Rental Car Safety Act Facing Opposition From Dealers, Carmakers

Things got heated in a Senate committee Tuesday as lawmakers, safety advocates and auto industry representatives debated whether or not car rental companies should be allowed to rent vehicles that have been recalled.

In many ways, it seems like a no-brainer. If a car has been recalled for something that could be dangerous and result in death, shouldn't somebody fix it before handing it out to unsuspecting renters?

"The most common reaction we get from people is, 'You mean this isn't the law already?'" said Rosemary Shahan, president of Consumers for Auto Reliability and Safety.

It isn't. And it's actually more complicated to enact than one would think. Auto dealers and industry associations are pushing back, saying the current bill structure puts them at a disadvantage.

The Raechel and Jacqueline Houck Safe Rental Car Act of 2013 is named for two young sisters from California who died in a fiery crash in 2004. They were driving a rental car that had been recalled because a leak could cause a fire in the engine compartment. The rental car company had been notified about the defect a month before the fatal wreck.

The measure is supported by major rental car companies and several consumer groups.

Sen. Barbara Boxer (D-California) said Tuesday she's going to lobby all over the country in favor of this bill. "I think what we heard today was a little bit of nonsense, honestly," she said after hearing testimony from the auto industry group Auto Alliance and from the National Automobile Dealers Association.

When cars are recalled now, carmakers send out a recall notice to dealers explaining the problem, how many cars are affected, and what will be done to fix the problem. Sometimes the automakers don't have a fix in place, so they need time to figure it out. Many times they don't have the parts on hand, either, so that takes time to work out, too.

It can take months from when a recall notice is issued to when a car actually gets fixed. During that time, regular consumers continue driving their cars, unless the problem is severe enough to warrant a stop-driving notice.

The Rental Car Safety Act would force rental companies to park recalled cars as soon as they get a recall notice. That's what makes the bill unfair, said Jack Fitzgerald, owner of a dealership in Maryland which also operates Rent-A-Wreck.

In a recent interview, Fitzgerald said it's unfair that private owners can drive their vehicles while under recall while small businesses which rent out five or more cars would be forced to ground their fleets. Bigger rental companies, like Enterprise, Hertz and Alamo, have thousands of cars to choose from and won't be as hard-hit as the smaller companies, he argued.

"All this is going to do is create a great deal of hardship for small companies," he said. "It's a classic example of big business using government regulations to get an edge over others."

What are your thoughts? Do you think rental car companies should be forced to park cars that are under recall?

The Associated Press contributed to this report.