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Revving Up: What Price Safety?

The fleet-only option to buy vehicles without standard side-impact airbags highlights the deficiencies in the disclosure of deleted safety items in the buying and selling process.

September 2009, by - Also by this author

Enterprise Rent A Car bought 66,000 Chevy Impalas and used a "fleet-delete" option to remove side-impact airbags, a standard feature for consumers. To compound the matter, Enterprise sold hundreds of those used rental units advertised as having standard equipment, which includes the side-impact airbags.

Enterprise maintains they did not know the cars were being sold out of fleet without the disclosure that the side-impact airbags had been removed. Enterprise characterized the mistake as a "glitch in the system." Though it's no excuse, the error is believable, knowing how the information handoff between buyers and sellers in the same company is not always set up to catch every anomaly.

Enterprise -- which is completely within the law here -- is taking swift action on a make-good. The company is informing the 745 people who bought those airbag-less units from its used car lots that Enterprise will buy back the cars at $750 above book value, regardless of condition. General Motors is contacting its dealers to track down the units Enterprise sold to them.

This option to delete side-impact airbags was offered not only to rental fleets, but to commercial and government fleets as well. While GM no longer offers this option, how many used units are out there in which the side-impact airbags were not installed? And are sellers notifying buyers of the deletion of this otherwise standard equipment? 

Slipping Through Unnoticed

Unlike typical, visible fleet-delete options such as power windows, seats and mirrors, the unseen side-impact airbag slips past the wholesale valuation, in the guides and in the lanes.

An auctioneer from Adesa says he has not seen a fleet-delete item being the subject of specific disclosure on the auction block. Neither Black Book nor NADA Guides have a specific valuation for a side-impact airbag delete. Kelley Blue Book says only that "there is a way to configure a vehicle and price it without standard equipment."

Save for ripping apart the car, there are a few ways to identify if the car you're looking at has a side-impact airbag: One is the numeral designation on the seventh VIN number. Another is an "SRS airbag" logo stamped on the A or B pillar. Also, on GM vehicles, the manufacturer affixes an RPO (Regular Production Option) label in the trunk or glove box that consists of a series of numbers and letters.

However, would a buyer think to check if this "standard" vehicle was built without a side-impact airbag upon inspection at auction? On a used car lot, would the salesperson point out to the buyer that a particular unit was missing a side-impact airbag?

For certified vehicle sales, used car sellers are protected to an extent by small print on the disclaimer that says "options listed may not represent actual installed features." But that still does not identify that a specific item was removed. Is that disclaimer a sufficient liability protection for a seller should an injury and lawsuit follow? How widespread is that disclaimer, outside of certified, pre-owned inspections?

The Need for Disclosure

Fleet purchasers have a responsibility to their companies to keep fleet costs as low as possible. With today's cost pressures, that task is monumental. We applaud those who do it well. Enterprise's decision saved the company $175 on each airbag, or $11.5 million overall.

In terms of deleting safety equipment from a purchase, those buyers obviously made a risk assessment in the potential savings. According to Insurance Institute for Highway Safety (IIHS), side-impact crashes killed about 8,225 Americans in 2007. IIHS says side-impact restraint systems reduce fatality risks by 37 to 52 percent, depending on the vehicle. In its side-impact crash evaluations, "very few" cars without side-impact airbags did better than marginal or poor.

Luckily, this is becoming a moot point: The National Highway Traffic Safety Administration (NHTSA) has mandated that all automakers must phase in additional side-impact protection as a standard feature within four years.

But here is one last question for those fleets that chose to delete the side-impact airbags: Do your drivers know you chose to buy the car without them? When it comes time to sell, will you tell the new buyers?

There are thousands of people who will be driving those vehicles for many years. I hope those drivers know. BF


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