How the GAO Auto Recall Report Could Affect Auto Rental

The issue of recalls seems to have snowballed beyond the bounds of car rental and fleets. The Government Accountability Office (GAO) is on the recall case, having just issued a report that takes the National Highway Traffic Safety Administration (NHTSA) to task for the overall low repair rate of recalled vehicles.

The GAO report recommends that:

• the word "urgent" should be added to recall letters in large type to get readers' attention, and the VIN of the recalled vehicle should be included so it is clear that the letter pertains to the owner's current vehicle.
• 
  NHTSA creates a VIN search function on www.safercar.gov and publicizes the Web site to vehicle owners and the public.
• NHTSA develops a plan to use the data it collects on recall campaigns to analyze particular patterns or trends that may characterize successful recalls and determine whether these represent best practices that could be used in other recall campaigns.
• NHTSA seeks legislative authority to ensure that potential buyers of used cars are notified of any outstanding recalls prior to sale.

Interestingly, the report does not make recommendations to NHTSA whether it should take action specific to car rental companies, nor does it tell car rental companies how to handle its recalled vehicles.

The report does relay the GAO's discussion with car rental companies, who "... stated that a better indication of the severity of the recall would help them determine how to treat recalled vehicles in their fleets and reduce confusion."

However, getting NHTSA onboard has been, and will be, an uphill battle. NHTSA "... believes that adding content to the notification letters could be distracting and that the fundamental information ... is covered by the current requirements," the report states. Further, "NHTSA officials told us that the agency has recommended to the rental car companies that they should not rent recalled vehicles until the defect has been repaired."

But here's where it gets interesting: The GAO organized 10 focus groups of vehicle owners in different cities to determine their awareness of auto safety recalls, their willingness to comply with the recalls and ways to improve safety recall notification letters.

Among other things, focus group participants reported that "they ... may be more likely to comply if the letters included the VIN number and clarified the severity of the defect."

Exactly! Clarify the severity of the defect. This mirrors what the American Car Rental Association has been advocating for months.

On top of that, the report points out that "... NHTSA has the ability to add requirements to the defect notification letters." While NHTSA feels its letter system is adequate, the GAO report suggests otherwise. This could open the door for wording that characterizes the nature of the recall.

While NHTSA has stated its resistance, the fact that another government agency has issued a report with recommendations for change could help the car rental industry's case with legislators. Now, it's not just the car rental industry calling for clarification, it's the "real people" who made up the focus group. It's constituents.

The report shows that the public has real issues with the way recalls are carried out. And it shows that NHTSA is not the be-all, end-all authority-its practices have been and should be vetted by other government agencies.

The report falls short of recommending a two-tiered system or addressing recalls by severity, as the focus groups recommend. But, at the very least, the GAO report should show legislators looking to push through recall bills that the issue is much more complicated than banning all unfixed recalled vehicles from the road.

Originally posted on Business Fleet