A new law in Utah that opens up the purchase of salvage vehicles to the general public is being criticized by the Automotive Service Association as being anti-consumer and not in the best interests of the collision repair industry.
Utah Senate Bill 193 was signed into law last week by Utah Gov. Jon M. Huntsman Jr. It expands the state law on who can purchase salvage vehicles and what is required to obtain a salvage buyer license.
The revised law expands who can purchase salvage vehicles to include any out-of-state or out-of-country buyer that is authorized to purchase salvage in their respective jurisdiction; to any in-state buyer registered to do business in Utah that has a Utah sales tax license; and to any public buyer with a purchase limit of five vehicles per year.
“This new law is not helpful to the collision repair industry or to consumers,” says Bob Redding, ASA’s Washington D.C. representative. “The price of a salvage vehicle could increase, pushing more vehicles into the salvage pool, thus fewer repairs. We will see more vehicles and parts vehicles taken out of the marketplace, which is not good for collision repairers.”
A series of articles in ABRN examined the total loss quandary facing collision repairers, and increasing salvage prices is one factor leading to more total losses. Click on total losses to see a list of those articles.
The Utah law allows the general public to purchase salvage vehicles, without any additional constraints on how those vehicles re-enter the consumer marketplace. Private owners or rebuilders who acquire salvage vehicles are not under as much scrutiny to repair vehicles to original equipment (OE) standards as professional collision repairers. This can lead to shortcuts being taken, such as airbags not being replaced to OE standards. Consumers buying these rebuilt vehicles must be cautious because most states don’t have laws protecting them in this situation.
“There is a risk of vehicles being placed on the road that should not be, without significant inspection and repair,” Redding says. “Generally, our state inspection laws are not sufficient to protect the motoring public from these types of transactions. Those in less-developed countries will have even fewer consumer protections.”
Insurance Auto Auctions (IAA), a North American automotive and specialty vehicle salvage auction company, said it led the effort to amend and revise the Utah law and lobbied for its passing within the general assembly.
“The revised laws will continue the responsible expansion of the salvage industry and ensure a healthy, competitive bidding environment for vehicle sellers and buyers,” the company said in a press release.
“We are pleased with our revision efforts and the passing of Utah Senate Bill 193,” says Tom O’Brien, CEO of IAA. “The continued success of the salvage industry depends on its ability to grow and the continued support of a robust selling, bidding and buying environment.”
IAA said it works with state and federal governments “to facilitate legislation and regulation that ensures responsible business conduct and continued healthy expansion of the salvage auto auction industry.” IAA is in the process of reviewing bills in several other states to benefit the salvage industry.
“Utah is not the only state with this bill introduced,” Redding says. He encouraged collision repairers in other states considering the bill to speak out against it by writing their state representative or by working through state or regional associations that represent their interests.
