Each year, millions of vehicles are totaled and thousands of wrecked, flooded, or stolen vehicles are sold without proper disclosure of their history or true condition. The current system for tracking totaled vehicles is outdated and full of loopholes, and a national database is years away from completion.
While insurance companies collect data on severely damaged vehicles for their shared databases, they are not required to electronically disclose the VINs of all totaled vehicles, to “red flag” these vehicles for the public.
To solve this problem, NADA is urging Congress to pass vehicle total-loss disclosure legislation so that consumers are better informed about vehicle safety and the fair market value of all used cars.
Many totaled vehicles are resold at salvage auctions, rebuilt, and reenter the market with a clean vehicle title. Consumers may suffer because the state DMV system of paper titles does not provide a timely or complete vehicle history.
State vehicle salvage disclosure laws are inconsistent and incomplete. While NADA supports the National Motor Vehicle Title Information System (NMVTIS) — a national DMV database established by a 1992 Act — the database is still far from complete.
The most effective and simple approach to combat title fraud is to give the public more timely and complete access to insurance data on totaled vehicles. Legislation is needed to require insurance companies to disclose the VINs of totaled cars to vehicle history providers, such as CarFax and AutoCheck, before the vehicle is put back into the marketplace. (See graphic below: “Tracking Totaled Vehicles for Consumers).