Automotive Recyclers Association Commends Governor Bush's Closure of 'Flood Vehicle' Loophole
22 August 2000
Automotive Recyclers Association Commends Governor Bush's Closure of 'Flood Vehicle' Loophole
New Law Goes a Long Way to Help Protect Consumers
FAIRFAX, Va., Aug. 22 The Automotive Recyclers Association
(ARA), representing the professional automotive recycler, applauds strong new
legislation passed in the state of Florida and signed by Governor Jeb Bush
(R-FL).
The legislation authored by state legislator Jim Fuller (R-Jacksonville)
spotlights serious nationwide problems associated with vehicle titling, which
are in fact subjects of legislation pending in the U.S. Congress. The Fuller
measure applies a new enforcement technique to the existing percentage-based
definition of "unrebuildable vehicles," thereby making it more difficult for
unscrupulous dealers to sell these often-dangerous vehicles to unsuspecting
consumers and helping to prevent thieves from masking the identities of stolen
vehicles.
Starting October 1, 2000, a "Certificate of Destruction" will be issued by
the Florida Department of Motor Vehicles -- and "dismantling or destruction
... shall be required" -- for any vehicle whose estimated costs of repairing
physical and mechanical damage is equal to 80 percent or more of the current
retail cost of the vehicle. Key to the effectiveness of this provision is
that the "Certificate of Destruction" is not considered negotiable title
paperwork and thus should not be recognized by Department of Motor Vehicles in
other states.
In the past, Florida issued "unrebuildable" titles for these vehicles
(which applied to many damaged during hurricanes such as Floyd and Opal). By
retitling these vehicles in other states that did not recognize the
"unrebuildable" brand, unscrupulous rebuilders could "launder" or "wash" the
brand away, and then resell the dangerous vehicles to unsuspecting consumers
for use on the roads and highways again. The revised "Certificate of
Destruction" is intended to stop this heinous practice for Florida vehicles.
The new Certificates of Destruction help combat another type of fraud
called vehicle identification number (VIN) switching. Everyday throughout
America vehicles destroyed beyond safe repair are sold at salvage auctions for
substantial prices to thieves who want only the title paperwork and VIN
numbers so they can use them on vehicles they do not want to be identifiable
as stolen.
Theft rings of organized crime have used this technique for enormous
profits through free trade in higher-end VIN-switched vehicles sellable in
other countries at several times U.S. values. This sophisticated
international "business" has led recovery rates of U.S. stolen vehicles to
plummet from 95 percent ten years ago to as low as 60 percent today. An added
benefit of the new Florida law is that the Florida Port Authority will
recognize the "Certificate of Destruction" designation -- thus assisting
officials to verify the validity of both vehicle and supporting documentation
before leaving the United States.
"This new legislation is really a step in the right direction" said ARA
Executive Vice President Bill Steinkuller. "It goes a long way in protecting
the consumer, by closing loopholes in state and national laws that
inadvertently help perpetuate these types of fraud".
Mr. Steinkuller also noted that the only viable titling legislation
pending in the U.S. Congress at present does have a mechanism similar to
Florida's Certificate of Destruction. However, this bill has not yet been
amended to include the percentage-based definition that is necessary as a
practical matter to trigger the mechanism into action.
Founded in 1943, the Automotive Recyclers Association (ARA) has
represented an industry dedicated to the efficient removal and reuse of
automotive parts, and the proper disposal of inoperable motor vehicles. With
programs such as the Certified Auto Recycler program (CAR) and working
relationships with automotive manufacturers, automotive recycling will
continue to provide consumers with quality, low cost alternatives for vehicle
replacement parts, while preserving our environment for tomorrow.
To learn more, visit ARA's Home Page at http://www.autorecyc.org or call
703-385-1001.