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Rental Car Companies Oppose Recall Bill

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Enterprise Car RentalThe 2004 tragic deaths of Raechel Houck, 24, and Jacqueline Houck, 20, in a car accident involving an Enterprise rental car that was rented to them while under recall, has stirred up a hornet’s nest. Following the 2010 verdict against Enterprise, Carol Houck, their mother, has joined forces with Consumers for Auto Reliability and Safety in pushing for legislation that would prohibit rental car companies from renting out cars under a safety recall before the problem is fixed.

Since then, the idea has been gaining legs in both California and on the federal level, as Cindy Von Quednow, a reporter for The Republic, shows in her recent article:

AB 753 recently passed the California Assembly, introduced by Bill Monning, a Democrat from Carmel who represents the district where the Houck daughters died. Federal lawmakers are considering similar legislation.

In March, Sen. Charles Schumer (D-N.Y.) introduced the Safe Rental Car Act, which would ban agencies from renting recalled cars until they are fixed. The act would hold rental car agencies to the same standard as car dealerships, which cannot sell recalled cars until the defect is repaired.

It’s hardly shocking that the rental agencies have made it clear that they intend to fight this. Ben Kelly, a board member of the Center for Auto Safety and injury policy director of the Trauma Foundation (both of which have endorsed the safety legislation), recently wrote in Fair Warning:

The legislative battle has national significance for two reasons. First, California is known as a leader in passing safety and environmental laws that eventually are adopted in other states, and second, a U.S. senator has announced plans to introduce a similar bill at the federal level.

Of course, whenever the idea of regulation comes up, there is always a pitched political battle over it. Especially when it represents changes as fundamental as the ones proposed. Kelly notes this as well in his article:

AB 753 had been expected to move smoothly toward final adoption, but at an April 5 hearing of the Assembly Judiciary Committee, rental car companies, including Enterprise, Hertz and Avis, testified vigorously against its adoption and made it clear they will fight hard to stop it.

The bill only requires the rental agencies to do something they already claim to do in “the vast majority” of cases — have cars under recall serviced before renting them. Of course, this could represent a major cost outlay for the companies, considering that there is $3.5 billion worth of car rental business per annum in California alone.

When you are speaking of that sort of volume, even “infrequent” issues could potentially jeopardize thousands of lives. It is also worth considering whether this might spur similar legislation related to the used car industry which is starting to come under fire for similar reasons.

Image by XMinusOne, used under its Creative Commons license.

 

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