Lemon Cars Are Being Resold Without Disclosure---Nationwide Tracking System Is Needed
The problem of "lemon laundering" is explained in an excellent article in the Automobiles section of the New York Times that ran on 8.25.07. In the article Nancy Barron of KABOB points out that some repurchased lemon cars are a hazard to the buyers' safety.
There is plenty of blame to around for this problem. The manufacturers make excuses why buyers are often not being told about the lemon history of the vehicles ("lost paperwork"). The FTC looked into the problem in 1996, but then did nothing.
Only 19 states (including California) require the title of repurchased lemons to be branded "lemon buyback" or words to that effect thus making it easy for dealers to wash the titles. A major problem is the ability of car wholesalers and others to buy such vehicles and then obtain clean titles in other states, a practice known as title-washing. Of course, the consumers who buy such vehicles are the victims of this practice.
A solution to this problem would be nationwide implementation of the National Motor Vehicle Title Information System, which allows users to instantly check titles on all vehicles in states participating in the system. Using this system, the problem of lemon laundering and title-washing would disappear saving consumers millions of dollars. The System was authorized by Congress in 1992 as part of the Anti Car Theft Act.
The catch is that only nine states, not including California, have joined the system. Another problem is that, so far, consumers do not have access to the system.
Experts report that only $11 million would be required to implement the system nationwide. Congress so far has failed to appropriate the money. Why has not Congress taken this step? It cannot be the small amount of money involved so some influential groups must be against implementing the system. Let's take a wild guess--insurance companies and rental car companies that like to resell wrecked cars? Car dealers?
