Safety advocates: Rental car recalls should be regulated

— -- Raechel and Jacqueline Houck died in a fiery 2004 crash in a rental car that "was essentially a ticking time bomb," their mother, Cally Houck, says.

The vehicle — a PT Cruiser under a safety recall for a power-steering fluid problem — was not repaired and had been rented to three other renters and then the Houck sisters at an Enterprise Rent-A-Car facility in Capitola, Calif.

The power-steering fluid leaked and caught fire, Cally Houck says, causing Raechel, 24, and Jacqueline, 20, to lose control of the car, which slammed into a semi tractor-trailer.

Enterprise admitted liability, and Houck was awarded $15 million in damages by a jury two years ago. She says she will keep fighting to improve auto-rental safety until Congress makes the industry adhere to federal safety regulations.

"The rental car industry is the single largest purchaser of new cars, and the single largest source of used cars in North America, yet they have escaped all regulation and oversight from the National Highway Traffic Safety Administration (NHTSA)," Houck says.

That may be changing. Hertz and safety-advocacy group Consumers for Auto Reliability and Safety have reached a historic agreement that calls for Congress to give NHTSA authority over the companies' recall-related practices and prohibit rental companies from renting, leasing or selling recalled vehicles until they are fixed.

The agreement adds momentum to an amendment with the same provisions backed by Sen. Charles Schumer, D-N.Y., and Sen. Barbara Boxer, D-Calif. The senators hope to include the amendment in a massive surface transportation bill that the Senate expects to address after it reconvenes Feb. 27.

According to data provided by rental companies to USA TODAY, hundreds of thousands of the 1.6 million vehicles in their U.S. fleets are recalled annually for safety problems. Hertz and Enterprise had nearly 184,000 vehicles under recall last year. In 2010, when Toyota announced a massive recall of vehicles with accelerators that could stick, Hertz and Enterprise had 350,000 vehicles — about 22% of the industry's entire fleet — under recall.

Toyota's recall prompted auto-rental companies to develop strict practices to address recalls, says the American Car Rental Association trade group, which represents 105 rental companies.

Though Hertz is one of its members, the American Car Rental Association trade group says there is no need for federal regulation.

"When we receive a recall notice from a manufacturer, we will not re-rent that vehicle until all repairs are completed," the group says. "If a member makes an exception, it would only be when they are satisfied that the vehicle is safe to operate under the circumstances presented by the particular recall and based on information and direction provided by the manufacturer."

The trade group says rental companies complete recall work quicker than other vehicle owners, and no laws prohibit owners, taxi and limousine companies, and others who operate or lease vehicles from using them before they are repaired.

Millions of vehicles recalled

NHTSA, the federal agency that sets and enforces motor-vehicle safety standards, says 15.5 million vehicles of various model years were recalled in 2011, and 20 million were recalled in 2010.

NHTSA has jurisdiction over auto manufacturers and safety recalls, but no oversight authority over rental car companies.

Though it cannot order auto-rental companies to ground vehicles under recall, NHTSA in November 2010 launched an ongoing investigation of the rental industry after consumer safety advocates requested the Federal Trade Commission to order Enterprise to repair recalled vehicles before renting them.

NHTSA asked auto manufacturers — who send defect notification letters to owners of recalled vehicles — how quickly auto-rental companies fixed vehicles in 15 past recalls.

One of the recalls — involving about 102,000 Chrysler Sebrings and Dodge Avengers from the 2007 and 2008 model years — came after Chrysler determined that a rental car fire in Florida was caused by an electrical short circuit after engine coolant was drawn into a radiator cooling fan motor connector, according to documents USA TODAY found on NHTSA's website.

NHTSA says all vehicles involved in any safety recall should be fixed immediately.

Documents submitted to NHTSA by Chrysler and General Motors do not reveal how many recalled vehicles were rented out before they were fixed, but they show that it can take months, a year or more before rental companies repair a recalled vehicle.

The documents show that no major auto-rental company fixed all its recalled vehicles within a year. GM documents, for example, show that a year after getting a recall notice about a shift lever indicator problem in 2009 Buick Enclaves, Chevrolet Cobalts and seven other types of vehicles in their fleets, Avis Budget had fixed 35% of them. The documents show that Enterprise fixed 34% of these types of vehicles in their fleets within 30 days after the recall, 52% within 60 days, 62% within 120 days and 74% within a year.

Hertz, according to the documents, fixed 18% within 30 days after the recall, 36% within 120 days and 52% within a year.

Hertz Senior Vice President Richard Broome says data submitted to NHTSA by auto manufacturers are inaccurate. The data include "countless instances" of vehicles that rental companies had sold before recall notices were issued, he says.

Avis Budget, Enterprise and Hertz say they ground — and don't rent until fixed — all vehicles specified in manufacturers' defect notification letters. Enterprise spokeswoman Laura Bryant says, however, that the company maintains "a team of senior executives to review recalls when there is an interim measure, and from time to time, we may elect to use that interim solution to avoid stranding many travelers for no reason."

The "most significant example of this common-sense approach," she says, was a recall of numerous 2003-2010 Toyota vehicles for concerns about floor mats interfering with accelerator pedals. "Simply removing the mats promptly and completely addressed the problem," Bryant says.

The Government Accountability Office interviewed Hertz, Avis Budget and Enterprise officials for its June 2011 report on vehicle recalls. All companies, the GAO says, decide whether a vehicle involved in a safety recall should be put in a "hard hold" — grounding the vehicle until it is fixed — or a "soft hold" — continuing to rent it until it can be fixed.

Hertz's Broome says the GAO report is inaccurate, and none of its vehicles under a NHTSA safety recall are put on soft hold and rented out. Of 133,200 Hertz vehicles recalled during the past two years, all were "pulled out of the fleet when we received notification and, to the best of our knowledge, they were not rented until repaired," Broome says.

Skeptical about prompt fixes

Consumer-safety advocates aren't convinced that rental companies are so conscientious about fixing their vehicles. Rosemary Shahan, president of Consumers for Auto Reliability and Safety (carconsumers.org), says lobbyists for rental car companies told her last year at a meeting in the State Capitol Building in Sacramento that their companies sometimes needed to rent cars under recall, particularly during busy holiday weekends.

Shahan says she met with the lobbyists a few times last year to discuss proposed California legislation that would prohibit rental vehicles from being rented or sold until they are fixed. The proposed California bill, introduced last March by Assemblyman William Monning, D-Carmel, was passed by the Assembly but stalled in the Senate.

Two other state bills concerning recalled rental vehicles were introduced last year in New York. Neither has become law.

"The rental car companies have been playing rental car roulette with their customers' lives," Shahan says. "When they run out of safe vehicles, they want to be able to rent ones that are unsafe." Shahan's consumer safety group also wants auto-rental companies to ensure that their vehicles include standard safety equipment.

Many renters assume that the vehicle they rent is equipped with the same safety features included when the same type of vehicle is bought by consumers, but that is not always true, Shahan says.

"If rental car companies cared about the safety of their customers, they would make sure their vehicles are at least as safe as what their customers are already driving," Shahan says. "Instead, they are defending their right to cut corners and order vehicles that are missing basic, common safety equipment that has been proven to greatly reduce the risk of death or injury in a crash."

Missing safety features

Auto-rental companies say that they, like all auto buyers, have the right to purchase vehicles equipped with whatever safety equipment they desire, as long as the vehicle meets federal safety regulations.

A 2009 Kansas City Star investigation found that Enterprise Rent-A-Car saved millions of dollars by deleting a standard safety feature — side-curtain air bags — from 2006-2008 Chevrolet Impalas bought from GM. Though standard on the Impala, the air bags were optional on many other types of vehicles.

Enterprise said the side-curtain air bags were an option not required by law, and, when it later offered the cars for sale, it incorrectly stated that some were equipped with the bags.

Enterprise and Ford Motor several years ago settled a lawsuit involving a July 2003 accident of a rented SUV without optional safety equipment. A California woman, Gloria Levesque, suffered "severe and permanent" head and spinal injuries when the rented Ford Expedition she was in rolled over, crushing the roof, says the complaint filed in California Superior Court in Los Angeles.

The lawsuit charged that the vehicle lacked an optional electronic stability-control system that could have been purchased for $100 to $400.

"The vehicle not having traction control caused us to roll four times and left me partially paralyzed with a spinal-cord injury and disabled for life," Levesque said in an interview with USA TODAY. "Enterprise could have gotten traction control on the Ford Expedition, but they chose to save money instead."

Enterprise spokeswoman Bryant says the case was settled "with a confidentiality agreement in place" and didn't comment further.

Ford Motor spokeswoman Marcey Evans says settlement terms are confidential, and it "would be inappropriate to comment today on a case that's so old" and settled.