OUCH! #3 A REAL 'LEMON' OF A LAW

Members of Congress and used-car salesmen. It's not clear which group is more mistrusted by Americans for all their devious practices. But, believe it or not, now they're combining forces! According to the Center for Responsive Politics, domestic auto dealers and their political action committees have given congressional candidates and the party committees a total of $7.4 million in the last three-and-a-half years, three-quarters of which went to Republicans. From the looks of a little-noticed bill that would set national standards on the re-sale of cars that have been involved in accidents, they're getting their money's worth.

The bill Congress and the used-car gang have banded together on would make it far easier for car dealers to sell rebuilt wrecks to consumers--without even having to tell buyers that the cars had been in accidents. Despite the opposition of the National Association of Attorneys General and a slew of consumer groups, the "National Salvage Motor Vehicle Consumer Protection Act" was passed by the full House last November. Sponsored by Trent Lott, the Senate version of the bill has cleared the Commerce Committee and is awaiting consideration by the full Senate.

Every year, more than 2.5 million vehicles are wrecked in accidents, reports the Consumer Federation of America. These cars are then bought, refurbished to conceal their damage, and sold to unsuspecting consumers who buy more than a million each year. Not only does the sale of undisclosed rebuilt wrecks cost consumers more than $4 billion; often these cars are incredibly unsafe. Many have poorly aligned structures, defective brakes and steering problems.

Currently, the sale of salvaged cars that are rebuilt after being in a severe accident is not covered by any federal law. Many states do regulate the practice, requiring that the titles of such cars label the vehicles as salvaged, and giving consumers some rights of redress. But the proposed federal bill would change all of that, for the worse:

  • The bill specifically exempts most used cars from having to be labeled as salvaged--those over 6 years old and worth less than $7,500. These are the cars bought by less-well-off Americans, people who are already more vulnerable to used-car scam artists. Trucks, motorcycles and motor homes are also exempted.
  • Injured consumers can't get refunds from a dealer who lies to them by intentionally selling a salvaged car without disclosing its history. Nor are dealers required to tell potential buyers of the car's past.
  • The bill would preempt much better state laws. For example, it requires that damage to a car exceed 80 percent of its value before it has to be labeled as a salvaged vehicle; most states currently have much tougher standards.
  • The bill even strikes down state laws mandating safety inspections on salvaged vehicles.