Consumer Recalls: Car Rental Exception?

Consumer Recalls: Car Rental Exception?


The next time you rent a car you may want to make sure that it hasn’t been recalled recently. That’s because your car rental company may be dragging their feet in getting it repaired, possibly exposing you and your family to an unsafe vehicle.

Unsafe Rentals

An ABC News investigation has uncovered a startling business practice employed by several of the leading car rental companies. Specifically, cars under a safety recall, but not yet serviced by the manufacturer, are frequently loaned out to customers.  Like consumers, car rental companies must respond to recalls as soon as possible. But, unlike smart-thinking consumers, car rental companies are usually in no hurry to comply especially if that action means they’ll lose the use of a car until the problem has been fixed.

Brian Ross, reporting for ABC News on Good Morning America yesterday, said that Enterprise Car Rental, the parent of National and Alamo, has admitted negligence in a case involving two California women who were killed when their recalled Chrysler PT Cruiser got into an accident, killing them both.

Executive Testimony

Damning testimony from a former Enterprise area manager in San Francisco asserted that renting out recalled vehicles was a companywide practice, with that person alleging management routinely looked the other way. Other Enterprise executives testified, offering a similar description of Enterprise’s recall policy or lack thereof.

Ross learned that neither Hertz nor Avis have a formal companywide policy when it comes to handling recalls, though both rental companies have insisted that they work with the automakers to make sure that repairs are completed expeditiously.

Enterprise Negligence

The heart of the court case involved the death of sisters Raechel and Jacquie Houck who were killed instantly when their rented Chrysler PT Cruiser caught fire and hit an oncoming semi head-on in California. At first, Enterprise resisted admitting negligence going so far as to blame the young women for the accident.

The Houck’s lawyers eventually learned that the affected PT Cruiser had been rented out four times after the recall notice was received, with the last time leading to fatal consequences. Chrysler’s recall warned that an underhood engine fire could result from a possible leak in the vehicle’s power steering flue.

An Alameda County jury found Enterprise negligent, awarding $15 million to the parents earlier this year. Enterprise had wanted to settle for $3 million, but that would have prevented the Houcks from speaking out.

ABC News isn’t the only one following this story as the Center for Auto Safety has asked the Federal Trade Commission to investigate, referencing a similar ruling made by the FTC against Budget Rent-a-car in 1991.

Corporate Apology

As for Enterprise, the car rental company issued a statement admitting fault and extending an apology to the Houcks. “We share the Houcks’ goal of preventing anything like this happening again,” Greg Stubblefield, executive vice president and chief strategy officer for Enterprise. “Of course, nothing can change this heartbreaking situation for the Houck family and, again, we are truly sorry for their terrible loss.”

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Categories: Consumer Tips, Money News

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".