After 16 Years, Justice Department Ordered To Build Used Car Database

A federal judge ruled last week that the Department of Justice has until March to establish a used car database as directed by Congress 16 years ago. The National Motor Vehicle Title Information System will warn potential buyers if a used car was stolen or totaled, and will instantly verify the car’s title and mileage. Here’s how it will work…

By the end of March, all insurance companies, junkyards, and salvage operations will be required to tell the government when they write off vehicles damaged by floods, fires or crashes. Unlike the for-profit service CarFax, the system will capture information on all used cars.

The suit against the government was brought by Public Citizen, Consumers for Auto Reliability and Safety and Consumer Action, which argued that the Justice Department’s failure to implement the 1992 law was endangering consumers. Justice countered that after 16 years, establishing the database was next on their to-do list.

The government did not dispute that it had failed to implement the law. But it argued it could be trusted to implement the National Motor Vehicle Title Information System without court-ordered deadlines.

Judge Patel ruled from the bench and rejected the government’s request.

The ruling is a tremendous win for consumers, one that will eliminate much of the uncertainty associated with buying a used car.

Public Registry for Wrecks Is Back on Track [Wheels Blog]
Car safety database still MIA [ABC7]
Consumer Groups Win Suit Over Used Vehicle Database [Consumer Law & Policy Blog]
(Photo: extranoise)

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  1. TheUncleBob says:

    But how much will it cost taxpayers who don’t buy used cars?

    • Scuba Steve says:

      @TheUncleBob: More than they’re paying now, but less than they’d be paying for a new car?

    • Roclawzi says:

      @TheUncleBob: A billion trillion dollars. I mean, I’m all for defending people who don’t think they should have to pay for the 9th welfare baby even if I don’t agree, but considering that lemons are a hazard on the road and a potential traffic hazard, I think it’s warranted that this system be implemented. But next time you’re stuck in traffic for an extra 45 minutes because someone’s car died on them causing an accident, sit there and wonder if it was that car’s time, or if a dealer pulled a fast one on the buyer.

      • TheUncleBob says:

        @Roclawzi: I’d rather blame the person who bought a used car without getting it properly checked out and didn’t take proper care of it.

        • Roclawzi says:

          @TheUncleBob: Caveat emptor? Not everyone is a mechanic, and even then there are plenty of temporary fixes that look just like a permanent solution. Let’s not forget how big the industry is that makes it’s dollar by selling used cars for more than they are worth.

    • jjason82 says:

      @TheUncleBob: I’ve never met anybody in my life that hasn’t bought at least one used car.

    • jonworld says:

      @TheUncleBob: Not nearly as much as the Iraq war costed those taxpayers who hadn’t been abused by Saddam Hussein or killed by Iraq’s nonexistent WMDs..oh wait…that’s none of them!

      • jonworld says:

        @jonworld: hadn’t should be had

      • TheUncleBob says:

        @jonworld: I’m not sure what that really has to do with anything. Just because the government wastes money on one program, it should not give them a blank check to waste money on anything and everything else.

        • redkamel says:

          @TheUncleBob: it has to do with the fact that government tends to waste a lot money on things things that do not benefit the public and are very expensive, rather than on things that are relatively cheap and help everyone who lives in the US. Therefore it is somewhat pointless to complain about “wasting money” on a database when far more is being wasted on foreign policy and legal screw ups like the housing market bailout.

          I would also say this database costs a lot less than the 35,000 or whatever it costs each person to bail out wallstreet, but not the publics loans.

    • P_Smith says:

      @TheUncleBob: But how much will it cost taxpayers who don’t buy used cars?

      So, cars on the road don’t affect you, such as ones with bad brakes which never crash into you while you cross the street?

      Your statement is as empty as saying those who don’t fly shouldn’t have to fund the NTSB.

  2. KingPsyz says:

    This should help dealers avoid lemons as well. I’m pretty happy this is finally getting underway.

  3. KingPsyz says:

    Bob, it shouldn’t be all that expensive since it’s just data retention. I would assume the small upkeep and gathering cost would be covered in vehicle taxes and registration.

    Plus this will act as a deterent to vehicle theft if it’s harder to move the vehicles. So this does benifit anyone who drives a car.

    • TheUncleBob says:

      @PSN: kingpsyz: We’re talking about the federal government here. Any group that can make a hammer cost $100 is the type of organization that I don’t really trust to do something useful on the cheap…

    • Ryan Duff says:

      @PSN: kingpsyz: It shouldn’t, but all the bureaucracy will make it cost billions. Do you know how many people we have to pay to manage that data plus how many people we need to pay to manage those people???

    • I_Elohel says:

      @PSN: kingpsyz: Plus, think about server and bandwidth costs. Sure, it seems like a little bit of data, but we’re talking EVERY used car. That data will need to be accessed by nodes across the country as well. Add on to what Ryan Duff and TheUncleBob have already mentioned and we’re talking about a massively inefficient and overpriced system.

      God I love the USA.

      • ohenry says:

        @I_Elohel: I disagree with the negativity being tossed around about this.

        This is something that indeed should be done. There is no denying that it will, as stated, help consumers in many, many ways. From deterring theft to helping consumers make sound financial decisions, this is a great idea all around.

        Like you said, there are going to be those costs. But how else can it be done? Do you have any suggestions? How we can mass distribute important information and employ people to update and upkeep that information, all on the cheap?

        I think we’re all complaining way too much here. If anything, the biggest concern would be them actually doing it at all. They put if off for 16 years the first time, why not 16 more?

        • I_Elohel says:

          @ohenry: No, I agree with you. I was merely expanding on the negative aspect of the situation. I completely agree that this needs to be done, especially as one who ONLY buys used vehicles. I have been on the unfortunate end of a purchase where I bought a used vehicle from a private party and found out months down the road that it had some damage to the underside of the vehicle where it had looked like it had been wrecked and we were told that it hadn’t been wrecked before.

          • ohenry says:

            @I_Elohel: Good call!

            Yeah, I just think it’ll be interesting to see if they really do go through with this. I hope that Consumerist can keep us updated on the progress of this if any is released.

      • silver-bolt says:

        @I_Elohel: If you think in terms of the actual data being stored and transmitted, this database will most likely not be any different then say… The DNS system, a system that is wholly incredible efficient and not overpriced.

        • cerbie says:

          @ELC: Making decisions will take longer than any stage of real implementation. Technology has been ready for this for 20 years or more. Now, today’s software can make building it faster, and maintaining it easier.

    • mac-phisto says:

      @PSN: kingpsyz: they could also implement a nominal fee for companies to access individual records in the database. dealers, insurance cos., lenders & even companies like carfax would benefit immensely from the data.

      this could also have the side effect of reducing depreciation of cars overall – i would imagine that book guides (which are largely used to determine FMV) would harvest the aggregate data to refine their vehicle values. strip out the junk vehicles & the average value of most models should increase.

  4. clocker says:

    I believe the actual government response was “We said thanks but no thanks to the NMVTIS” and I’m shocked- shocked I tell you- that the bench chose not to accept this at face value.
    I also think that the government is considering putting this database on computers, so they’re waiting for a sale at Best Buy to buy one and evaluate the concept.

  5. UptonCyparissus says:

    But how much will it cost taxpayers who don’t buy used cars?

    Bob, thesmall cost of entering and maintaining a computer record will be more than offset. A buyer with higher confidence in the condition of your car will be willing to pay a little more. Free markets work best when maximum information is easily available. The price someone will be willing to pay for your car won’t be discounted by their unease of its history and you’ll likely get a few dollars more.

  6. tedyc03 says:

    I’m surprised Carfax didn’t file a lawsuit to protect the core of its business and tie this up in the courts for another 20 years.

    • tackhouse1 says:

      @tedyc03:

      It looks like the Judges decision was handed down on the 22nd. Give Carfax a few more days I can guarantee they will file a lawsuit…

      • spazztastic says:

        @tackhouse1: I just disposed of my old car by selling it to a wholesaler who printed up the Carfax report. I told him straightup that it had been in an accident. He pulled up the Carfax, and all it showed was the annual NYS inspections, and no collisions.

        THis brings up two things-h
        The accuraccy of the database is up to the person entering the data.

        Carfax doesn’t know everything.

    • timmus says:

      @tedyc03: You took the words right out of my mouth. I thought bribery and kickbacks greases the wheels of government.. something is obviously wrong here.

    • humphrmi says:

      @tedyc03: Maybe I’m being naive, but doesn’t carfax get its data from the government?

  7. AlexJP says:

    I can see two things getting worse:

    * The costs to perform basic vehicle transactions (title fees, etc) will increase,
    * The time and hassle to remedy any errors, such as the errors that keep you from selling your perfectly good car because someone fudged the VIN number when reporting someone else’s totalled car. (I am aware VIN numbers have check digits, but that is not a cure all).

    My vote is no, thanks. I deal with the RMV way too much already (i.e. once every 10 years).

    • humphrmi says:

      @AlexJP: Errors need to be corrected, even if they cause some inconvenience to you so that others can get a strait, safe car.

      • AlexJP says:

        @humphrmi: In other words, I bear the costs and others get the benefits. Gotcha.

        • RvLeshrac says:

          @AlexJP:

          You bear the costs. When someone related to you buys a used car, they don’t die in a hellish prison of twisted metal and broken glass because someone lied in order to sell that car.

          • AlexJP says:

            @RvLeshrac: That is some extreme hyperbole.

            And I resent other people making value judgments for me. I don’t see your hypothetical scenario to be a problem, particularly since this is already being dealt with at the state level.

            Why add another layer of ineffective bureaucracy?

            • RvLeshrac says:

              @AlexJP:

              I know plenty of people (friends, relatives) who have been stranded on the side of the road because the used car salesman lied or stretched the truth.

              Fortunately, none of them were kidnapped/raped/killed by unsavory individuals while they were waiting for the tow truck. For that matter, none of them were killed in accidents while stuck on the side of the road, and none of them were killed by having their power steering suddenly lock up on a curve.

              If we deal with this on the state level, we’re apparently doing a piss-poor job in most states. Keep in mind that state laws can vary WILDLY, and some states will offer their citizens no protection at all.

  8. copious28 says:

    Down here in Texas, they just steal expensive imports and SUVs and strip them down for parts to sell on the gray market. We have even had a rash of tire + wheel thefts on larger SUVs in the last three months.

  9. NightSteel says:

    I’m for this as long as there is no ‘feature creep’ that somehow causes this database to end up as part of a law enforcement program. It should be a pro-consumer tool, nothing more.

    Of course, given the tendencies of government, that’s probably a pipe dream. But I can hope.

  10. TechnoDestructo says:

    So how many Carfax employees are former Justice Department employees?

  11. madanthony says:

    As far as stolen vehicles, they are already tracked in the NCIC database, but I’m not sure how accessible it is.

    I disagree that this will capture info on all cars. It suffers from the same problem as Carfax – it’s only going to include information if 1)the car had enough damage to be totaled, which is usually damage greater than around 70% of the car’s value depending on the state and 2)if the damage went through insurance. If someone fixes the damage themselves, it won’t be reported.

    Both carfax and this new database will tell you bad shit happened to a car, but the absence of bad shit in either report does not mean that bad shit didn’t happen to the car.

    • mythago says:

      @madanthony: What it will really prevent is large-scale fraud – taking cars that have been severely damaged or totaled out, and then turning around and reselling them without disclosing that.

  12. digitalgimpus says:

    Unfortunately this won’t do much. People will just tip $20 to prevent the agent from reporting on the car.

    Carfax has always been somewhat of a joke since it’s design doesn’t prevent people from simply not reporting things, and paying repair shops and salvage lots to not report it.

    Nationalizing this doesn’t really fix the problem.

    If you want to crack down, you need to tightly regulate parts like prescription medication. Even then you’ll still have people who buy parts illegally or import, but you’ll have less than you have in the free market right now. When parts are purchased, that’s when the record should be updated.

    Of course that won’t happen. It’s not practical or worth while. That system would cost to much for the benefit it provides.

    • Tannen Van Horn says:

      @digitalgimpus: Done right, it could work without costing a horrible amount. For instance, code a program that licensed stores (both chains and individual store as well as salvage yards) would collect VIN information for each major part bought (a tail lamp, not recorded; a whole bumper, yeah). Salvage yards could even be required to make reports of what parts were pulled from what vehicle’s VIN from their lots. There could be a daily/weekly/monthly/whatever data dump (most stores do this anyhow now-days for sales records and the like) to be collated in the government’s servers for this thing.

      Then again, all this makes some semblance of sense and contains logic. Those in government might not be able to understand a word of what I said anyway…

    • Coles_Law says:

      @digitalgimpus: Also, it would slow the repair process greatly. Requiring a VIN to buy parts means mechanics wouldn’t be able to hold any stock. That would add 2-3 days to a repair.

      • TheUncleBob says:

        @Coles_Law: ehh… the regulation of car parts? No thanks… How much would that slow down the repair process, not to mention, couldn’t I just get the VIN off of someone else’s Dodge Intrepid and have the replacement part ordered with their VIN in the first place?

  13. In response to the ruling, the government said:

    “We will comply with the ruling by paying a private company millons of dollars to do the job. We will then write a contract which gives us no control over the timetable of the project and in another 16 years declare the software doesn’t work anyway. We really hope by this time that everyone uses anti-gravity devices or something.”

    • catastrophegirl chooses not to fly says:

      @twophrasebark: another 16 years? we’ll all be in flying cars by then. i was promised a flying car!
      oh wait – reality check – by the time the database is up and running all gasoline fueled vehicles will be obsolete due to a lack of oil.

      • TechnoDestructo says:

        @viewsource:

        If this DOJ database only lists wrecks and thefts, Carfax will still have some advantages. (Mileage records, and records of where the car was over the years. For instance, I won’t buy a car that’s spent more than a year or so in Alaska)

  14. FrankReality says:

    So the Federal government will eventually have a huge, expensive database full of inaccurate data that they will not be able to keep current, which means it will be pretty much useless.

    Their assumption is that salvage yards, auto auctions, dealers, rebuilders, insurance companies and private parties will all update the database. They’ve got to be smoking something to think that they will be able capture 100% of automotive transactions.

    And yes, this will be a new tax on all of us – you really didn’t expect dealers, automotive recyclers and insurance companies to eat the cost of this.

    And with the Federal government, there will be function creep – the data will eventually be used by law enforcement.

  15. viewsource says:

    CarFax going out of business in 3…2…1…

  16. lostsynapse says:

    Don’t worry about carfax. The government will just buy them out and fold them into this division of the DOJ. You have to just love this new GOP.

    • bwcbwc says:

      @lostsynapse: More likely they’ll outsource the whole operation to CarFax, since CarFax will have some extra incentive to bid low on the Fed contract and put all the “good stuff” in their for-profit service.

      This is one where Congress should really repeal the law, unless the data is actually used by the feds for some purpose (Consumer product safety?). CarFax has shown there’s a free-market solution for the consumer/merchant demand for this type of information, so the only real reason the feds need to be involved is if the government has a legitimate need for the information for its own purposes. Another approach might be to regulate CarFax in some way.

  17. zolielo says:

    Everything is a trade off. But the benefits will out weight the costs…

  18. balthisar says:

    This is something the federal government can be useful for! No stupid interfering with our lives, but simply mandating that information is available!

    Why can’t we do this with simple stuff like non-narcotic prescription drugs? Or education? Or seatbelt laws? Here’s the information. Use it or not.

  19. TPK says:

    Two comments…

    I would love to have been a fly on the wall listening to a DOJ lawyer explain just how 16 years of inactivity is not an indicator that they weren’t “just about to get it done!”… You gotta wonder how these lawyers can actually keep a straight face with some of the lines they get paid to deliver.

    Second… I don’t think CarFax will be going out of business, and obviously they can’t be “bought out” by the DOJ… If they were smart, they would submit an unsolicited proposal that offers to incorporate the CarFax business model and database into this new requirement. Undoubtedly, CarFax can do it cheaper and more efficiently than the DOJ can from scratch. CarFax can tweak their entire business model to be funded by DOJ, probably triple their coverage of cars, increase their customer base by at least one order of magnitude, charge a quarter of what they charge now on a per-report basis (thus providing an illusion of savings to the government), and rake in a substantial fortune in the process!

  20. narf says:

    It’s about time. It’ll be much more useful if it actually discloses the reason for salvaging too. Hail damage or theft recovery isn’t as bad as a rollover, y’know.

    The issue at stake is that some wrecks get sold off at auction without the title being pre-labeled as salvage until the vehicle is re-registered. This is provides an easy loophole in which the vehicles get registered in a different state which has more lenient standards.

    Here in CA, to get a salvage car retitled, one only has to get it to pass the smog check, that the headlights are aimed and taillights are functional, and that the brakes can stop the car from 25mph. That’s it. Nothing about how straight it is, if the other safety aspects are functional, etc.

  21. Tank says:

    next on my to-do list:

    1) believe they weren’t lying.
    2) laugh my fucking head off
    3) repeat

  22. CRCError1970 says:

    Yeah, CarFAX is *never* wrong. Ever.

  23. Grrrrrrr, now with two buns made of bacon. says:

    By March??? Sheesh, I work in state government and it takes 6 months to order a box of pencils, so good luck on that March thing. I would say a realistic timeline is more like 2-3 years.

    This certainly does not bode well for CarFax, although I’m pretty sure they’re probably eligible for a billion-dollar government bailout.

  24. Squeezer99 says:

    man i wish they had this earlier. i was looking at a 97 honda accord, seemed to check out ok with only a few little minor problems that were ok for its age. bought it, then realized after driving it more, that it had more then a few problems. used car lot was dicking me around on getting the title to me, with a different excuse each time I called. looked it up online with the free government VIN Check and it had a flood claim on the title for, you guessed it, 08/29/2005 (Katrina). and when I got the title it was marked as flood damaged, damnit. i did fix most of the electrial problems with it and it runs good now. it has low mileage and just has to run for a couple-few years anyway while I save up for something even better, and at that point i’ll just take it to the scrap yard and have it crushed.

  25. SigmundTheSeaMonster says:

    I doubt Carfax will go out. I expect them to build a warchest and lobby whoever will take it to slow this down (if they aren’t already doing this..hint hint).
    They should mandate that tow-companies start inputting data since they are the first to recover-remove vehicles to repair/salvage. I know two firms that could contradict the data AAA has had on certain cars and contrast data Consumer Reports has on some of their “best picks”.
    Can’t wait to see all those “relisted” cars from Galveston, TX.

  26. dopplerd says:

    I once bought a car in New Zealand. Printed right on the car’s title was a list of all the previous owners and the odometer reading at the time of each transfer. This was almost 10 years ago. It is appalling that there is not a comprehensive database that tracks the cars in the United States. Especially when it is very easy to move a severely damaged car to a different state and have a clean title.

  27. RvLeshrac says:

    @FrankReality:

    They will be able to capture 100% of all title transactions, because they ALREADY capture 100% of all title transactions.

    If you don’t pay for your title, you already lose your car and go to jail.

    Further, if implemented properly, we ALREADY bear most of the burden of this system with tag/title fees.

  28. RvLeshrac says:

    @Grrrrrrrrr:

    I work at a private business, and it still takes six months to get a box of pencils.

    Lazy people aren’t solely the government’s problem.

    • Grrrrrrr, now with two buns made of bacon. says:

      @RvLeshrac: Well, it’s good to know it’s not just a government problem.
      On the government side, I wouldn’t say that it’s laziness…more like beauracracy…multiple forms, approvals, funding sources, pencil consultants, minimum standards, meetings, quorums, etc. etc.

  29. jgonzz says:

    I bought a used car last year and took it in to a local car mechanic that specializes in my make to fix a few things and change fluids etc. As a goof i looked up my carfax report a few weeks later and everything i had completed on my car was already noted..

  30. JackWindies says:

    As a software Eng. this thing should take ho about I don’t know a week to write for one person. Can’t believe he gave them that long to wiggle out of it doing it.

    And in all reality I could hack something together on the hardware in my bedroom in overnight that would probably do the job.

  31. forgottenpassword says:

    Awesome!

    I only buy used vehicles (cheaper that way) and all you have is a carfax report & your mechanic’s inspection to go on.

    So far so good, but with this new databse… even better!

  32. ok-milk says:

    FTA, the deadline is march *2009* So, just 17 short years later.

  33. econobiker says:

    Awww, no more title washing? Or are the states going to standardize their title descriptions???

    And will car dealers now have another B/S charge to put down after the “title and doc fees”…

  34. NotATool says:

    And what about Illinois? In this state, nobody is compelled to report any title history about used cars. CarFax is worthless in Illinois…why should this DB be any different? Is the Fed gov’t requiring reporting now?

  35. johnnya2 says:

    First off, you may not BUY a used car, but unless you run your new car until it is no longer road worthy and take it to the junk yard you have SOLD or given a used car somewhere. The only people this does not affect are those who have never driven and will never drive. Once a car is off the lot, it is now a used car.
    Second, buying used is much more intelligent than leasing or buying new. The highest rate of depreciation is that first minute off the lot. Let somebody else pay for that money.
    Third, there are many things that people do not use or want that we all pay for. We pay for a highway system in Alaska. I have not, nor will I ever use it. We pay for the Space Shuttle, and I have not, nor will I ever fly in one. We pay for the FAA, and many people have never flown or will never fly.

  36. ELC says:

    It’s the govt and no matter how simple it appears, it will cost way more than it should.

  37. Tankueray says:

    This database already exists, it’s just that not all of the states are reporting to it or implementing it fully. The reason it needs to be implemented nationwide is so that other states can see where and how a vehicle has been titled before to prevent title washing. The hope is that when you apply for a title, a search of the database will determine whether the vehicle is eligible for a clean title.

    It currently costs less than $7 million a year to run. To pay for it, the states will asses a fee on every motor vehicle – .01 – .07 per title. The fee depends on the amount of motor vehicles titled in the state (i.e. more vehicles, cheaper fee). Actually, I’m assuming the fee will be attached to your yearly tag fees, since a vehicle title will only change hands a few times in it’s lifetime and the license plate fee is yearly. Notice I said “motor vehicle” and not “automobile”. Motor vehicle is anything that goes on a public roadway under its own power – motorcycles, RVs, 18 wheelers, etc. Automobile is four wheels and under 10,000 lbs.

    The database will report whether the vehicle has been declared a total loss, stolen, the last odometer reading, and should tell you where it’s been titled before. It will not tell you about insurance claims that were not total losses or mechanical issues. So, unless it’s a case of a fraudulent title, the lemon law does not come into play here.

    The National Insurance Crime Bureau has a voluntary database currently that works much in the same way:
    [www.nicb.org]
    From what I understand, the insurance companies volunteer information to this database, so vehicles in it may still have clean titles. Don’t know how or why, but one of my cars comes up as a total loss and I have a clean title. I bought it from the owner after that wreck and rebuilt it.

    The NICB (2005) database was created to prevent people from unknowingly buying flood cars. The NMVTIS (1992) was created to prevent stolen car VINs from being reused.

    The full disclosure about the database can be found in the Sept. 22, 2008 Federal Register, just search NMVTIS on the FedReg simple search.

  38. mrearly2 says:

    It’s about time they made Big Brother bigger.
    I think we also need a “used tooth brush database”.