AB 1215 Harms Consumers, Business & Doesn’t Make Sense
By Bob Pacheco, State Assemblyman, Retired
Ronald Reagan once joked that an economist is someone who sees something happen in the real world and wonders if it will work in theory.
His point was that policymakers spend too much time focused on theory and too little focused on what really works. A prime example of this is going on in the State Legislature right now. AB 1215 is supposed to be about giving consumers the information they need to buy a car. Except it doesn’t do that. Instead, it mandates that car dealers only obtain a federal government issued report known as the NMVTIS vehicle history report. But the NMVTIS system was never intended for use as a sales tool for sellers of used cars. Its best use may be to just assist government and law enforcement in fighting vehicle fraud.
Dealers know that other more comprehensive and more accurate reports are available from privately-owned commercial databases that provide incentives to mechanics and insurance companies to keep detailed records of cars that have been worked on. These commercial reports will list, in detail, crucial items of information on whether the vehicle has been considered salvaged, been in accidents, considered totaled, and many other issues with the safety of a car.
By excluding the use of commercial databases available, dealers will rely only on the faulty federal database because AB 1215 provides no incentive for dealers to provide any other report on their vehicles – even if it is a better report. Additionally, a provision in the bill states that dealers will not be liable if the information in the mandatory report is inaccurate. So if you read a report that said a car’s airbags had never been deployed, and then you are in an accident, and guess what, the airbags don’t work, you can’t go back to the dealer to hold them accountable for providing misleading information on the safety of the car.
Furthermore, AB 1215 isn’t just ineffective; it’s expensive. This bill would cost money to consumers by nearly doubling a government “fee” to the price of a car. We all know the State of California is experiencing budget cuts due to a loss of revenue. With this measure the legislature has discovered a new way to raise taxes by calling it a Government Report. More importantly, the NMVTIS vehicle history report system has stated it needs more revenue to continue operations. In fact it was stated that it is crucial to the success of NMVTIS that new applications be developed to generate more government user fees.
The California Legislature in promoting the measure has stated that by becoming the first and largest state in the country to require the use of NMVTIS vehicle history reports by dealers in retail used vehicle transactions, this act will not only benefit the California consumer, it will also strengthen and financially support NMVTIS. Thus, it appears that the purpose of the proposed legislation is not so much to protect consumers but rather to help generate more revenue for the state.
I believe in supporting dealers whenever possible. But, Dealers should be encouraged to review the different vehicle history reports that are available and determine which ones will provide the most transparent and best information for their customers. Unfortunately AB 1215 will discourage such thorough review for consumers rather placing a government-induced incentive to only provide a federal report that has been proven to not give the customer the full vehicle history of a used car.
The idea of AB 1215 may sound good in theory; but in reality, it’s bad for business and bad for California. I encourage our state legislators to amend AB 1215 to include the use of commercial vehicle database reports as an alternative to the NMVTIS, an inappropriate database to rely on vehicle safety information.