Rent-a-Car Companies Putting Recalled Autos on the Road

July 7, 2010— -- The country's biggest rent-a-car companies routinely rent out vehicles under safety recall before they have been fixed, an ABC News investigation has found.

Executives of the country's largest car rental company, Enterprise - the parent of National and Alamo - made the surprising admission in a California court case involving the deaths of two California women.

"When demand called, we rented out recalled vehicles, it happened, I won't lie," said Mark Matias, a former Enterprise area manager in San Francisco.

"If all you have are recalled vehicles on the lot, you rent them out. It was a given. The whole company did it. Enterprise's corporate offices look the other way regarding this fact," Matias said in an affidavit filed for the case in August 2008.

Other Enterprise executives testified that there was no companywide policy requiring cars under recall to be held back from rental.

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Neither Avis nor Hertz have such companywide policies either, according to their spokespeople. Both companies say they assess safety recalls on a case by case basis, and work closely with the car manufacturers to make sure repairs are done in a timely manner.

"Their policy is to gamble with the lives of their customers," said Clarence Ditlow, executive director of the Center for Auto Safety. "They want to keep the cars on the road making money, even though there are outstanding recalls on them."

The court case with Enterprise involved the deaths of two young California women who rented a Chrysler PT Cruiser in October 2004, one month after Enterprise received a recall notice that an underhood engine fire could result from a possible leak in the vehicle's power steering flue.

Raechel Houck, 24, and her sister Jacquie, 20, died instantly after their car caught fire and hit an oncoming semi-tractor trailer on Highway 101 in northern California.

The sisters had rented the car to visit their parents in Ventura County, CA.

"You want them to drive something safe, so I sent them the money to go to Enterprise and get a rental car," recalled their father Chuck Houck.

During the court case, the Houck's lawyers discovered that the Enterprise Santa Cruz branch had rented the PT Cruiser three other times since the recall notice.

"I had never imagined in a million years that a company could rent a car they knew was recalled," said the girls' mother, Cally Houck.