Tuesday, July 29, 2014
Inquirer Daily News

Enterprise rent-a-recall: Do other companies do it, too?

Enterprise Rent-a-Car is still willing to rent recalled-but-unrepaired vehicles, even after a jury ordered it to pay $15 million to the parents of two young women killed in a fiery crash in California that was blamed on a defect that Enterprise had known about for a month. Enterprise says it makes a case-by-case determination of whether immediate repairs are needed. Do other rental companies take similar risks?

Enterprise rent-a-recall: Do other companies do it, too?

Enterprise Rent-a-Car is still willing to rent recalled-but-unrepaired vehicles, even after a jury ordered it to pay $15 million to the parents of two young women killed in a fiery crash in California that was blamed on a PT Cruiser defect that Enterprise had known about for a month.

Enterprise fought the parents for several years, then reversed itself and accepted 100 percent liability in May - you can read my Inquirer story about the case and its aftermath by clicking here. The jury's role was only to quantify the damages - as if the loss of 20- and 24-year-old daughters can be compensated for in money.

Now the young women's mother is pushing for change at Enterprise, which says that it has tightened its procedures since the 2004 crash and would not have rented the PT Cruiser under today's rules, but says that it still might put other customers into recalled vehicles. In particular, Enterprise suggests it might do so if a manufacturer, in a recall done in consultation with the National Highway Traffic Safety Administration, does not specifically recommend that a vehicle be "grounded" - in other words, that it be repaired immediately without any further use. Click here to read Enterprise's July 7 statement, which a spokeswoman reiterated Monday.

Carol Houck, joined by two consumer groups, is asking the Federal Trade Commission to order Enterprise to change its case-by-case policy. Houck and the advocates say consumers should be protected from renting recalled vehicles because they are unable to evaluate the risks entailed in recall notices they would have no occasion to see before taking the keys and driving away. Because of that lack of knowledge, they say that Enterprise's promise to provide an alternative vehicle to customers "if they express concerns about using any car" is largely meaningless.

There are other arguments in favor of a bright-line policy, including that rental cars are used differently than personal vehicles. Yes, a consumer might delay for days or weeks before following through on a recall's recommended repair. But that consumer would at least be aware of the risks and might use the vehicle more sparingly and warily - and might be especially watchful, say, for under-hood smoke that might indicate an incipient fire. The PT Cruiser blamed in the Houck sisters' deaths had already been rented three times after the recall before it was given to them as an "upgrade." In fact, it was simply the last vehicle in the rental company's lot.

Enterprise's parent company, Enterprise Holdings, also owns the Alamo and National car-rental businesses, making it the nation's largest car-rental company. But the story raises the question: What do other large rental-car companies do? Unfortunately, it's not clear whether their policies differ substantially from Enterprise's. I'll share the details with you so you can judge for yourself.

Alice Pereira sent this statement for Avis Budget group (Enterprise isn't the only rental-car company "competing" with itself nowadays):

Avis Budget Group Safety Recall Handling

 The National Traffic and Motor Vehicle Safety Act gives the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) the authority to issue vehicle safety standards and to require manufacturers to recall vehicles that have safety-related defects or do not meet Federal safety standards.

Manufacturers voluntarily initiate many of these recalls, while others are either influenced by NHTSA investigations or ordered by NHTSA via the courts. If a safety defect is discovered, the manufacturer must notify NHTSA, as well as vehicle or equipment owners, dealers and distributors, as well as rental car companies. The manufacturer is then required to remedy the problem at no charge to the owner. NHTSA is responsible for monitoring the manufacturer’s corrective action to ensure successful completion of the recall campaign.

Avis Budget Group’s formal practice is that when we are made aware of a recall in which the safety of our customers may be at risk, we remove from service all affected vehicles until repairs can be completed. All affected vehicles that are out on rental at the time that we receive notice are taken out of service as soon as they are returned.

In most cases, the repairs can be made very quickly and so vehicles that may still be under an ongoing safety recall may be returned to service and rented out after undergoing repairs.

Avis Budget Group maintains a very diverse fleet, with more than 100 different makes and models, which means that any one make/model that may have to be removed from service for recall repairs is very unlikely to impair our ability to fulfill pending reservations and forecasted demand.

Hertz posts its policy online here - the full version refers also to fleet vehicles and cars being offered for sale. Here's the portion referring to rental vehicles:

Hertz Vehicle Recall Procedure

Procedure

 A. General

1. It is the policy of The Hertz Corporation to promptly repair all vehicles subject to manufacturer recalls.
2. All safety related recalls will be coordinated through the Corporate Fleet Department in Park Ridge with the exception of Canada, where manufacturers notify both the locations and Canadian Regional Office in Toronto, Canada.
3. Repairs for all recalls must be completed as soon as possible after receiving the Recall Notice from the manufacturer.
4. Safety-related recalls not promptly repaired must be placed on "Shop" status until the repair work is completed. Every effort must be made to complete non-safety related recalls within 60 days of parts availability from the manufacturer.
5. At Hertz locations that have in-house maintenance facilities, the recall work is performed locally following the repair instructions supplied by the manufacturer. Completion of affected vehicles is reported to central management. When no in-house maintenance facilities exist, vehicles are sent to manufacturer's local dealership for repairs.
6. Repairs completed by Hertz mechanics for recall vehicles are recorded on internal repair forms and maintained in vehicle maintenance history files. The service mechanic will place a "Campaign Completed Recall Sticker" on the driver's door frame. The date of the repair and recall number will be noted on the sticker.

Clarence Ditlow, executive director of the Center for Auto Safety, says he believes that Enterprise isn't alone in  practices that he believes expose car renters to needless and hidden risk.

Avis Budget Group's policy seems to say that it takes vehicles from service, but it's not entirely clear whether there is wiggle room, like the latitude that Enterprise claims, in the phrase "a recall in which the safety of our customers may be at risk." As Ditlow says and agency officials confirm, any recall that NHTSA is involved in is, by definition, safety-related - safety is the agency's mandate.

And Hertz? "As soon as possible" is not the same as saying, "before the vehicle is offered for further rental."

Unfortunately, it's easy to see why Ditlow remains suspicious. I'll keep you posted if Enterprise's competitors offer additional clarifications.

 

 

 

Jeff Gelles Inquirer Business Columnist
About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
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