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Used-Car Salvage Bill Protects Consumers, Dealers

3 September 1998

Used-Car Salvage Bill Protects Consumers, Dealers, NADA Says

    WASHINGTON, Sept. 3 -- The U.S. Senate must act quickly to
close gaps in state vehicle salvage laws that allow unscrupulous automobile
rebuilders to bilk consumers and the auto industry out of $4 billion annually,
according to the National Automobile Dealers Association.
    The National Salvage Motor Vehicle Consumer Protection Act, (S.852), would
encourage states to adopt a national uniform definition of salvaged vehicles.
It is estimated that more than 1 million totaled vehicles are rebuilt and
placed back on the nation's highways each year.  States currently have
inconsistent vehicle salvage laws that allow dishonest rebuilders to obtain
"clean" titles on substantially damaged vehicles that can then be sold in any
state as undamaged.

    This bill will help curtail the growing problem of fraud against consumers
and dealers for the following reasons:
    * The bill would limit the ability of dishonest rebuilders to "wash"
titles by encouraging a nationally consistent definition for salvage vehicles.
    * Any vehicle "totaled" by an insurance company or that has damage
exceeding 75 percent of its pre-accident value would be branded as a "salvaged
vehicle" on its title.
    * The bill specifically preserves state causes of action and remedies
available to consumers who fall victim to salvaged-vehicle fraud.
    * The bill allows the states to require disclosure of information about
vehicle damage less than the national threshold for a salvaged vehicle.

    The Senate version was introduced by Senators Trent Lott (R-Miss) and
Wendell Ford (D-Ky) and is co-sponsored by a bipartisan group of more than 50
senators.  The House of Representatives overwhelmingly approved a companion
bill (H.R. 1839) last November.
    "We urge Congress to rise above partisan politics and misleading rhetoric
from so-called consumer groups and pass this important pro-consumer and pro-
business legislation," said NADA Chairman Paul J. Holloway.  "The status quo
is only serving dishonest vehicle rebuilders at the expense of consumers and
auto dealers."
    The National Automobile Dealers Association represents more than 19,500
franchised new-car and -truck dealers holding nearly 40,000 separate
franchises, domestic and import.