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Feinstein/Levin Vehicle Salvage Bill Onerous and Unworkable, NADA Says

29 March 1999

Feinstein/Levin Vehicle Salvage Bill Onerous and Unworkable, NADA Says

    WASHINGTON, March 29 -- The National Automobile Dealers
Association said today it supports the salvage vehicle fraud prevention
legislation introduced by Senate Majority Leader Trent Lott (R-Miss.) and will
oppose an "unworkable and onerous" alternative bill proposed by Sens.
Feinstein (D-Calif.) and Levin (D-Mich.).
    "Sen. Lott has put forth an effective solution to the problem of the
fraudulent undisclosed sale of salvaged vehicles," said NADA Chairman James A.
Willingham. "The Feinstein/Levin bill undermines the effort to curb fraud by
creating a quagmire of unworkable and onerous regulations."
    Currently, states use a variety of definitions and title notations (or
"brands") to designate vehicles as salvage. Unscrupulous rebuilders manipulate
inconsistent state laws to "wash" salvaged vehicle titles by obtaining "clean"
titles from states with weak or differing regulations. These vehicles are then
typically sold to unsuspecting consumers and dealers without any disclosure of
their repair history.
    NADA believes Lott's bill (the National Salvage Motor Vehicle Consumer
Protection Act, S. 655) is an important first step in closing loopholes
created by the patchwork of state laws governing salvaged vehicles. The bill
would set streamlined national salvage vehicle titling guidelines, while
preserving the flexibility for states to set even stricter standards.
    The consumer groups' cumbersome alternative, introduced by Feinstein and
Levin, mandates that every person selling a vehicle must attach to the title a
signed form disclosing whether a vehicle has ever suffered major damage. Major
damage can be as little as $3,000 worth of repairs. Unless the complex
paperwork is completed, the bill prohibits a state DMV from registering a
vehicle for use on public roads. Additionally, the bill would impose on state
courts a new Federal cause of action which would encourage costly, frivolous
litigation. This provision would create a private civil action with damages
equal to the greater of three times actual damages or $5,000.
    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.