16 Years After The Law Was Passed, The National Auto Database Still Doesn't Exist

The Consumer Law & Policy blog says that three consumer advocacy groups, Public Citizen, Consumers for Auto Reliability and Safety (CARS) and Consumer Action, have filed a lawsuit in order to force the Department of Justice to enforce a law passed in 1992 that requires a national database of auto information gathered from insurance companies. The database would allow consumers to “instantly check the validity of the car’s title and odometer reading and learn whether it had been stolen or severely damaged in the past.”

Here’s what Senator Chuck Schumer (D-NY) had to say about the lawsuit:

“We all know that you can’t always judge a book by its cover and the same is true with many used cars that end up at junk and salvage yards. Consumers deserve to know the true origin and condition of the vehicles they are purchasing, including whether that car was once stolen.

It is simple: for sixteen years, the Department of Justice and junk yards have been eschewing their responsibility to consumers, law enforcement, and the public by ignoring their mandate to routinely file the required reports. It is about time that all parties were forced to comply with what I believe is a common sense measure to fight auto theft and to protect the public from fraud. I am encouraged by Public Citizen’s efforts on this case, and I hope that this important law will finally be enforced as it should have been from day one.”

Consumer Groups Sue Justice Department Over Auto Database [CL&P]
(Photo:Senor Codo)

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  1. Honus says:

    Schumer isn’t much of a prize when taken all together, but he and Spitzer do an ok job of standing up for consumers.

    Anything that means I wouldn’t have to use CarFax is a good thing.

  2. speedwell (propagandist and secular snarkist) says:

    @Honus: So what makes you suppose the government-provided service is going to be better and/or cheaper than CarFax? Not to be flippant, but this is the government we’re talking about here. Strictly lowest bidder all the way.

  3. This is why I don’t worry (too much) about all these other database projects the gov’t likes to try to put together. They’re far too incompetant to even know what a database is, let alone put together a comprehensive database.

  4. Balisong says:

    Why oh why did I read that as Senator Chuck Norris?

  5. Black Bellamy says:

    Right. So basically a free Carfax? Oh wait, it won’t be free? Why are they doing this? Didn’t the private sector take care of this demand already?

  6. Curiosity says:

    It would be interesting b/c it impacts the perceived value of the car (which is obvious).

    What is less than obvious is that it highlights a basic problem in remedies law – that even though something may be repaired, it inherently loses value. For instance, there is an inherent difference between a NEW item, a RETURNED item, and a REPAIRED/REFURBISHED item.

    Consumers are perfectly willing to let corporations justify their policies that indicate that there is a loss in value of the item and it cannot be returned etc under certain conditions, however are less likely to demand that they be given proper value when there is a problem with their items (and thus informally contract possibly out of their remedies through ignorance).

    Thus, insurance agencies perhaps do not want this information public, b/c it will bring into focus the plain fact that when someone hits your car, a simple repair of that car is inherently insufficient to put you back into the condition you once were in with a new car and people will be less likely to buy it b/c of that.

  7. Bladefist says:

    slippery slope with this DB stuff. Careful.

  8. beavis88 says:

    @Black Bellamy: They do a lousy job, because it’s not in the best interests of their profit margins to do a good job. It’s one of those cases where it makes sense for the government to step in, and make providing accurate information to its citizens the primary goal of the system.

  9. llcooljabe says:

    @Curiosity: Your insurance company rant in the last paragraph makes no sense.

  10. K-Bo says:

    @llcooljabe: Makes perfect sense, the fact that my car has had body work hurts its resale value. Insurance people don’t want everyone figuring that out and demanding they get the money for the lost value on top of the money it takes to fix it.

  11. bradanomics says:

    @speedwell:

    You mean like Haliburton? The lowest bidder? If they were the lowest bidder, I would hate to see the other contracts that were offered. Oh wait, no bidding happened. The contract was just awarded to them.

  12. mzs says:

    I just call my insurance agent and tell him the VIN before buying. He calls back (actually recently she) to tell me about any accidents. I have had it happen that a CarFax report showed nothing but the insurance agent told me it was after a wreck where there was $X of damage to the front end. When approached the seller said, “oh yeah,” and then we agreed on a price $1500 less.

  13. llcooljabe says:

    @K-Bo: Insurance companies aren’t responsible for market value of your car, they’re responsible for fixing it.

    just because your car loses value for being in an accident is not in their control. A car not working after an accident is under their control cause they are responsible, by contract, to fix it.

  14. K-Bo says:

    True, but that may cause a lot of people to decide to cut back on coverage ect. when they realize they come out on the loosing end either way. I could also see people pressuring insurance companies to pay for lost values, and if even one gave in, no other company would stand a chance against them without also changing their policies. Your view is the reasonable view on the subject, which is the reason I don’t expect many people in our “the world owes me everything” world to see it that way. These days, being of a reasonable opinion rarely places you in the majority.

  15. llcooljabe says:

    In some jurisdictions, you can buy an endorsement that covers market value of the car.

  16. Sudonum says:

    @llcooljabe:
    A similar story was posted a while back here. I believe in some of the cases cited the insurance company was also required to reimburse for lost market value. And in this instance the responsible party gave the person a complete replacement rather than repair his vehicle. Even though the vehicle certainly was not totaled. [consumerist.com]

  17. kingedwin says:

    IIRC:
    Cost of Program: $20 Million/year
    Legal costs saved: $3 Billion/year

    Remember all those flooded cars from Katrina being passed off as something else? Wouldn’t have happened on near the scale it did if this law was being enforced.

  18. cmdr.sass says:

    @kingedwin: I’d rather pay $0 and let CarFax do all the work.

  19. Ariah says:

    “The CarFax Bankruptcy Act, passed in 1992″… Whoops, I read that wrong.

  20. MayI says:

    I have tried Carfax in the past, and found it to be pitifully inadequate. I checked on a 3-yr-old car and it had no record prior to my purchase of it. I REALLY doubt that it floated around from car lot to car lot in all that time, especially with the miles on the odometer.

  21. speedwell (propagandist and secular snarkist) says:

    @bradanomics: Say, I don’t remember reading that Halliburton was going to be put in charge of the proposed auto database. Have a citation on that?

  22. JiminyChristmas says:

    @mzs: Yep, CarFax is not foolproof. It’s a lesson I learned the hard way.

    I checked out a car on CarFax, it came back clean, and I bought the car. A few weeks later when the new title in my name arrived in the mail I opened it to find a big ol’ SALVAGE stamp on it. If CarFax is supposed to be good for anything a branded title is the one thing they should absolutely not miss.

    I later discovered that the car had been stolen, written off as a loss, recovered (minus a bunch of parts), sold at auction by the insurer, then bought, refurbished and sold by the independent dealer I bought it from.

    Lesson learned: Always insist on seeing an original copy of the title.

    It was a rookie mistake on my part, but not one I’ll make again. In hindsight, it makes perfect sense that the car was being sold for 25% less than book value. Luckily, I’m the type who will drive a car until it is beyond repair, so I don’t have to worry about reselling it.