A new car-titling system from the federal government will save car buyers in the U.S. up to $11 billion a year, according to the Department of Justice. It's called the National Motor Vehicle Title Information System, and it was 17 years in the making.
NMVTIS is designed to virtually stop something called "title washing." Scam artists have made a big business out of buying stolen, wrecked and flooded cars for pennies on the dollar, hiding the damage and then selling them to unsuspecting buyers at full price.
Each state has different titling laws, creating a loophole of which scam artists take advantage. They'll retitle a damaged car in a series of states with different standards until the warning is gone — the title is "washed" clean.
In some cases, the results are life-threatening. Robert Ellsworth of San Diego knows that. His son was killed while riding in just such a car.
"He was a passenger in a salvage vehicle that had a head-on collision, and we later learned that the air bags did not deploy and were actually stuffed with paper," Ellsworth said.
A car like that should have a warning on the title that says it was wrecked and repaired. Under NMVTIS it's more likely such a warning will remain associated with the car's vehicle identification number. Because when one state reports a car as damaged, all the states will have that same information, almost instantly.
Stiff Opposition To Database
NMVTIS was created as part of the Anti-Car Theft Act of 1992, but it never got off the ground because of opposition from insurance companies, businesses that issue car-history reports, auto dealers and junkyard owners. Just about the only fans were law enforcement agencies and consumer advocates such as Bernard Brown, an attorney in Kansas City, Kan.
"No amount of persuasion would do — foot-dragging, politics — it's quite an awful story but at least we're here now," Brown said.
NMVTIS is still missing some key information, such as data about totaled cars from insurance companies and salvage yards. Only 36 states are submitting data so far; the rest will have to do so by the end of 2009.
"It will take us some time to get to the point where everyone is complying and all of the data is in the system," said Jim Burch, acting director of the Bureau of Justice Assistance at the Department of Justice. "But once we reach that point, consumers should feel very comfortable that the critical data is in the system and available to them."
Companies such as AutoCheck and Carfax offer car history information now, but those reports lack much of the insurance data NMVTIS eventually will contain. Both companies will be allowed to buy NMVTIS data and include it in their databases.