Auto loophole endangers Minnesotans' safety

Three years ago, Minnesota television station KARE 11 ran a report on a consumer who could have lost it all due to hidden damage to her vehicle. Marissa Cartwright's GMC Jimmy was her first car, a gift from her parents. They were horrified to learn that the vehicle with a clean Minnesota title that they had purchased as a reliable and safe car for their daughter had actually been in an accident so severe it had been declared an insurance total loss. And it hadn't been branded as a salvage vehicle to alert them to past damage, nor had it been fully repaired.

Marissa ended up in an unsafe car due to a law in Minnesota that exempts older vehicles from being branded as salvage. Fast-forward to 2020, and that same scenario is still playing out. Minnesota has done nothing to address the loophole that allowed Marissa and countless others to unknowingly drive previously damaged and potentially unsafe vehicles, but there is hope for a change.

While most states require salvage branding for vehicles that have been damaged badly enough to be declared as total loss by insurers, a handful of states allow older cars that have been declared a total loss to retain their clean title. In Minnesota, that loophole applies to cars six years or older or worth less than $9,000. Consumers in Minnesota and across the country are holding on to their cars longer than ever before; the average age of a car on the road today is more than 11 years old. With so many older vehicles on the road, many badly damaged vehicles are being resold with clean titles.

Information is critical, particularly for consumers making a purchasing decision as significant as an automobile. The history of damage to a vehicle has a direct bearing on its safety, its value and the cost of ownership. The Minnesota vehicle branding loophole takes that information out of the hands of consumers purchasing older or less expensive used vehicles, raising the question: Why should consumers who can afford newer cars have the right to know the accident history of the vehicle they are considering buying while those who can only afford older models do not?

Once a previously damaged but unbranded vehicle is cosmetically repaired and put on the market, the result is a severely damaged vehicle with an unbranded title being offered for sale to unsuspecting consumers. When this happens, the consumer loses, and the seller is positioned to receive much more than the car is actually worth as a result of the undisclosed damage history. The consumer may find that the vehicle is unsafe, may encounter unanticipated repair costs, or may find that the resale value or insurance recovery values are greatly diminished.

Minnesota lawmakers are now taking steps to right this wrong. SF 2224 will remove the salvage branding loophole, requiring that all vehicles declared total loss by insurance companies must carry a salvage title. It's important to note that salvage branding does not mean that vehicles can't be repaired and resold, it simply means that potential buyers of used vehicles of any age or value — not just consumers who can afford newer and more expensive used cars — are informed of past accident history through the salvage brand.

Today, a consumer looking to purchase a six-year-old automobile can be alerted to that vehicle's history through salvage branding, but a consumer purchasing a car that is seven years old is not provided access to the same critical information. SF 2224 would give all Minnesotans the right to know whether the used automobile they are buying has previously been totaled and allow them to make an informed buying decision. I urge Minnesota lawmakers to support this important bill.