House Lawmakers Introduce Legislation to Disclose Totaled and Flooded Vehicles to Public

Support Growing for Effort as Legislation Gets New Backers

WASHINGTON, D.C. (September 25, 2006) - Senior lawmakers, led by Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and Commerce Subcommittee on Commerce, Trade & Consumer Protection, recently introduced the Damaged Vehicle Information Act, H.R. 6093, to ensure that totaled and flood-damaged vehicles are flagged forever so that consumers and auto retailers can make more informed decisions about the safety and fair market value of used cars.

"Whether a car is flooded in Florida or wrecked in Rhode Island, total-loss disclosure would give consumers and automobile dealers essential information about these problem vehicles," said David W. Regan, the National Automobile Dealers Association's (NADA) vice president for legislative affairs, praising introduction of the bill.  "We support Representative Stearns' simple, common sense, and low-cost approach to giving consumers access to the very same vehicle history data that insurance companies already collect."

The NADA-supported House bill would rely on existing technology to permanently "red flag" totaled vehicles. The legislation would require insurance companies to make commercially available: the Vehicle Identification Number (VIN) of a totaled vehicle, the reason for the total loss (flood, collision, stolen, etc.), the date of total loss, the odometer reading on that date, and whether the airbag deployed. Senator Lott (R-MS) has introduced a similar bill, S. 3707, pending before the Senate Commerce Committee, which recently added new backers.

The estimated 500,000 vehicles damaged by Hurricane Katrina are only part of the problem.  Insurance companies totaled approximately five million vehicles last year due to extensive damage, flooding or theft. Thousands of these damaged vehicles are sold at salvage auctions, rebuilt and re-enter the market with clean titles, so consumers, wholesale auto auctions and dealers may have no way to learn about the total loss.

Flood-damaged vehicles are surfacing far from the Gulf Coast, but conflicting and confusing state motor vehicle title laws hamper efforts to spot these problem cars.  Both the House and the Senate bills would attack motor vehicle fraud at the core by disclosing total loss information before a vehicle is sold at salvage auction, rebuilt, and returned to the market.  This Federal legislation would not require any change in state titling laws, but would give consumers access to valuable information to identify totaled vehicles before these potentially unsafe cars ever re-enter the market.

"The goal of this legislation is simple - if a vehicle is totaled, the VIN should be disclosed to the public," Regan added.  "Armed with total-loss information, consumers, businesses, dealers, auto auctions - anyone buying used cars - should be able to spot one of these rebuilt wrecks, even if the title is clean. This legislation is necessary to red-flag the total-loss history of a used car forever."