The Challenge to Comply

The Safe Rental Car Act has passed, and now it’s time for all of us in the industry to take on the challenge of compliance with the law. I am taking steps within my organization to ensure that our franchised and corporate-owned and operated locations are in full compliance. However, I have opposed this legislation from the outset because it is based on a recall system that is, to put it simply, broken.

I am very concerned about the implications of this bill on the health and welfare of both the public and the car rental companies attempting to comply with the law. This recent real-world example demonstrates how the recall system is broken:

In November 2015, my rental company was mailed 137 recall notices from Nissan about a Nissan Versa safety defect. Of the 137 notices received, I owned only 14 of the cars. That’s right, 90% of the recall notices were for Versas my company no longer owns — in many cases for years. While the 90% error rate is an extreme example, over the last two years our error rates have averaged 70% to 80%.

Since the beginning of 2014, recalls have been issued at a record pace. Conservative estimates are that one in every five vehicles registered in the U.S. is driven with open recalls.

The high error rate in the notification process begs the question: How many of these drivers are even aware of the recalls on their vehicles and the danger they pose to themselves, their passengers, and fellow motorists?

In our digital world, where complex data can be managed with amazing efficiency, we need the National Highway Traffic Safety Administration (NHTSA) to streamline notifications and create a more reliable process. Fleet owners should be notified as soon as a recall is issued. With so much on the line for public safety and our industry, a 10% to 30% notification success rate is a failure for the manufacturers and NHTSA, and by any reasonable measure simply unacceptable.

In another example of how the system is broken, in April 2015, Ford announced a recall involving a spring in the door latch mechanism on certain Fusion and Fiesta models. We immediately grounded 45 cars in our fleet covered by the recall. The recall notice said that there was no known repair and no repair parts available.

In October, after six months of grounding, our Ford dealer was authorized to start repairing the defect. Ford told the dealer to inspect the cars to see if the spring was broken. If it was broken, they were authorized to replace it. If it wasn’t broken, we would be notified to bring the cars back when more parts were available. The limited supply of parts was being reserved for cars with broken springs. It would have made more sense to announce an inspection in April instead of grounding the cars for six months just to determine the springs weren’t broken.

My company incurred about $153,000 in direct vehicle expenses and about $360,000 in lost revenue before we were able to complete the repair of all 45 cars in late December 2015.

I have been renting cars to the public since 1969. I do not ever remember having so many recalls with no known repair time and no parts available. It should not take eight months to resolve a recall on 45 cars with a potential door latch problem.

The situation I just described is just not reasonable and quite frankly not sustainable for the many small operators in our industry, including many of my own franchise owners. The loss of use of 45 cars to a 100-car operator for eight months would likely put that operator out of business.

I urge NHTSA to send representatives to the International Car Rental Show in Las Vegas in April. Our industry needs guidance on the ambiguous areas of the law, and NHTSA needs to hear directly from our industry about the problems in the current recall system and the need for common sense fixes to allow our industry to fully comply and protect the public.

About The Author

Michael DeLorenzo
Michael DeLorenzo

Michael DeLorenzo serves as the executive vice president of International Franchise Systems, which owns the NextCar, Priceless, and Rent-A-Wreck brands.

DeLorenzo will speak at the 2016 International Car Rental Show. He will be a panel speaker for the seminar, “The Recall Bill is Law — What Now?”

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.