Car Rental: How to Avoid Being Taken for a Ride

Car-rental companies’ reputations are a wreck. Fortunately, after months of haggling by the companies, legislation that bars them from renting recalled vehicles is now on track. But disputes over damage claims still can spell trouble when you get behind the wheel.

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Horror stories abound of car-rental agents’ constant push to upsell you on insurance, roadside assistance coverage and GPS technology. Those antics are enough to make you gnash your teeth, but, as the late-night pitchmen like to say, “Wait, there’s more.”

The policy of renting recalled vehicles has come into question by consumers and politicians of late. As shocking as it sounds, car-rental companies aren’t required by law to take out of circulation recalled vehicles in the same way that car dealerships are—a fact that has led to at least two deaths. At press time, the House and the Senate had proposed legislation to end this discrepancy, and finally, after months of heel-dragging, three of the four major car-rental companies decided in September 2012 to back the legislation. (Hertz pledged its support earlier.)    

However, you still might be charged excessive fees if you stray from car-rental companies’ rules on fuel or electronic tollway transponders. Worse, some operators of car-rental facilities are scamming you when it comes to damage claims, meaning that you have to scrutinize your bill as well as the vehicle itself.  

TOTAL RECALL. The car-rental industry largely is unregulated at the federal level. Consumer advocate and nationally syndicated columnist Christopher Elliott says each state regulates car-rental companies piecemeal. That means, for instance, that a state’s motor vehicle department might monitor how a vehicle is operated, and an insurance commissioner would be in charge of how a rental car is bought or sold, but nobody oversees the big picture. Pricing isn’t regulated at all, Elliott says. It’s no wonder that consumers end up falling through the cracks.

A move is afoot to change that. Sen. Charles E. Schumer, D-N.Y., who was joined by Sens. Barbara Boxer, D-Calif., and Claire McCaskill, D-Mo., wrote the Raechel and Jacqueline Houck Safe Rental Car Act of 2011, which was named after sisters who died in a head-on crash in October 2004 after Enterprise Rent-A-Car rented them a Chrysler PT Cruiser. Tragedy turned to outrage when investigators learned that Enterprise received notice of a recall on the rented vehicle a month before the crash but opted to keep the vehicle on the road—renting it three times prior to the Houck crash. Independent investigators confirmed that the crash was a direct result of the ignored safety recall. After years of wrangling with the car-rental company, the girls’ parents received a $15 million settlement in 2010.

The senators, who at press time were targeting a November 2012 passage of the legislation, were prompted to restrict the rental of recalled vehicles after the Houck family and Consumers for Auto Reliability and Safety, which is a consumer advocacy group, alerted them to the issue. 

In the House, Rep. Lois Capps, D-Calif., introduced in 2012 similar legislation that has bipartisan support. She hopes to have the bill passed by the end of 2012, although she admits that Congress’ lame-duck session could derail the legislation. If so, she says she plans to reintroduce the bill in 2013.

Hertz agreed to back the federal legislation and signed a pledge that was submitted by Boxer in May 2012 to immediately and permanently stop the rental or sale of any vehicle that’s under recall. Hertz tells us the company has a longstanding policy against renting recalled vehicles, which was reason enough to sign the pledge. 

But the other major companies—Avis Budget Group, Dollar Thrifty Automotive Group and Enterprise Holdings—refused to sign Boxer’s pledge, and it wasn’t until 4 months later, in September 2012, that they agreed to the legislation. In the interim, those companies had floated their own proposal that stated, in part, that the legislation was unfair, because limousines and taxis should abide by the same safety-recall restrictions that the federal bills propose. We agree that these industries should be regulated in the same way, but that strikes us as a weak reason to sidestep the issue of using recalled cars. As the cliche goes, “two wrongs don’t make a right.” 

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