Title wash rules finally arrive

WASHINGTON -- The federal government on Monday publicly unveiled proposed rules requiring insurers and salvage yards to identify for a national database all severely damaged vehicles they acquire.

The National Automobile Dealers Association, automakers and consumer groups have been pressuring the Justice Department to issue the rules, originally mandated by a 1992 anti-theft law.

The industry and consumer groups contend full implementation of the law would help stem title-washing the practice of reselling repaired wrecks and flood-damaged vehicles with clean titles which victimizes dealers and consumers, they say.

NADA Executive Director of Legislative Affairs Ivette Rivera said late Friday the proposed rules are "a great first step" for departments of motor vehicles but a more effective solution is still needed to make total loss data available for consumers and dealers. Until total-loss information is made available in an electronic and commercial format so that vehicle auctions, dealers and the public can track total loss vehicles, legislation will be needed.

NADA also has been pressing for a new law requiring insurers to immediately disclose every vehicle they declare a total loss, regardless of the reason.

You can reach Edward Lapham at elapham@crain.com

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