Washington, D.C. – Hoping to provide dealerships with better tools to spot problem vehicles before they come into inventory, Senator Trent Lott (R-Miss.), Rep. Cliff Stearns (R-Fla.), and other Congressional leaders pledged at a Dec. 7 press conference to continue their efforts to pass total-loss disclosure legislation when the new Congress convenes in January. Lott said he plans to reintroduce legislation in the 110th Congress to reduce title fraud and title washing on insurance-totaled vehicles.

“The more consumers hear about the danger caused by rebuilt wrecks, the more they want Congress to do something about it,” said David Regan, vice president of legislative affairs for NADA. “With more than five million vehicles totaled by insurance companies just last year — more than half a million of them coming from the Gulf Hurricanes of 2005 — something has to be done to permanently notify consumers about these severely damaged vehicles.”

The goal of the legislation is to get total loss information into the public domain more comprehensively and faster than it is today. Officials from the NADA said dissemination of this information is hampered because laws regarding what is deemed a total loss vary by state. The new legislation would push a separate stream of data into the public domain by requiring insurance companies to make vehicle data commercially available to information vendors such as Experian, CARFAX and AutoCheck.

“Experian and CARFAX are dependant on the state, and not all insurance-totaled vehicles are titled by the state,” added Regan. “If all insurance companies report this data, then that would be more data going into the system that what’s coming through from the DMV.”

Due to water damage, severe accident, theft, etc., insurance companies may declare a vehicle a “total loss,” but each year thousands of these vehicles are sold at salvage auctions and rebuilt and re-enter the market with clean titles.

Lott and a bipartisan list of colleagues sponsored S. 3707, the Passenger Vehicle Loss Disclosure Act, to require that insurance companies permanently red-flag totaled, flooded or stolen vehicles in the 109th Congress. S. 3707 is related to a similar bill introduced by Rep. Stearns, H.R. 6093, in the House of Representatives.

Aside from permanently red flagging severely damaged vehicles, the bill would require insurance companies to reveal the reason for the total loss (flood, collision, stolen, etc.), the date of total loss, the odometer reading on that date, and whether or not the airbag deployed.

Both the House and the Senate bills would also attack motor vehicle title fraud at the core by disclosing total-loss information before a vehicle is sold at salvage auction, rebuilt, and returned to the market. This federal legislation would not, however, preempt state titling laws or require changes in state laws.

Last month, Seattle-based insurance company, PEMCO, announced that it would voluntarily disclose vehicle flood-damage information to the public. The NADA also released a letter signed by a coalition of automotive organizations, pledging their support for passage of total-loss disclosure legislation.

“The goal of this legislation is simple — if a vehicle is totaled, the VIN should be disclosed to the public,” Regan added. “Armed with total-loss information, consumers, businesses, dealers, auto auctions — anyone buying used cars or accepting trade-ins for a new vehicle — should be able to easily identify one of these rebuilt wrecks, even if the title was washed.”