WASHINGTON -- Auto dealers and insurers are headed for a confrontation over title washing.
Dealers support a bill before Congress that would require insurance companies to report every vehicle they declare a total loss. The measure would cover vehicles severely damaged by bad weather, theft or a crash.
The National Automobile Dealers Association says the bill would provide a simple, lasting remedy for a long-standing problem: Damaged, potentially unsafe vehicles can be fixed and resold with clean titles to unsuspecting dealers or consumers.
Congress took a renewed interest in the issue after Hurricane Katrina and other storms flooded more than 500,000 vehicles last year.
Early this year, NADA told lawmakers that consumers must be protected not just from last year's flood-damaged vehicles but also from the 5 million cars and trucks that are destroyed every year.
The association called for an accessible database of total-loss information from insurers.
Sen. Trent Lott, R-Miss., introduced a bill late last month that would implement NADA's proposal.
Time is running out in the congressional session.
But NADA President Phil Brady told Automotive News that the first anniversary of Hurricane Katrina this month could encourage lawmakers to consider the measure.
David Regan, NADA's vice president for legislative affairs, says the bill's introduction will start the debate. No law would be needed if insurers were to disclose total-loss information voluntarily, he indicated.
David Snyder, vice president of the American Insurance Association, says insurers want to cooperate. But the proposed database would be incomplete and would create new problems, he says.
"It misses the target," Snyder says.
Insurers favor improvements in state titling practices and electronic links among states, Snyder says.
Dealers say they have sought such changes for years, but title washing continues.
Regan says he doesn't want to impugn motives. But he contends that insurers have "an economic interest" in withholding information about repaired vehicles that are sent to auction.
You may e-mail Harry Stoffer at [email protected]