Should the Government Regulate Recalled Rental Cars

by Sean Bryant on February 22, 2012

Every day thousands of individuals all over the world rent automobiles for both business and leisure. When we get in this car we feel that we have just rented a safe and reliable car. This can be far from the truth.

In 2004 Raechel and Jacqueline Houck died in a car crash while driving a PT Cruiser. This is the same PT Cruiser that had previously been issued a recall because of a power-steering fluid problem. The PT Cruiser had been rented out three other times after the recall before the Houck family.

The power-steering fluid leaked while they were driving and it caught on fire. The proceeded to lose control of the car and it then ran into a semi tractor trailer.

“The rental car industry is the single largest purchaser of new cars, and the single largest source of used cars in North America, yet they have escaped all regulation and oversight from the National Highway Traffic Safety Administration (NHTSA),” Houck says.

This could be coming to a change now though. Both Hertz and Consumers for Auto Reliability, which is a safety-advocacy group, have agreed to give HSTSA authority over companies recall-related practices. This will require rental car agencies to fix any recall issue before they are allowed to rent, lease or sell any vehicle.

According to a recent USA Today article hundred of thousands of vehicles a recalled each year for different safety issues. When Toyota had all of their problems last year Hertz and Enterprise had a combined 350,000 vehicles recalled. A representative for Enterprises has said that they have put a remedy on a recalled vehicle and avoided actually taking it to a dealership.

The real quest now is going to be how effective will these new regulations be? Is this really going to cause the issues to be fixed in a timely manner or is it going to take another large accident for this to really be enforced?

Thanks to USA Today for the information for this article.

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Sean Bryant

Sean Bryant created in 2011 to help pass along his knowledge of finance and economics to others. After graduating from the University of Iowa with a degree in economics he worked as a construction superintendent before jumping into the world of finance. Sean has worked on the trade desk for a commodities brokerage firm, he was a project manager for an investment research company and was a CDO analyst at a big bank. That being said he brings a good understanding of the finance field to the One Smart Dollar community. When not working Sean and he wife are avid world travelers. He enjoys spending time with his daughter Colette and dog Charlie.

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