Win! Rental Car Companies Can No Longer Give You Recalled Cars That Could Burst Into Flames

Sometimes a piece of consumer legislation comes along that’s so head-slappingly basic you wonder how such a thing was ever legal, and how more people haven’t died as a result. Such is the case with an agreement signed this week by five major rental car companies, soon expected to be passed into law, banning them from renting out cars that have been recalled by their manufacturers.

That’s right, there is currently no law on the books prohibiting rental car companies from renting out recalled, potentially dangerous cars to customers. Unfortunately, it took the deaths of two young women, plus years of campaigning by their mother and other consumer safety advocates to turn things around.

Death of Raechel and Jacquie Houck

The accident that killed sisters Raechel and Jacquie Houck is horrifying on its own, but the fact that their deaths were preventable and caused by corporate negligence makes the story that much worse.

On October 7, 2004, 24-year-old Raechel Houck rented a PT Cruiser from Enterprise Rent-a-Car in Capitola, California. The car was new, a 2004 model, but it had a critical defect. As Enterprise had learned a month earlier, Daimler Chrysler had recalled this model due to “a power steering hose that could leak and ignite on the catalytic converter, causing a fire under the hood,” according to Ojai Valley News. After learning of the safety recall, the branch rented out the vehicle to a total of four customers, including Raechel.

A few hours after getting the keys to the Cruiser, Raechel was driving down Highway 101 with 20-year-old Jacquie when the car “crossed the grass median and hit a southbound big rig, bursting into flames,” the Santa Cruz Sentinel reports. Both women died on the scene.

Enterprise responded to the accident by offering the Houcks’ parents, Cally and Chuck, $3 million, according to the family lawyer. Instead, the family chose to go to court, where Enterprise argued that the accident had been caused by negligent driving on Raechel’s part.

“I knew in my heart, always, that Raechel was a very good driver,” Callie Houck told reporters during the 2010 trial. “Having lived in Europe for two years, she spent a lot of time driving the roads of rural Italy. She was very cautious and would never have taken any chances.”

It was also revealed in court that Enterprise, which also owns National Car Rental and Alamo, made a regular habit of renting out recalling vehicles:

Enterprise corporate philosophy was "you've got to keep booking, because you don't know when you are going to get a car back. But then of course, you run short on vehicles, and if all you have are recalled vehicles on the lot, you rent them out. It was a given. The whole company did it."

[Enterprise branch manager Mark Matias’s] statement explained his understanding of the policy: If a priority recall appears on the computer screen in the rental office, the employee is required to write the word "recall" on a Post-it note and place it on the key in an area designated for non-rentals, but nothing prevents an employee from renting that vehicle.

It’s a practice that car safety advocates have dubbed "rental car roulette."

In the end, the jury awarded the Houck family $15 million, which, according to Cally Houck, went to legal fees and the family's RageJax Foundation, an art and music education charity.

Legacy of Safety Problems

Although the Houcks won a large settlement in the case, they did not feel justice had been served for one major reason: Enterprise didn’t agree to change its policies about renting recalled cars. In fact, the Houcks learned, none of the major car rental companies had policies in place that would’ve protected their daughters from renting a car with a known safety defect, and none of them planned to change.

Furthermore, Enterprise has a long history of safety problems, beyond the recalled car issue. Most notably, it came out in 2009 that the company had sold 66,000 Chevy Impalas without side airbags, which were standard, but which the company had requested be “deleted” from the cars when it originally purchased them to save money. What’s more, Enterprise incorrectly noted that some of the used cars contained side airbags when they did not.

One of the most cited accidents to stem from the deleted airbag move involved an Iraq war veteran named Bryson Casey who in 2008 was driving an Impala he had rented from Enterprise when the car hydroplaned into oncoming traffic. Casey was struck by another car and rendered quadriplegic. “He survives Iraq and comes back to being maimed in a car wreck,” Casey’s lawyer, Chad Lucas, said. “The claim ends up being that there is no side airbag in this car, and if there had been, our experts said he would not have sustained the neck injury that he did and he would have walked away from the crash.” (Casey sued both GM of Canada and Enterprise, and reached a confidential settlement.)

Activists and Advocates Keep Pushing

Groups like the auto club and car safety lobbying group AAA and Consumers for Auto Reliability and Safety (CARS) have long supported laws that would keep car rental companies from renting recalled vehicles, and their efforts only intensified in the wake of the Houck tragedy.

In February of this year, there was finally some good news on that front: Hertz, one of the largest rental car companies in the country, struck an agreement with CARS to stop renting potentially unsafe vehicles until they’ve been fixed.

At that point, the advocacy and activism around the issue kicked into high gear. Cally Houck started a petition urging Enterprise to “stop opposing a law prohibiting companies from renting out recalled cars.” Addressed to Enterprise CEO Andrew Taylor, the petition letter states:

We are gravely concerned about the safety of the vehicles that Enterprise is renting. Enterprise has a history of renting out dangerous, recalled vehicles and has opposed legislation that would prohibit this practice. To ensure the safety and lives of your customers and the general public, we ask you to drop your opposition to legislation that would require all rental car companies to fix any recalled vehicles before renting them out again.

Currently, manufacturers and new car dealers are prohibited from selling new cars that are under safety recalls. All we ask is that rental car companies, such as Enterprise, are held to this same, common-sense safety standard.

Meanwhile, several members of Congress -- Lois Capps (D-CA), Eliot Engel (D-NY), and Jan Shakowsky (D-IL), and Elton Gallegly (R-CA) -- used the momentum of the Hertz agreement to start pushing for a law that would make it illegal for all car companies to rent recalled vehicles.

A Win for Consumers

Houck’s petition garnered some 162,000 signatures, and the issue picked up steam throughout the summer. On September 27 there was big news: Enterprise, Hertz, Avis, Dollar Thrifty, and National, agreed to cease the practice of renting out recalled cars.

The bill that would make all of this law, H.R. 6094, is expected to pass during the next congressional session.

This case gives us an important look into how activists, lobbyists and ordinary citizens can work together to protect consumers. It’s also a lesson in how much foot-dragging companies will do to avoid having to do the right thing. The rental car companies surely would’ve kept cutting corners to pad their bottom lines if the Houcks and all the other players in this story hadn’t pressured them, hard. The most basic rights -- like the right to know the car you rent won’t burst into flames -- are often hard won.


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