In the rental car industry, if a vehicle is on the lot it isn't making any money. The same is true for any vehicle in the shop for repairs, including vehicles that are recalled by automakers. That has created a bit of a conundrum for rental car companies, and the drive for profits can lead to vehicles getting rented that should be getting repaired.

The Detroit Bureau reports that Hertz is trying to change that. In fact, Hertz has taken the drastic step of asking the government to enact new regulations to place a priority on getting recalled vehicles repaired as soon as possible. Hertz has had to take this step because the National Highway Traffic Safety Administration currently has no authority over the industry. NHTSA has been watching the rental car companies from afar since a 2010 accident that occurred as a result of a vehicle defect that didn't get repaired because of rental demand.

The Hertz pitch may just work, as a pair of high-ranking legislatures will reportedly introduce legislation to regulate the rental car industry. It makes sense that Hertz is looking to level the playing field, since the rental company already has a policy in place that stipulates that recalled vehicles must be fixed before being rented out.


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    • 1 Second Ago
  • 28 Comments
      Hazdaz
      • 2 Years Ago
      A classic example of how corporations can't be trusted to police themselves, and profits come before safety ... its so bad in fact that Hertz is ASKING the government to step in!
        Bob
        • 2 Years Ago
        @Hazdaz
        The article cites exactly one example of an accident, which happened in 2004, that was tied to a failure to address a safety recall in a timely manner. To you, that illustrates corporations run amuck?
          clquake
          • 2 Years Ago
          @Bob
          For something so avoidable, this is inexcusable. You should not be allowed to rent a car that needs recall work done. It's like knowingly letting your kids drive your car without working brakes. You should know better.
          Hazdaz
          • 2 Years Ago
          @Bob
          the number of accidents means squat. Would you have proffered for there to have been thousands of accidents and dozens of deaths? Also who knows the repair record of any car you rent? An accident could easily be the fault of poor maintenance but a driver would never know. the shear fact that one if the key players in this industry is calling for intervention speaks volumes to how bad the problem is. Oh, and if you have followed the auto industry, you'd know that this is a bigger problem that that 1 reported accident shows. Other auto journalists have reported on this issue previously.
          MONTEGOD7SS
          • 2 Years Ago
          @Bob
          What if I use my car to, oh I don't know, get to work and back? Now my car is going to sit while they do repairs on rental cars, all because the companies can't have the common sense to get them done promptly. They are wanting the government to force them to do what they should already be doing.
      SloopJohnB
      • 2 Years Ago
      It's pretty appalling that this loophole exists. Hz has a pretty good advertising edge...just publicize their policy that all rental vehicles have had any outstanding recalls accomplished before rental. Other companies will have to follow suit to maintain their market share. I can just see Dollar posting a sign saying "All our rental cars may or may not have had necessary recalls accomplished depending on customer demand for the cars."
      Toneron
      • 2 Years Ago
      Yes please! More buildings full of people we get to pay for pensions and lifetime healthcare for!
      Charles Chen
      • 2 Years Ago
      @Bob and @Toneron I don't think you guys know what you're talking about. In this case, the industry itself is asking for the federal government to step in and standardize the regulations regarding recalled vehicles. As a consumer who rents cars quite often for work, it should not be my responsibility to research and know off the top of my head whether there is a pending recall for a car that I am given and if there is one, whether the vehicle in question has been through the recall process and repaired. It's simply not practical and it should not be at the consumer's risk. This is simple common sense: if there is a known safety issue for a vehicle, it should be repaired -- especially rental cars as the condition of the vehicle is largely unknown to the consumer at time of rental (as opposed to one's own vehicle). To generalize and badmouth the federal government without consideration for the issue at hand only shows the ignorance with which you are commenting.
        Slizzo
        • 2 Years Ago
        @Charles Chen
        While I agree with what you state whole heartedly (It's not your responsibility to know what needs to be repaired on any particular vehicle at any time and if it has been done); it should be corporate policy (with a no exceptions kind of rule) that any vehicle that is under recall have the repair work done before it is allowed out on the streets with a customer behind the wheel. I agree with Hazdaz above, the rental companies should already have policies in place that regulate the rental of recalled vehicles.
          Charles Chen
          • 2 Years Ago
          @Slizzo
          It's exactly because they don't -- and most consumers would assume that they do -- that federal regulations are required.
        Murad
        • 2 Years Ago
        @Charles Chen
        Bob's comments are reminiscent of the famous Ford Pinto "Let Them Burn" memo. His argument is that companies will do the right thing because the wrong thing costs them money and reputation. We've been down that road before.
      Bob
      • 2 Years Ago
      Once the government is in charge, rental cars will be as safe as commercial trucks! Yay!
      2 Wheeled Menace
      • 2 Years Ago
      Sounds like Hertz is legislating for a competitive advantage because they're not doing as well as they'd like. IMHO, rental car companies like this should self-regulate since they can get the pants sued off them for something like this. Gosh, i do love it when we get more regulations. That never makes anything more expensive or complex..
        icemilkcoffee
        • 2 Years Ago
        @2 Wheeled Menace
        Not true. This is a matter of unfair competitive advantage. For example- rental company A does the responsible thing and sends all its cars out to have safety recalls done. Company B doesn't bother with such niceties. Company A has to charge you $30 because their overhead is higher, while company B gets by charging you $25. Company B flourishes and its stock price goes through the roof. Company A, while doing the right thing, goes bankrupt. Several years down the road news comes out that several company B car renters have gotten hurt in their unsafe rental cars and several of the buyers of their used cars likewise. But who cares- Company B's CEO already retired with a golden parachute and went on to become presidential candidate (campaign slogan: 'corporations have feelings too'). Now you see- good regulations are good for competition. We need rules in the marketplace for the exact same reason why we need rules for the NFL- it makes for fair competition.
        Nemebean
        • 2 Years Ago
        @2 Wheeled Menace
        No, Hertz is saying "We do this, and everybody else should too." I happen to agree. This would give them precisely zero competitive advantage because everyone would have to follow the same rules. Clearly self-regulation isn't working if cars are being rented with unhandled recalls on them. I don't particularly care to have my safety dictated by some suit deciding that it's cheaper to pay a few lawsuits than to fix their cars. This whole "regulations are evil" argument is such an over-generalization it just boggles the mind.
        Doug Cornelsen
        • 2 Years Ago
        @2 Wheeled Menace
        Well if any of my three girls were killed in a rental car accident involving a vehicle that wasn't safe because recall's had been ignored, I'd sue to the point that they'd have to file for bankruptcy...I just don't consider any one of my three daughters "expendable". Dgaf if you disagree 2 Wheel Moron....I mean Menace...
      Quen47
      • 2 Years Ago
      I used to be a manager for Enterprise Rent A Car, who are lobbying hard against this bill. The reason they are fighting this so hard is that most of its business comes from insurance-replacement rentals from local branches- not huge airport locations. ERAC's position is important because contrary to public opinion they are the largest rental car company in the US in terms of fleet size and vehicles on rent. Turnover at these locations is fast, and the pressure to get a car for every person while at the same time running "tight" (fewest possible cars on the lot) is enormous. When I worked there we would regularly put recalled vehicles back on the road, because one of the primary metrics upon which we were we were judged was on the percentage of cars we had on rent. We would get a call from the regional office if we did it too much, but there was no system in place for us to prevent this from happening. Renting them a few more times before they were pulled from the fleet was in my opinion, tacitly encouraged and certainly widespread. I can absolutely see why this law is needed- the profit motive for the individual manager is just too strong.
        t0f
        • 2 Years Ago
        @Quen47
        You're incorrect. Enterprise has changed their position and are supporting the bill. Pam Nicholson (for those that don't know, Enterprise's President and COO) emailed a memo to all employees this morning stating that they are changing their tune.
      the.nope
      • 2 Years Ago
      Yeah this is sad they havent done anything to insure renters safety. Back a couple years ago on the news these 2 friends rented a PT Cruiser from avis or National or somewhere but the car had been recalled for a possible fire hazard. Well the company didnt send it in and it was one that needed too. At least 1 of them was killed when the car burst into flames while they were driving. thats just sad that companies put profit over human lives
      GearHeadDeals.com
      • 2 Years Ago
      Good for them. In a country so full of safety regs. It's odd this wasn't setup before. Why is everyone BUT the rental car companies scared of lawsuits?
      Murad
      • 2 Years Ago
      My parents rented a 2011 Hyundai Sonata one month after the massive recall. The steering system failed while they were traveling on the interstate. Luckily there was a guard rail to catch them. Luckily no other cars were involved. Luckily they only suffered minor injuries. It's completely crazy that while it's illegal for a car dealer to sell cars subject to safety recalls, no legal barrier exists to renting the same exact cars. Will it be costly to car rental companies? Will the price of renting a car go up as a result? Probably. I hope none of your parents are put at risk though. The insurance companies will create a "product" to soften the financial setback to rental car companies. Here's a crazy thought: Maybe Honda, Toyota, Ford and the rest of the top (by total number of vehicles) recalled carmakers will build safer, better designed and over-engineered cars. Why? So they could earn rental car companies' business, once the actuaries figure the cost of indemnifying the car companies' products.
        Murad
        • 2 Years Ago
        @Murad
        Here's a link to back up the last paragraph: http://wheels.blogs.nytimes.com/2012/01/06/with-3-9-million-vehicles-honda-leads-all-automakers-in-recalls-for-2011/
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