Washington — General Motors Co. said Wednesday it will back legislation that will require companies to repair used rental cars before they are sold or rented — becoming the first automaker to do so.
The Detroit automaker told Sen. Charles Schumer, D-N.Y., in a letter that it would back legislation — which has won the support of major rental car companies — if it won minor changes. The authors agreed to include two sentences making clear automakers don’t face new civil liability for fixing rental cars.
Automakers have feared rental car companies could seek to charge them for the loss of use if they were grounded during recalls. Current law bans only auto dealers from selling a new car under recall unless the defect has been remedied.
“When buying or renting a car, the last thing we should worry about is if the car is defective or recalled,” Schumer said. “I thank General Motors for endorsing our common sense legislation and hope it opens the door for more car manufacturers to do the right thing and support our bill to keep consumers safe.”
The legislation was named after two sisters from Santa Cruz, Calif., Raechel and Jacqueline Houck, who were killed in 2004 when a recalled Chryser PT Cruiser they had rented from Enterprise caught fire and hit a truck.
“The safety of anyone who drives or rides in a GM vehicle is extremely important to us,” said GM CEO Mary Barra. “We have worked constructively with Sen. Schumer, and the cosponsors of The Raechel and Jacqueline Houck Safe Rental Car Act. Through those conversations we have addressed our concerns, and with changes agreed to by the sponsors, GM is able to support their legislation. If enacted, it will give those who rent a vehicle, regardless of make or model, the peace of mind that the car they are in is safe.”
“I welcome GM’s support for Sen. Schumer’s bill, named after my treasured daughters and co-sponsored by my Sen. Barbara Boxer,” said Carol Houck, mother of the sisters. “It’s time for the rest of the auto manufacturers and the auto dealers to follow the rental car industry, and GM, and support the bill.”
The Obama administration would go further and in April proposed banning the sale of used recalled cars by dealers, unless the recalls were completed first. The National Automobile Dealers Association, criticized the proposal to force dealers to fix used cars before selling them. “The proposed recall language is overly broad, as it would ground every vehicle under open recall even if the issue does not actually impact passenger safety, such as an owner’s manual misprint,” the group said in April.
Boxer had pressed Barra at an April hearing to back the bill. “General Motors’ endorsement is an important step in our campaign to pass the Raechel and Jacqueline Houck Safe Rental Car Act and keep unsafe rented vehicles off the roads,” Boxer said.
Last year, the Alliance of Automobile Manufacturers, the trade group representing Detroit’s Big Three automakers, Toyota Motor Corp., Volkswagen AG and seven others — along with NADA which represents 16,000 new car dealers — told a Senate committee that oversees auto safety that they didn’t support the Schumer bill endorsed by rental car companies that would end the practice of allowing the rental of unrepaired recalled vehicles.
Then-National Highway Traffic Safety Administration chief David Strickland endorsed the bill, saying it will fix “a very serious gap in federal law.” He said major rental car companies repair just 50 percent of recalled vehicles in the first four months and 60 percent after a year.
Rental cars make up 1 percent of all U.S. vehicles. Avis and Enterprise noted taxis, limousines and car services aren’t covered by the legislation.