Critics say smash-up law allows older vehicles to swerve from ‘salvage’ tag
It makes no sense to Grand Junction auto dealer Bob Fuoco why Colorado would have a law allowing older vehicles that are in major accidents to be treated as if those accidents didn’t happen.
That’s why Fuoco is urging Sen. Steve King, R-Grand Junction, and other members of the Colorado Legislature to support a bill that would end the practice.
Under current law, a vehicle that is 6 years old or older and is considered totaled by an insurance company can avoid being labeled a “salvage vehicle” if it is fixed up and resold.
“If King opposes this measure, he’s on the wrong side,” Fuoco said. “I don’t understand why somebody would even fight to remove (the six-year limitation) other than the insurance companies because they are the ones that have to take the brunt of the decrease in value.”
Fuoco and Todd O’Connell, executive director of the Colorado Independent Automobile Dealers Association, said it makes no sense to have the six-year limitation, saying consumers often don’t know when a vehicle has been in a major accident until after they’ve purchased it, and paid more than it’s worth in the process.
They said more than 80 percent of the automobiles in the state are older than 6 years and the law is making Colorado a dumping ground for older vehicles that have been in accidents in other states.
“You can have a 5-year-old vehicle and a 6-year-old vehicle get into a head-on collision and have the same damage to both,” O’Connell said.
“The 5-year-old vehicle will get a salvage title, and the 6-year-old gets a clean title. That (older) vehicle can be rebuilt, and the consumer ends up with a vehicle without any knowledge that it was rebuilt.”
The measure cleared the Colorado House earlier this month on a bipartisan 42-22 vote, with two local lawmakers, Reps. Don Coram, R-Montrose, and Bob Rankin, R-Glenwood Springs, opposing the bill.
The only opposition has been from insurance companies, who say the bill would prevent motorists from purchasing cheaper vehicles.
Only one person, an executive with Farmers Insurance, testified against the bill earlier this month when it was debated in the House Transportation Committee, which approved it on a unanimous vote.
Since then, numerous insurance companies and insurance auto auction firms, such as Nationwide and the Property Casualty Insurers Association of America, have started to lobby against the bill.
Those insurance companies did not return calls for comment.
But O’Connell and Fuoco said the insurance companies’ concern for motorists to have more affordable cars isn’t their real motivation against the measure.
“Insurance companies won’t insure salvage vehicles,” O’Connell said. “They are going to lose money because when you sell a vehicle and it has a clean title, it will sell for more than a car with a salvage title. Therefore they get more from insurance policies.”
A vehicle is considered totaled if the cost of repair is higher than the car was worth just before the accident.
Both men said consumers can’t rely on such services as CarFax or AutoCheck because those private companies don’t always have up-to-date information about a vehicle.
Fuoco also said that when a vehicle receives a salvage designation, it no longer can be subject to equipment recalls, which often occur for vehicles that are older than six years. As a result, the vehicle’s owner would be liable for repairs.
On Tuesday, the bill, introduced by Rep. Max Tyler, D-Lakewood, and Sen. Nancy Todd, D-Aurora, is to be debated in the Senate Transportation Committee, a panel on which King serves.
The senator said he hasn’t made up his mind about the bill, saying only that he’s still doing his “due diligence” in getting information about it before deciding which way he’ll vote.
Meanwhile, a related measure, HB1100, is on its way to the governor’s desk. That measure “brands” certain vehicles on their titles if they were damaged in a flood, have had their odometers tampered with or are considered non-repairable.
It passed the House last month on a 59-3 vote, and cleared the Senate unanimously on Friday.