehicles rented or sold by rental car companies are safe and sound.”

“No other family should have to endure such horrific losses just because a rental car company didn’t bother to ensure that their cars are not being recalled due to safety defects,” said Houck.
Rosemary Shahan, president of Consumers for Auto Reliability and Safety added, “We’re optimistic that Congress will act to stop all rental car companies from playing ‘rental car roulette’ with their customers’ lives.”

In 2004, sisters Raechel and Jacqueline Houck were killed driving a rental car that had been recalled for a power steering hose defect but had not been repaired.  The car caught fire because of the defect while traveling on the highway, causing a loss of steering and a head-on collision with a semi-trailer truck.  The young women died in the crash.

The Raechel and Jacqueline Houck Safe Rental Car Act of 2013 is needed to ensure this tragedy is not repeated.  Getting unsafe vehicles off the road is integral to improving safety and saving lives.  This is why current law requires manufacturers to recall vehicles that have safety-related defects or do not meet federal safety standards.  Current law also prohibits auto dealers from selling a new car under recall unless the defect has been remedied.  The legislation would, for the first time, hold rental companies to the same standard as auto dealers.

Specifically, the bill:

• Prohibits Rental or Sale of Vehicles Subject to a Safety Recall  Under the senators’ plan, vehicles may not be rented or sold until the vehicles are fixed, consistent with existing law for new car dealers, who have been prohibited from selling or leasing recalled vehicles for decades.  Rental companies would be permitted to sell a damaged vehicle subject to recall for parts or scrap with a junk title.
• Requires Rental Companies to Ground Vehicles Under a Safety Recall The bill would ensure 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.
• Permits Rental Companies to Rely on Temporary Measures Identified by Manufacturers  If a manufacturer’s recall notice specifies steps that can be taken to eliminate the safety risk until 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 parts become available.
• Ensures NHTSA Has Tools Necessary to Protect Consumers  The National Highway Traffic Safety Administration will have authority to investigate and police rental companies’ recall safety practices.

The Raechel and Jacqueline Houck Safe Rental Car Act of 2013 is supported by Carol (Cally) Houck – mother of Raechel and Jacqueline Houck, Consumers for Auto Reliability and Safety, Advocates for Highway and Auto Safety, Center for Auto Safety, Consumers Union, Consumer Federation of America, Consumer Action, National Association of Consumer Advocates, and Trauma Foundation.  The bill has been endorsed by all the major car rental companies – Hertz, Enterprise, Avis Budget, Dollar Thrifty and National – as well as the American Car Rental Association. The bill also is supported by the Truck Renting and Leasing Association, representing the vast majority of truck renting and leasing operations in the United States, as well as AAA and State Farm.

Enterprise:
 “Although most of the car rental industry already prohibits renting or selling recalled cars if they haven’t been repaired, lawmakers can further reassure car rental customers across the board by supporting and voting in favor of this important federal legislation.  As a result, we will continue advocating on behalf of this bill and working diligently with consumer advocates, the American Car Rental Association and other key stakeholders to help get it passed.”

The American Car Rental Association: 
“The American Car Rental Association (ACRA) is pleased to join with consumer advocates in support of this legislation, which prohibits the rental of any vehicle that has an unrepaired safety recall and addresses certain practical implementation issues of our industry.  It is critically important that Congress codify what most of the car rental industry voluntarily enacted last year.  By formally creating a uniform standard, both car-rental and car-sharing customers will have even greater confidence going forward no matter where they rent their vehicles.”

Hertz:
 “Hertz supports efforts to prohibit car rental companies from renting or selling recalled cars if they haven’t been repaired.  The major companies do an excellent job handling recalls, and consumers should have confidence that the cars they drive are safe; this legislation will help improve the public’s perception of our industry’s commitment to safety.”