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WASHINGTON Legislation supported by used car dealers and insurance industry lobbyists is barreling through Congress to roll back safety standards consumers now enjoy when they purchase used cars, prompting a national coalition of consumer groups to sound the alarm.
"This bill is a lemon," said Frank Torres, legislative counsel for Consumers Union, the publisher of Consumer Reports magazine. "If this bill becomes law, consumers will pay a high price in safety and in their wallets. The bill would make it easier to sell wrecks to unsuspecting buyers with no meaningful disclosure that the car was damaged before they bought it. We're also concerned that safety protections some consumers now enjoy in the states would disappear overnight if this bill becomes law."
At issue is dangerous legislation which passed the House of Representatives last Wednesday by a vote of 336 to 72, which strips consumers of protections they now enjoy when they walk onto a used car lot to buy a vehicle. An identical proposal, authored by Senate Majority Leader Trent Lott, R-Miss., cleared the Senate Commerce Committee the same day by a vote of 15 to 5.
Under the proposal, half the used car market -- any vehicle over seven years old -- can be sold without any disclosure about whether it has been "totaled" due to a major accident. Both consumers and their State Attorneys General would also lose the capability to go to court to seek a refund from the used car dealer if they've been ripped off. In addition, state laws requiring safety inspections are wiped out.
"Portrayed falsely as pro-consumer, this bill is a Trojan Horse. It would ultimately eviscerate rights consumers already have under state law and prevent State Attorneys General from protecting them," said Richard Blumenthal, the Attorney General of Connecticut and Chair of the National Association of Attorneys General, (NAAG), Automobile Subcommittee of the group's consumer protection panel.
Problems with automobiles, including used car sales, top the list of consumer complaints that have reached State Attorney Generals for four straight years, according to a survey by NAAG. The bill being considered by Congress fails to measure up to the minimum safety standards for used car sales contained in a resolution adopted by NAAG three years ago. The legislation also does not come close to reform recommendations made by a recent congressional task force.
Nationwide, about 2.5 million cars are involved in traffic accidents each year. Many of these cars end up in the used car market as "rebuilt wrecks" and return to the highways with new owners who sometimes have no clue about the car's history. Surveys in Pennsylvania and Michigan indicate that as many as 70 percent of cars that are properly classified as "totaled" end up resold and back on the road with a new owner, instead of staying in the junkyard.
"This legislation allows the automotive equivalent of Frankenstein to be sold disguised as Prince Charming and after you discover the deception there would be nothing you could do," said Rosemary Shahan, President of California-based Consumers for Auto Reliability and Safety.
A rebuilt wreck typically fetches a much higher price if the consumer is left in the dark about whether it was in a major car accident, and more ominously, these used cars can pose significant safety hazards. These salvage vehicles can be unsafe to operate and dangerous in even minor collisions, due to bent frames which can cause them to pull sharply to one side, defective brakes, steering problems or other deficiencies.
In other cases, the rebuilt wrecks are 'chop jobs' where two different wrecked cars one damaged in the front and the other damaged in the rear are cut in half and welded together. In a minor accident they can literally split in two, increasing the risk and severity of personal injuries to their drivers, passengers, and the occupants of other vehicles with which they collide.
"There's no disclosure for consumers to help them determine if their used cars have been in a wreck or even had a safety inspection. If the seller of a car hides the fact that the vehicle really belongs in the junkyard and the buyer finds out, the courts can't help them recoup their money," said Mary Rouleau, legislative director of the Consumer Federation of America. "This measure has been labeled as a consumer protection bill. It clearly isn't."
The undisclosed sale of rebuilt wrecks costs consumers and automobile dealers more than $4 billion a year, and consumer groups have been actively opposing this bill for months.
Bernard Brown, who testified against the proposal earlier this year on behalf of the Consumer Federation of America and the National Association of Consumer Advocates, said, "It should be called the 'Used Car Dealer - Salvage Auction Protection Act."
The consumer coalition against this legislation includes Consumers Union, Consumers Federation of America, the Center for Auto Safety, Consumers for Auto Reliability and Safety, the National Association of Consumer Advocates, Public Citizen and U.S. Public Interest Group.
