Hertz and safety advocacy group, Consumers for Auto Reliability and Safety, have reached a landmark agreement that calls for Congress to give the National Highway Traffic Safety Administration (NHTSA) authority over the car rental companies’ recall-related practices as well as prohibit them from renting or selling these recalled vehicles until they have been repaired. According to a news report in USA Today, this historic agreement adds momentum to an amendment with the same provisions backed by Senators Barbara Boxer and Charles Schumer. The amendment is likely to be included in a surface transportation bill, which the Senate is expected to take up later this month.

Recalled Vehicles and Rentals

According to statistics compiled by USA Today, Hertz and Enterprise, the nation’s largest rental car companies, had nearly 184,000 vehicles that were recalled for a variety of auto defects last year. In 2010, when Toyota recalled millions of vehicles for sudden acceleration problems, Enterprise had about 350,000 vehicles, about 22 percent of the industry’s entire fleet, under recall. According to NHTSA, 15.5 million vehicles from various model years were recalled in 2011. That number was much higher at 20 million in 2010.

Preventing Tragedies

Although Hertz has signed this agreement, other trade groups are putting up some resistance saying that federal regulation on this matter is unnecessary. These trade groups say they voluntarily refrain from renting vehicles as soon as they receive a recall notice from a manufacturer. Such a reassurance proves futile for Cally Houck, who tragically lost both her daughters Raechel and Jacqueline, after their recalled and rented PT Cruiser crashed into a large truck. Houck was awarded $15 million by a jury after Enterprise admitted liability in that case.

The Need for Government Regulation

NHTSA launched the ongoing probe of the rental car industry at the request of several consumer safety groups. A study by the Government Accountability Office (GAO) in June 2011 found that all rental car companies either put recalled vehicles in a “hard hold,” which means they will not be rented until fixed or a “soft hold,” which means they will be rented out until they are fixed. So, there is no assurance for consumers without government oversight that rental car companies will voluntarily ground these defective vehicles.

It is hard to believe that rental companies, without oversight, regulation or fear of penalty, will voluntarily stay away from renting out vehicles that are under recall. What happens during busy holiday weekends? Do they stick to their policy? How do they decide what vehicles are under “soft hold?” As a California personal injury lawyer who represents victims of defective autos, I certainly hope that rental car companies know they are being watched. Someone needs to make sure that they do the right thing.