NADA Proposing Steps to Protect Consumers from Purchasing Damaged Vehicles Following Storms

The National Automobile Dealers Association (NADA) has proposed a series of steps to protect consumers from purchasing flood and salvage vehicles, in testimony before a U.S. Senate subcommittee.

Virginia Automobile Dealers Association President Don Hall, testifying on behalf of NADA, said transparency, timeliness and technology are essential to provide consumers more complete and current vehicle title history. He spoke before the Consumer Affairs, Product Safety and Insurance Subcommittee of the Senate Commerce Committee on Wednesday.

“The complicated 51-jurisdiction state motor vehicle titling systems invites fraud,” said Hall, noting that unscrupulous rebuilders or refurbishers can obtain a “clean” or “washed” title in a state with weak title disclosure rules. “Any buyer should have pre-purchase access to information about significant vehicle damage that may affect safety, drivability, durability and market value,” he added.

“All states should ‘carry forward’ prior brands when issuing new titles and states should brand registrations, as well as titles,” Hall said.

He noted that state Department of Motor Vehicles (DMVs) offices document transactions after the fact, and that vehicle history services need more timely vehicle title information to minimize consumer risks.

The NADA testimony stated that existing technology in the private sector should be used so that all states move to electronic titling of motor vehicles. The association also called for states to work more aggressively with the information companies to reduce the timeframe that electronic data reaches consumers.

Hall’s congressional remarks echo those made by NADA Chairman Jack Kain in October, when he called on insurance companies, auto manufacturers and state DMVs to improve the uniform access and reliability of vehicle title information, in a speech to the Automotive Press Association in Detroit.

Since then, the National Insurance Crime Bureau has taken an important step toward that goal by introducing an electronic database for identifying flood-damaged vehicles. “We applaud the insurance companies for providing information about flood cars, but why not provide the same data for severely wrecked vehicles?” asked Kain.

Shortly after Hurricane Katrina struck, NADA issued a series of consumer tips for spotting flood-damaged vehicles, available at http://www.nada.org/floodtips.