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Rental companies still using recalled vehicles

U.S. law prevents car dealerships from selling defective vehicles that have been recalled by the auto manufacturer. However, rental car companies are still able to rent vehicles that have been recalled for safety issues, putting consumers at risk for being in a serious car accident.

Congress is hoping to change this through a proposed bill that would prevent rental car companies from renting or selling vehicles that have been recalled for a safety hazard until the problem has been fixed or repaired.

The proposed Safe Rental Car Act would require rental car companies and auto dealerships that rent vehicles or provide loaner cars to consumers to stop using vehicles recalled for auto defects. The companies would be required to ground any vehicle that has been recalled within 24 hours of receiving the recall notice from the vehicle's manufacturer. Companies would have 48 hours to ground recalled vehicles that amount to 50,000 or more vehicles in their rental company.

The bill also gives the National Highway Traffic Safety Administration more power to investigate how rental car companies handle auto safety recalls and allow the NHTSA to enforce fines and penalties for companies that violate the law.

Many rental car companies support the legislation. However, there is some opposition to the proposed bill. The Alliance of Automobile Manufacturers said that the bill may make it more difficult for individual consumers to have recalled vehicles fixed because rental car companies would be required to fix a higher number of vehicles right away. Another concern opponents voiced was that the bill does not distinguish between what recalls need immediate repairs and which minor issues do not.

Despite some opposition, there seems to be more support for the legislation. Safety advocates say that it is important to make sure rental car companies are keeping unsafe vehicles off the road to protect everyone and the new legislation will help decrease the number of accidents caused by unsafe and defective vehicles.

Source: CNBC, "Bill Targets Rental Car Companies Loaning Defective Vehicles," Herb Weisbaum, May 22, 2013

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