Investigation finds Enterprise Rent-A-Car sold Chevy Impalas without standard side air bags

 
By RICK MONTGOMERY and DAN MARGOLIES
© 2009 The Kansas City Star
 
Posted on Sat, Aug. 15, 2009
 
Enterprise Rent-A-Car, the nation’s largest private buyer of new cars and seller of used ones, chose to “delete” a standard safety feature from thousands of Chevrolet Impala fleet vehicles, saving millions of dollars.
 
After the company rented out those 2006-08 model vehicles, Enterprise and countless dealers nationwide offered them for sale on the open market — minus the side-curtain air bags that have been shown to dramatically reduce highway deaths.
 
What’s more, a Kansas City Star investigation found that hundreds of Impalas already sold were incorrectly advertised on Enterprise’s Web site as having the very head-protecting feature that the rental company opted to exclude on General Motors’ factory floor.
 
“I’ve never seen a standard safety feature removed from a vehicle,” said Sean Kane, who heads Safety Research & Strategies Inc. in Rehoboth, Mass. “That’s what’s so unique about this. I’ve been doing this work for 17 years and, until now, had yet to see this happen.”
 
Enterprise officials defended their decision to delete the side air bags on roughly 66,000 Impalas as one that did not violate any federal mandate. That decision saved the company $175 on each Impala, which would total about $11.5 million.
 
But the St. Louis-based company admitted making a mistake in its online advertising.
 
“There’s definitely a glitch in the system,” Christy Conrad, Enterprise’s vice president for corporate communications, acknowledged when The Star informed Enterprise of the misleading Web postings.
 
After checking data on past sales, the company determined that 745 Impalas— model years 2006 through 2008 — sold from Enterprise’s used-car lots “were marked incorrectly, only online, as having side air bags and they did not,” Conrad said.
 
Enterprise said it will send letters to all 745 buyers, including 15 in the Kansas City area, notifying them of the problem. The company also will offer to buy back the cars, regardless of condition, at $750 above Kelley Blue Book value.
 
Not all Impalas ordered by Enterprise were built without side air bags. And Enterprise acknowledged it also purchased roughly 5,000 Chevy Cobalts and Buick LaCrosses without standard side air bags, but those cars weren’t advertised as having the safety feature.
 
A Chevrolet spokesman, Brian Goebel, said that in the highly competitive fleet market and rental-car industry, the delete option helped buyers shave costs on features they did not want.
Though standard on the Impala, side-curtain air bags that drop over windows in a side-impact crash were optional in many other vehicles at the time. By 2006, about 40 percent of new passenger vehicles offered side air bags.
 
According to the Insurance Institute for Highway Safety, an organization funded by auto insurers to research ways of reducing injuries in crashes, side impacts are the second-most common fatal accident, after frontal crashes. The institute said more than 8,000 people were killed in side-impact collisions in 2007.
 
Studies have shown that side air bags with head protection reduce highway deaths 45 percent among drivers in cars struck on the driver’s side.
 
‘Big problem for consumers’
 
Kane, an automotive safety expert who assisted The Star in its research, said he had identified at least five fatal accidents nationwide involving fleet-purchased Impalas, not all Enterprise vehicles, in side-impact crashes. However, he could not determine whether the absence of side air bags contributed to the deaths.
 
Kane was surprised by The Star’s findings and expressed concern about consumers unwittingly renting or buying a car lacking a safety feature standard for that vehicle. A spokesman for the Insurance Institute, Russ Rader, called the discovery astonishing.
 
“Fleet buyers are actually given the option to delete a safety feature that otherwise comes standard? I’ve never heard of that,” Rader said “My personal view is that the liability concern alone would raise a lot of red flags if I were an official at Enterprise, looking to purchase cars that would be rented” by unknowing customers.
 
Rader also said “this presents a big problem for consumers” who consider buying used fleet vehicles, commonly known as program cars.
 
“If you look up crash-test ratings before buying, you’ll find that the 2006-08 Impalas were rated by the Insurance Institute as ‘good’ in front-impact and side-impact tests. But that’s a test that included the side air bags. No vehicle has earned a ‘good’ rating for side-impact protection without the side air bags,” Rader said.
 
Front-impact air bags have been required for years in the steering wheels and dashboards of all new cars sold in the United States, including the Canadian-made Impala.
 
Side-impact air bags, however, are not federally required — yet.
 
The Insurance Institute said all 2010-model light-duty cars will be equipped with head-protecting air bags as part of a 2003 agreement reached between automakers and U.S. regulators.
 
Trickling through the market
 
On Enterprise’s used-car Web site, posts for dozens of 2008 Impalas offered for sale this month touted “F&R Side Air Bags,” the initials representing front and rear.
 
But the vehicle identification numbers and a spot check of GM “build sheets” — which describe all the factory-installed equipment on a vehicle — indicated the side air bags had been deleted, or not installed, when the cars were manufactured.
 
After The Star brought the discrepancy to its attention late last week, Enterprise pulled the suspect vehicles off its Web site to address what officials called a “software flaw” that contributed to the misrepresentation, Conrad said.
 
“We’ll make it right with our customers. … None of this is intentional,” she added.
 
Besides the cars sold on its lots, Enterprise has leased, sold or auctioned an unknown number of the Impalas to dealers and other fleet operators around the country.
 
But many of those dealers post ads that list side air bags among the vehicles’ standard features, The Star found.
 
Rachelle Beamer of Gardner bought one last September from an Olathe dealership.
 
“I don’t think I thought to ask if the side air bags were there,” she said when informed that her car lacked the safety devices. A “GM Certified” report included in her purchase, however, listed them: “Side head air bag” and “Rear head air bag.”
 
“That’s a problem. Those words should not have been on that piece of paper,” said Beamer, who was otherwise happy with her purchase. Records show the Impala originally was purchased by Enterprise and Beamer paid about $16,000 for it.
 
However, in small print on the certified-vehicle document is the disclaimer: “Options listed in this section are for reference only and may not represent actual installed features on this vehicle. Ask your sales consultant for details.”
 
GM said it had discontinued the fleet-buyers’ option of deleting side air bags in the 2009-model Impalas.
 
Chevy spokesman Goebel declined to specify how many Impalas were ordered without the side air bags from 2005 to 2008.
 
“Thousands,” he said, referring to vehicles bought by Enterprise, government entities and companies of all kinds that rely on fleet purchases.
 
The roughly 3,000 Impalas sold to consumers on Enterprise-owned lots, both properly and improperly advertised, represent just a fraction of the Impalas that the rental company placed on the used-car market by way of auctions and sales to outside dealers.
 
Only 8 percent of the company’s vehicles are directly sold on Enterprise lots, according to “Exceeding Customer Expectations,” a 2007 book about the company by Kirk Kazanjian. The remaining cars, once retired from the rental business, are auctioned or sold to the franchised car dealerships from which they were bought.
 
For Impalas, consumers can determine whether the auto is equipped with the head-curtain air bags if the word “AIRBAG” is printed near the interior roof between the side windows.
 
Larry Carl, executive vice president of the Automobile Dealers Association of Greater Kansas City, said that, in light of The Star’s findings, the association had advised dealers to review their used Impala inventories “and to take appropriate action if they have these specific vehicles.”
 
“While there isn’t anything inherently wrong or unsafe with these cars,” he wrote in an e-mail to The Star, “we want to ensure that the consumer is fully informed and aware of the vehicle’s equipment and features.”
 
Buyer beware
 
Donald T. Murphy, a retired Army officer from Leavenworth who bought his 2008 Impala from a used-car dealer, said he was “especially perturbed” to learn from a reporter that his vehicle lacked side air bags.
 
“When we bought the car, I was under the impression that whatever was standard would be there. … I’m not talking about a piece of chrome or something superficial — that wouldn’t bother me,” Murphy said. “But with something that’s a standard safety item, anybody should trust it’s there unless they’re explicitly informed otherwise. … It comes down to simple disclosure.”
 
Murphy found a form of disclosure when he recently checked the glove compartment. A sticker left there from the car’s original fleet purchase listed, as standard equipment, “Head Curtain Side Air Bags Front/Rear,” along with other features such as cruise control, all-season tires and a cargo net.
 
But in another column under “Options & Pricing,” the air bags were listed next to the figure “-175.00,” indicating that amount had been deducted from the standard vehicle price of $21,865 because side air bags weren’t included.
 
Enterprise isn’t the only fleet buyer that exercised the delete option on 2006-08 Impala orders. A check of vehicle identification numbers filed with the Kansas Department of Revenue showed fleets of Impalas also were ordered by area colleges, school districts and municipalities.
 
It is not clear how many other car rental companies ordered Impalas without air bags. In its analysis of rental cars advertised for sale online, The Star found one lacking the side air bags to have been originally bought by Vanguard Car Rental USA Inc. — a company that Enterprise acquired soon after.
At least one competing rental agency, Hertz, said it does not delete safety features.
 
“We have never requested the elimination or reduction of safety features in order to save money,” Hertz spokeswoman Paula Rivera said. “Our renters’ safety is top of mind.”
 
Check the build sheet
 
The Star recently rented a 2008 Impala from a local Enterprise outlet, where a salesman described the vehicle as “your standard, basic Impala” but did not mention the deletion of the side air bags.
A Kansas City-area service manager for an authorized Chevrolet dealer, who asked not to be identified, agreed to inspect The Star’s rental and concluded: “There is no way this car has side air bags.”
 
He said the seventh digit of the vehicle identification number, marked “5,” indicated the car’s restraint system was limited to the mandatory front passenger and driver air bags.
 
Certified technicians for the automakers can type vehicle identification numbers into a computer to access a vehicle’s build sheet. Indeed, Chevy spokesman Goebel recommended that fleet-car shoppers request those build sheets to be certain which items have been included or omitted from a vehicle.
 
Clarence Ditlow, the executive director of the Center for Auto Safety, an advocacy group, said: “Enterprise seems to have acted swiftly” in offering to buy back some of the cars purchased on its own lots. But he added that the decision won’t benefit the thousands of other consumers who bought their fleet Impalas from other sellers.
 
Those consumers include Beamer, who noted, “I guess if you didn’t buy directly from Enterprise, it’s like, forget you.”
 
Beamer said she used to give little thought to what might happen if she were to have an accident while driving her children to school. That was before she learned her car lacked standard air bags.
“Now it would be nice to have them there,” Beamer said.

HOW TO CRACK THE CODE ON AIR BAGS

So you bought a used 2006, 2007 or 2008 Impala. How can you be sure it has the standard side air bags?
 
•Near the interior roof, the word “AIRBAG” should be stamped in a space between the side windows. If it’s not there, neither are the air bags.
•Your dealer will know whether the car originally was part of a fleet purchase, or what is commonly called a program car. General Motors allowed only fleet buyers the option to delete the side air bags.
•Ask a certified GM technician to show you the vehicle’s build sheet. If the term “AK5 – Delete” appears on the sheet, the side air bags were not installed.
•Check the vehicle identification number just below the windshield on the driver’s side. If the seventh digit is 5, your Impala has the required front-impact air bags, but probably nothing on the sides.
The Star’s Chad Day contributed to this report. To reach Rick Montgomery, call 816-234-4410 or send e-mail to rmontgomery@kcstar.com. To reach Dan Margolies, call 816-234-4481 or send e-mail to dmargolies@kcstar.com. | Rick Montgomery, rmontgomery@kcstar.com

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