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Regulation on used car sales remains unscathed

April 10, 2012 |  7:31 pm

Car dealership

A controversial proposal to gut a new regulation on used car sales before it takes effect stalled on Tuesday in a Senate committee.

The regulation, described as the first of its kind in the country and scheduled to take effect in July, will require dealerships to place a red sticker in a car window if the vehicle was ever listed in a federal database as junk or salvage. It also raises document fees charged to car buyers from $55 to $80.

Carfax, which sells reports on used vehicles, and other opponents have continued to fight the regulation. A bill proposed by Sen. Juan Vargas (D-San Diego) would allow dealerships to purchase a report from a company like Carfax instead of requiring them to use the government database.

“Let the marketplace decide,” said Faisal Hasan, a lobbyist for Carfax. He said commercial reports often include more nuanced history about a car, such as accident information.

Other advocates said the federal database, called the National Motor Vehicle Title Information System, has more reliable information on whether cars were ever declared a “total loss” and might have serious problems. They also pointed out that buyers could still get additional reports from Carfax if they wanted.

The bill (SB990) died in the Senate Transportation Committee when two senators voted for it and two voted against it. There were five abstentions.

Assemblyman Bob Blumenfield (D-Woodland Hills), who pushed the regulation through the Legislature last year, praised the vote.

“As the nation's largest used car market, a lot was at stake for California," he said in a statement. “We already have the nation's best law on the books that is supported by consumers, law enforcement, and the auto industry. It just needs the chance to work."


Bill to raise auto dealer documentation fees gains momentum

California Legislature OKs bill to raise auto-sale documentation fees

Gov. Jerry Brown signs bill raising document fees on new and used cars

Photo: A salesman helps a couple look for a car in Glendale. Credit: Kevork Djansezian / Getty Images

-- Chris Megerian in Sacramento

Twitter: @chrismegerian