What can happen when a rental car company fails to perform safety recalls can be tragic. Two sisters rented an Enterprise rental car that caught fire in the engine and then collided with a tractor-trailer. Enterprise admitted in a California court its failure to fix a Chrysler PT Cruiser was responsible for the deaths when the car crashed. A jury awarded $15 million in damages.

Consumers for Auto Reliability and Safety of Sacramento and the Center for Auto Safety of Washington, DC filed the request this week. Carol Houck, the mother of the two women who died, joined in the petition. Ms. Houck said she wanted the F.T.C. “to order that any safety recall not be discretionary,” adding: “They have to be pulled from the lot and fixed. It is not rocket science.”

Enterprise Rent-A-Car, Alamo and National Car Rental are each part of Enterprise Holdings, that has more than a third of all airport business in the U.S.

The complaint alleges that Honda breached its factory warranty in violation of the California lemon law by failing to repair or replace the faulty engines. The complaint asks for the remedies as allowed by various consumer protection laws.

The extended warranty will cover the transmission and the electronic control module for 10 years or 150,000 miles (whichever comes first).

Owners who wishe to be reimbursed should send the repair bill, proof of payment and proof of ownership at the time of the repair to Toyota Motor Sales, Customer Experience Center (WC-10) 19001 South Western Avenue, Torrance, Calif., 90509.

Christopher Jensen has more details in his article on the NY Times Wheels blog.

As reported in the Colorado Sentinel newspaper, Fortney paid bribes of $100 to $500 to insurance adjusters with Colorado Casualty Insurance Company so he could buy salvaged vehicles. After repairs, the dealer sold the cars with clean titles. The insurance company repoted the scheme to the prosecutor and bought back 52 vehicles with fraudulent titles. Two adjustors were fined and put on probation.

Dealers often sell contracts administered by third parties whose main role is to deny expensive claims. The fine print in the service contracts provides unreasonable conditions, which, if not met, lead to the administrator denying coverage. One favorite is that there is no coverage for defects that manifest in the first 30 days or 3,000 miles of ownership. Another is a requirement to change oil and transmission fluid more often than what is recommended by the manufacturer.

From what my clients have reported to me, the manufacturers' service plans such as the GM Protection Plan do not use dishonest tactics to deny claims, but given how reliable cars are today, the plans are probably not a good investment. Consumer Reports concurs on that point.

According to the Wall Street Journal Consumers Digest typically asks auto makers $35,000 for the first award and $25,000 for each subsequent award.

J.D. Power & Associates announces quality awards based on surveys of thousands of new-car owners and auto makers pay as much as $300,000 for copies of a survey and the same amount to use the awards in ads. J.D. Power makes up enough awards in narrow categories (like best quality in first 30 days of ownership) so every auto maker gets awards thus maximizing income. The company's financial ties to the industry mean its reports are as meaningless as those of Consumers Digest.

Clarence Ditlow, director of the Center for Auto Safety said "When they start taking money from car companies, there is a conflict of interest,"

Republican Sen Brownback has an amendment to exempt the car dealers. In opposing the amendment, consumer advocates point out that car dealers often take advantage of consumers in setting the terms of leases and purchases. Dealers, for example, sell cars only to later demand an additional down payment to complete the deal.

The Pentagon supports the bill because low-income military people are often victimized by shady car dealers that set up shop just outside many bases.

Key congressional committees are working on new laws that would strengthen auto safety. Under the bills being considered, all new cars must have brake override mechanisms to stop the cars even when the accelerator is engaged and the cars must have black boxes to record data just before and after a crash.

The federal safety agency administrator is proposing that Congress give the agency the ability to order immediate recalls if consumers are in danger. Currently, a federally required recall is a lengthy and cumbersome process, meaning virtually all recalls are voluntary actions by the carmakers.

Concurrently, Sen Barbara Boxer has introduced a bill that would bar federal safety agency employees who go to work for auto manufacturers from lobbying the agency for at least three years. Late last year, Toyota employees, who recently worked for the agency, successfully lobbied the agency to narrow the scope of a recall.

The NY TImes does its usual fine job of covering these developments: http://www.nytimes.com/2010/05/07/business/07auto.html?pagewanted=1&hp

One problem is that each car manufacturer considers its code proprietary ruling out collaborative efforts to improve the safety of the computerized controls on each manufacturer's code.

Not surprisingly, according to Mr Sawant, his wife "doesn't want to buy any car," not even a Mercedes."

Mr. Rockefeller, the Senate Commerce Committee chairman, suggested that some of Toyota's problems could have been prevented if its vehicles had been equipped with "smart pedal" technology. Toyota is moving to install the system in some current models and most new vehicles.