CARFAX has a problem with car disclosure bill

September 21, 2011 8:09:41 PM PDT
The governor has a bill on his desk that would give recession-weary car dealers extra cash, protect car buyers, and potentially save the state millions of dollars. 7 On Your Side looks into what is holding up this bill from being signed right away?

It seems perfect. You've got car dealers and consumer activists holding hands and all but singing "Kumbaya". We've never seen anything like this before, but there's another point of view.

If passed this new law would change the way cars are sold in California. Registration will be computerized, saving the state about $9 million a year. In exchange for doing that, car dealers will be allowed to increase document fees from $45 and $55 to $80 and if the car has been totaled the consumer would have to be told.

"Before they can offer a used car for sale, they'll have to check the federal database to see if it has a branded title like flood, salvage, non-repairable or lemon law buyback. Then they have to put a warning sticker on that car," said Rosemary Shahan from Consumers for Auto Reliability and Safety, or CARS.

The red sticker would have to include the words "warning" and "junk salvage". And that's the sticking point; not the sticker -- everyone agrees that's a good idea -- but the database. The law has dealerships checking only the federal data base when there are private options including AutoCheck and CARFAX.

"We're all for disclosure. We completely endorse the concept of disclosure. It is just to mandate the means for disclosure, I think, will limit consumers and dealers ultimately," said Faisal Hasan, CARFAX's national director of governmental relations.

Hasan testified before a state senate committee. He says it all comes down to choice. That dealerships and consumers should be allowed to choose the best vehicle history report, to choose between the federal data base, nicknamed NMVTIS, and private providers.

"Our whole point here is disclose, absolutely. They want to use NMVTIS, AutoCheck is up here, they want to use AutoCheck, they want to use CARFAX, that's fine, just disclose, but have a choice in that disclosure," said Hasan.

"CARFAX and AutoCheck and some others are very good products and I don't want to disparage them anyway, because if I am buying a car, I am going to get those products, because they give you additional information," said Assm. Bob Blumenfield, D-Los Angeles.

Blumenfield wrote the bill and says the federal data base isn't the end all, be all, but it is important.

"This is good information that would be disclosed and it is the only information that is federally required," said Blumenfield.

There is no word on what the governor plans to do, he has till Oct. 9th, but we will keep track and report back.

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