Driver Safety Put at Risk for $175, Car Resale Values Tank

September 23rd, 2010. By LucyC

From time to time, we here at Lawyers and Settlements focus on some of the more bizarre class action settlements making their way through the courts. Looks like Enterprise car rentals side airbags class action is destined for the “are you kidding?” category.

The back story—Enterprise Holdings Inc, is being sued in a class action by more than 100,000 people who bought certain Chevy and Buick model vehicles from the company that did not have side curtain airbags. FYI—those are the airbags that are meant to protect your head in a crash. (question—why would a manufacturer make those optional?)

The deal was that for the past three years Enterprise has ordered new vehicles, mostly Chevrolet Impalas, according to the dallasnews.com, without the airbags that would normally come standard, thereby saving about $175 per car. According to the paper, an investigation by McClatchy Newspapers in 2009, “revealed that General Motors Co. allowed Enterprise and other large fleet buyers to “delete” side airbags on the factory floor. Enterprise acknowledged taking advantage of the $175 discount on more than 60,000 Impalas over a three-year period, but not on all Impalas it ordered.”

This “some but not all” situation has caused great confusion in the used car market, not surprisingly. Many dealers are mistakenly advertising the cars as having side front and rear airbags, because the cars, frequently acquired at auctions or as trade-ins, automatically get listed with the standard features.

Let’s face it, buying a car without the side curtain airbag is not a savings if you have an accident. And if you bought one of the affected cars—model years 2006-08 Impalas and some Chevrolet Cobalts, HHRs and Buick LaCrosses once belonging to Enterprise’s fleet—you could have difficulty trying to sell it.

Enter the lawsuit. Now Enterprise has agreed to a $14 million settlement, and as part of the terms of the settlement is has also agreed to send out yellow stickers that warn “No Side Curtain Airbags.” Great. That should make re-selling your discount car a snap.

But Sean Kane, a safety advocate with the auto-safety watchdog organization Safety Research and Strategies said that the stickers are necessary to “brand” the affected cars as those lacking a standard safety feature. Just a note here—the affected vehicles don’t actually state that they have side curtain airbags—apparently. While Kane admits that the sticker thing is less than ideal, he said the overriding concern was that the affected cars would end up in the marketplace for years to come and people would just assume, as the current owners did, that they do have the side airbags—as one of the standard features.

As for the monetary part of the settlement, one of the attorneys representing the class estimates there are roughly 130,000 eligible plaintiffs, who each stand to receive vouchers for $100, if the settlement is approved. Eligible, by the way, means people who purchased vehicles directly from Enterprise or from a dealer who acquired the cars at auction.

$100 per plaintiff. Um. That should help cover the cost of a trip to the emergency room.

The dallasnews.com interviewed a couple in Kansas City who have one of the affected Chevrolet Impalas. Connie Wittkopp said her husband refuses to drive the car. And Rodney is paranoid with good reason. Just weeks before the couple bought their Impala, he was reportedly in serious car accident in their Mercury Grand Marquis. He was recovering from six broken ribs when a salesman at a local Enterprise lot made the successful pitch—they bought the Impala for $13,669. Are you kidding?

This lawsuit is not settled yet. A final hearing is scheduled for November. But I’m left wondering if other car manufacturers offered similar discounts to large car rental firms, and what other “large fleet buyers” deleted side airbags on the factory floor—and so took advantage of GM’s offer? And if there are other firms involved, who are they?

FYI—The suit covers the 2006, 2007, and 2008 Chevrolet Impala; the 2008 and 2009 Chevrolet Cobalt; the 2009 Chevrolet Heritage High Roof (HHR); and the 2006 and 2007 Buick Lacrosse. Side airbags were standard equipment on the Impala only; they remained optional on the other models. (Source: consumeraffairs.com)

Tags: Airbags, Cobalt, Enterprise, Enterprise Car Rental, Impala, Lacrosse

This was posted on Thursday, September 23rd, 2010 at 2:42 pm and is filed under Automotive, Class Action, Emerging Issues . Feel free to respond, or trackback. Read our comments policy.