WASHINGTON, D.C. – Senior lawmakers, led by Rep. Cliff Stearns, chairman of the House Energy and Commerce Subcommittee on Commerce, Trade & Consumer Protection, recently introduced the Damaged Vehicle Information Act, H.R. 6093, to ensure that totaled and flood-damaged vehicles are flagged forever so that consumers and auto retailers can make more informed decisions about the safety and fair market value of used cars.

"Whether a car is flooded in Florida or wrecked in Rhode Island, total-loss disclosure would give consumers and automobile dealers essential information about these problem vehicles," said David W. Regan, the National Automobile Dealers Association’s (NADA) vice president for legislative affairs.

The NADA-supported House bill would rely on existing technology to permanently "red-flag" totaled vehicles. The legislation would require insurance companies to make commercially available the vehicle identification number (VIN) of a totaled vehicle, reason for the total loss (flood, collision, stolen, etc.), date of total loss, odometer reading on that date, and whether the airbag deployed. Sen. Trent Lott has introduced a similar bill, S. 3707, pending before the Senate Commerce Committee, which recently added new backers.

The estimated 500,000 vehicles damaged by Hurricane Katrina are only part of the problem. Insurance companies totaled approximately 5 million vehicles last year due to extensive damage, flooding, or theft. Thousands of these damaged vehicles are sold at salvage auctions, rebuilt, and re-enter the market with clean titles, so consumers, wholesale auto auctions, and dealers may have no way to learn about the total loss.

Flood-damaged vehicles are surfacing far from the Gulf Coast, but conflicting and confusing state motor vehicle title laws hamper efforts to spot problem cars. Both the House and the Senate bills would attack motor vehicle 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 require any change in state titling laws, but give consumers access to valuable information to identify totaled vehicles before potentially unsafe cars ever re-enter the market.