Since 2016, a federal law requires rental car companies to fix any recalled car before it' can be rented out. Amazingly, until then it was perfectly legal for car rental companies to rent out a recalled car that had not yet been repaired.
The Rental Car Safety Recall Law was passed by Congress in the Fixing America's Surface Transportation (FAST) Act of 2015.
Federal law now prohibits any company or dealer with fleets greater than 35 vehicles to rent unrepaired recalled vehicles. It also extends National Highway Traffic Safety Administration's (NHTSA) recall authority to cover rental car companies for the first time, giving the safety agency power to investigate and punish violators.
In one of the highest profile cases, sisters Raechel and Jacqueline Houck, aged 24 and 20, were killed in October 2004 after being upgraded by Enterprise to a car with a known fire risk. They were driving a PT Cruiser when it caught fire due to a defective power steering hose. Smoke poured into the vehicle's cabin and Rachel Houck lost control of the car and crashed head on into a semi-tractor, killing both women instantly.
The deaths of the Houck sisters led to a large financial judgment against Enterprise. Multiple Congressional bills were introduced in an attempt to take rental vehicles off the road but by then the major rental car companies had elected to handle recalls on their own. The three major companies representing over 90 percent of the U.S. market implemented policies to remove rental cars with active recalls from their rental fleets.
What Does a Vehicle Recall Mean?
A recall issued through the NHTSA means that there's a safety-related defect that's present in multiple vehicles:
Generally, a safety defect is defined as a problem that exists in a motor vehicle or item of motor vehicle equipment that:
* Poses a risk to motor vehicle safety, and
* May exist in a group of vehicles of the same design or manufacture, or items of equipment of the same type and manufacture.
Both parts of the federal government's definition are critical -- many vehicles susceptible to the same safety issue. If a rental car company learns of a risk to motor vehicle safety and doesn't fix the issue, there is massive potential for financial liability across the rental fleet. Today, rental car companies are smart enough to handle recalls as quickly as possible. Yet in the not-so-distant past, rental car companies didn't even contemplate whether recalled vehicles should be pulled off the road. The rental car companies only learned about proactively handling recalls after the deaths of Raechel and Jacqueline Houck in a recalled Chrysler PT Cruiser in 2004.
Consumers can use NHTSA's free Recall Look-up Tool to determine if a vehicle has an open safety recall that needs to be addressed.