NHTSA Announces New Law Requiring Rental Companies to Address Recalls

Rental car companies must now repair any outstanding recalls on their vehicles before being allowed to rent them to consumers.

It used to be that recall repairs weren’t required on rentals. Car dealerships that were selling new vehicles had to be sure they were up to date on any recalls, but rental car companies were exempt from any similar government oversight as far as recall repairs were concerned.

A new law that recently went into effect has changed that.

Rental Car Companies Must Now Ensure Cars are Repaired

On June 1, 2016 the National Highway Traffic Safety Administration (NHTSA) announced in a press release that because of new legislation recently passed by Congress (as part of the “Fixing America’s Surface Transportation [FAST] Act of 2015”), rental car agencies “must fix any and all open safety defects before renting out vehicles to customers.”

NHTSA Administrator Mark Rosekind stated that families should be able to use rental cars with peace of mind, knowing they are free of known safety defects.

Any rental car agency that has more than 35 vehicles in their fleet is now prohibited from renting any cars that are under recall and have not been fixed. The new law also gives the NHTSA the authority to keep an eye on rental car companies, and to investigate and potentially punish those who don’t comply with the new law.

Law Passed to Prevent Tragic Deaths

The new law was championed on behalf of Raechel Houck, 24, and her sister Jacqueline, 20, who were both killed in 2004 in a rented PT Cruiser. The Cruiser was under recall to fix a defective power steering hose, but had not been repaired. While the sisters were in the vehicle, it caught fire, and Raechel lost control and crashed into a semi-trailer. Both occupants were instantly killed.

The sisters’ mother, Carol, told CNNMoney that she was “shocked” to find out that there were no laws prohibiting the rental of a potentially defective vehicle.

This is only one of many similar tragic stories. Jewel Brangman also died when the Takata air bag in her Honda Civic she had rented from a small rental company exploded. There are currently about 70 million Takata air bags under recall worldwide, but only a small percentage of those have been repaired.

Some rental companies changed their policies before the law went into effect. These included Hertz, Enterprise, and Avis. Though the repairs can take time and may take some vehicles out of service, automakers do pay for the repairs.

Used Cars Still Exempt from Required Repairs

Though this new law will ensure that rental cars are safer to drive, and new cars must be repaired as well, used cars come with no similar guarantee. There is no law requiring dealerships to repair used vehicles that are under recall, which means they can sell them with potential safety defects.

Consumer advocacy groups are trying to change this. The Consumers for Auto Reliability and Safety, for instance, started a petition to stop CarMax from selling unsafe, recalled cars to consumers without getting the repairs completed first. They cited an incident in which a couple bought a Dodge Ram from CarMax in Irvine, CA, and later found out that it was under recall for a potentially defective drive shaft. CarMax had failed to get it repaired.

The couple tried to return the vehicle, but CarMax wouldn’t take it. The couple took the vehicle to the Chrysler dealer after which they thought it was fixed, but a few days later it “fell apart” on the highway and caught fire. The couple and their daughter barely escaped.