The saying that “age is just a number” can ring true in a lot of life’s situations. But how does age play a part in motor vehicle laws, and how does this affect car rental?

In November 2011, a motorcyclist was sideswiped in New York by a 90-year-old woman who was driving a rental. The motorcyclist attempted to sue the woman and the rental company on the grounds that the rental company was negligent in renting to a 90-year-old. In this circumstance, could a negligent entrustment argument be made by showing that the renter was simply “too old”?

Those who attempt to sue for negligence for renting to senior drivers may try to use statistics to further their argument: According to the National Highway Traffic Safety Administration’s (NHTSA) National Center for Statistics and Analysis, in 2009, the fatality rate in traffic accidents for 80- to 84-year-olds was almost 18 per 100,000 people, which is the second-highest rate compared to all other age categories, just behind 16- to 20-year-olds. (Click charts to enlarge.) 

Source: NHTSA
These traffic death statistics show that 16- to 20-year-olds have the highest rate of fatalities in traffic accidents over the last decade. In 2009, 80- to 84-year-olds had the second highest, and 85 and over had the third most traffic fatalities.

Source: NHTSA

These traffic death statistics show that 16- to 20-year-olds have the highest rate of fatalities in traffic accidents over the last decade. In 2009, 80- to 84-year-olds had the second highest, and 85 and over had the third most traffic fatalities.

Elderly Drivers and Risk
But are elderly drivers really unsafe? Statistics reveal that seniors do have a higher risk of not surviving an accident, as shown in the NHTSA accident fatality rate data. However, “driver involvement” rates in fatal crashes show that drivers over the age of 65 have some of the lowest involvement rates; while 21- to 24-year-olds have the highest.

Breaking down the statistics further, the involvement rate of drivers 85 years and above is about par with the average middle-aged driver. And in looking at the statistics by sex, female drivers above 65 have significantly fewer crashes than males. The same is true for female drivers across all age categories.

Source: NHTSA
Driver involvement statistics look at the age of the driver involved in a traffic accident, but do not distinguish as to who caused the accident. In separating males and females at all ages, female drivers are clearly involved in fewer collisions.

Source: NHTSA

Driver involvement statistics look at the age of the driver involved in a traffic accident, but do not distinguish as to who caused the accident. In separating males and females at all ages, female drivers are clearly involved in fewer collisions.

Moreover, according to the NHTSA, drivers 65 and older tend to be involved in fewer alcohol-related, speed-related and nighttime-related accidents compared to any other age group. As well, a 2010 NHTSA report shows a closer accident correlation with health risks associated with getting older, such as poor vision, and not necessarily with age itself.

Court Rulings
A lawsuit in the New York motorcyclist case would have had a clearer path to victory under the doctrine of vicarious liability. However, the Graves Amendment, passed in 2005, prohibits states from imposing vicarious liability onto non-negligent rental and leasing companies. The motorcyclist was left trying to prove actual negligence instead, and a lawsuit was never filed.

Before a case could be made, the state’s Department of Motor Vehicles ruled that the rental car company broke no laws because the woman’s driver’s license was valid and current. And besides, the woman had an impeccable driving record.

In looking at court cases addressing age in association with risk in driving a rental, it’s clear that a court would side with the DMV.

For example, in Drummond v. Walker in 1986, a U.S. Federal District Court said that the rental company’s knowledge that the driver was under the age of 21 was not sufficient to establish a case of negligent entrustment. “So in other words, there has got to be more than just a person’s age — there has to be some kind of evidence that they (the rental company) knew the person was unable to safely drive the car,” says Sue Bendavid, a California employment attorney and business litigation lawyer for Lewitt, Hackman in Encino, Calif.[PAGEBREAK]

Photo: ©istockphoto.com/dszc

Photo: ©istockphoto.com/dszc

More recent cases have reiterated the Drummond v. Walker case. In Cowan v. Jack in 2005, a Louisiana Court of Appeals said that the rental car company had every right to rent to a 20-year-old who had a facially valid license, saying that age cannot be used as the sole basis for establishing his incompetence.

And in at least one attempt to take a car rental company to court for renting to an older driver, in a 2006 suit in Tennessee, Enterprise Rent-A-Car was dismissed as a defendant for renting to a 74-year-old after the plaintiff motioned to release Enterprise as a defendant in the case.

What’s the Law?
Laws governing age restrictions depend on which state you’re in. New York is the only state that directly prevents rental companies through state legislation from “discriminating against drivers 18 and over solely based on age,” and the fine for doing so is “not to exceed $500.” Car rental companies in the state are, however, able to impose a surcharge on younger renters.

Michigan also says that rental car companies must rent to drivers 18 and over. This inclusion came after a 2000 lawsuit, in which a state court said in Bickham v. Hertz Rent-A-Car that the rental car company must comply with the state’s Elliott-Larsen Civil Rights Act, which prohibits discrimination based on age, religion, national origin, sex, etc. in public accommodations or services, housing, education and employment.

Most other states, such as California, Wisconsin and Maine, have language in state statutes regarding auto insurance in rental, stating that an “authorized driver” must meet a rental company’s “minimum age requirement,” thus recognizing that it’s OK for companies to set minimum age requirements. However, no mention is made that an authorized driver must be under a maximum age or any other age requirements.

In California, “The Legislature has spoken based on [Civil Code 1936] that rental car companies can have restrictions on younger drivers — because of the statistics frankly — but there is nothing in there that permits them to have restrictions against older drivers,” Bendavid says.

This legislative language has also played a hand in court cases involving potential age discrimination in car rental. In Lazar v. Hertz in 1999, Adam Lazar filed a class-action suit in California against the company for its policy to not rent to customers under the age of 25 without a differential charge. Lazar argued that the minimum age to rent a vehicle must be “reasonable.”

The court ruled, among other reasons, that because the word “reasonable” wasn’t in the California statute that it could not interpret that the statute meant something “other than what it said,” adding that the court has no authority to rewrite a state statute. “The omission of the term ‘reasonable’ thus appears to indicate an intent (by the Legislature) not to impose a reasonable requirement in the minimum age provision,” the court opinion states.

And in regards to potential age discrimination in Lazar v. Hertz, the court said that businesses retain the right under the Unruh Act, which bans discrimination in business in California, to establish prudent business practices related to the services performed. The court said that these practices,  which can include age restrictions, are “reasonably related to the operation of that business.”[PAGEBREAK]

Even further, as industry consultant Jim Tennant of The Tennant Group says, car rental companies have many requirements that go beyond state statutes. For example, he cited that there’s no law requiring the use of a major credit card to rent a vehicle; however, many companies ask for a credit card in the renter’s name. “It’s just a rental requirement,” Tennant says, adding that if companies only practiced what state legislation outlines, “You would be out of business in a week.”

Best Practices
So while courts and legislatures have spoken on age discrimination, cases for negligent entrustment still surface. Tennant notes that when a car rental company is found negligent, it’s often due to procedural errors and not because of actual policy issues.

So to help protect your rental operation from a negligence claim, here are some guidelines to follow:

1. For customers having difficulty understanding instructions, take extra time with them at the car. Drive around the block once with them to make sure they are familiar with the vehicle — especially with today’s in-vehicle technology and plethora of bells and whistles.

2. See if the customer is familiar with the area. Make sure customers know how to get to their next destination, and if there’s GPS in the vehicle, be sure to show them how to use it. 


3. Remind employees that it’s OK to say “no.” Your employees know not to rent to someone smelling of alcohol, but it’s also permissible to refuse to rent to someone who tells you that they haven’t slept in several days, or to someone who doesn’t seem to understand directions or has difficulty seeing.

4. Keep surcharge amounts reasonable. If implementing a surcharge on younger drivers, be sure you can prove that your age-related surcharge is not just a profit center. Your surcharge should essentially cover the increased insurance cost to you for renting to a younger driver, and that will vary by state.

5. With online reservations, properly disclose your age restriction policy. Include this disclaimer clearly during the reservation and in advertisements.

6. Be consistent. Whatever your procedures are, do it the same way, every time. If you do background checks, for example, don’t only run licenses for renters that seem like they might have a checkered background. “I have my employees look at every person the same way,” says Kristopher Tucci, owner of a Thrifty & Dollar franchise in Syracuse, N.Y. Tucci performs a driver’s license check for every renter — except for corporate accounts — from states that have this information available. “We get middle-aged drivers to senior citizens that have issues with their driving records,” he says. “Age is not a factor.”

7. Document everything. If you refuse to rent to a customer, for whatever the reason, let your associate take a few minutes immediately after the incident to record what happened during the transaction and each reason as to why you ended up refusing to rent to the customer.

8. If you refuse to rent to a customer because they don’t meet your age requirements, help the customer find the nearest rental car company that will rent to them.[PAGEBREAK]

The bottom line is to go with your gut. Tucci says that he has no problem refusing to rent to someone who is clearly an at-risk driver as according to their driving record. “I’m not in the business to turn people down — I’m not going to generate revenue that way,” he says. “But at the same time, I have to protect my investment and my employees who need a job, and I’m not going to put that at risk for a one- or two-day rental.” Running driver checks isn’t cheap, though. Tucci says he spends $2,000-$3,000 per month to run licenses.

Sharon Faulkner, executive director of the American Car Rental Association, remembers in her days as an operator an incident in which she wished she had listened to her intuition. Faulkner rented to an older man who seemed to have difficulty understanding directions at the counter. And while she spent extra time with going over the vehicle, once she handed him the keys he made a left turn into traffic and was T-boned — right out of the rental lot.

“I really regret that I didn’t listen to myself and say ‘he seems distracted’ and really isn’t responding well to the questions I ask him. I should’ve turned him away,” she says. “So I learned a lesson that sometimes you have to bite the bullet and be embarrassed and risk having someone hate you, yell at you and scream at you, because — of course — you’ve hurt their sensibilities.” 

A Sample of Age Policies
These are extractions of partial stated age restriction policies from major car rental companies, with company name replaced by "RAC."

“The primary renter of the vehicle must be 25 years of age, or for select corporate contracts and international tour accounts, the minimum age is 21.”

“Certain specialty and larger sized vehicles may not be rented to younger drivers.”

“Some locations maintain maximum age limits.”

“RAC reserves the right to refuse rental of a vehicle if the renter demonstrates inability to handle road rules and conditions.”

“18 years of age is the minimum for military or government personnel traveling on official orders under government rates. Government or military leisure travel though is 21 years old, and rate may be higher for under age 25. (U.S. only.)”

“New York State:  The minimum age for N.Y. is 18 years of age.  An $80.00 per day additional charge applies to 18-20 aged renters and a $23.50 per day additional charge applies to 21-24 aged renters.”

“In New York State the minimum age to rent is 18 with a $52 per day surcharge for renters age 18-20 and a $35-per-day underage surcharge for renters age 21-24.”

“Michigan will continue to have a minimum age of 18 with a $41-per-day surcharge for customers between the ages of 18-20 and $28-per-day surcharge for customers between the ages of 21-24.”

“All RAC locations rent to drivers at least 25 years of age. Most RAC locations rent to younger drivers age 21-24, and some locations rent to drivers under age 21.  There is usually an extra charge for drivers under age 25, which varies by location as identified in the Local Policy Details section of the Rate Details page.”

“RAC rents to customers between the ages of 21-24 with a valid credit card and driver’s license.  At time of rental, we will automatically apply an additional $27-per-day underage surcharge in the U.S. and $35 per day in Canada for these drivers. (See exceptions.)”

“Renters between the ages of 21-24 may not rent vehicles in the following car classes: Luxury, Specialty, Minivans, Passenger Vans, Full-Size SUVs, Premium SUVs.”

“At corporate-operated locations, RAC does not have a maximum age limit in the U.S., but there may be upper-age restrictions in some other countries.”

“The minimum age to rent a vehicle at most RAC locations in the United States and Canada is 21 years of age. Please refer to the Terms and Conditions for specific information on driver ages at the location where you intend to rent and the applicable charge for drivers 21 to 24 years of age.”

“Renter must be 25 years of age unless specified otherwise in specific location’s policy.  Where applicable by law, locations will charge an underage fee. Please refer to individual location policy.”

For another recent article on negligent entrustment in the auto rental industry, click here.

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