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OATRA says bill, which would open auto salvage auction market to unlicensed buyers, could eliminate up to 2,500 jobs and endanger consumers.
Ohio auto recyclers demonstrated at the Ohio Statehouse in Columbus on Dec. 4 to show their opposition to Senate Bill 273, which they say would allow unlicensed buyers both in-state and out-of-state to buy vehicles from Ohio salvage pools and auctions. They contend that this would result in the loss of 2,500 salvage jobs and eliminate consumer protection.
The recyclers paraded severely damaged salvage vehicles around the grounds of the Ohio Statehouse to offer a firsthand look at dangerous vehicles that they say could be returned to the roads of Ohio and made easily available to criminals if the bill passes.
The Ohio Auto and Truck Recyclers Association (OATRA) says the bill would drive up the price of vehicles, increasing costs for smaller salvage yards by 20 to 30 percent. Insurance companies and auto auctioneers, however, support the legislation, claiming it would reduce insurance rates for Ohio consumers by making the market more competitive.
An identical bill was introduced in Missouri two years ago. According to consultant and appraiser Bob Smith, despite the fact that compelling testimony and photos were shown to the House Transportation Committee, it was “steamrolled” out to the Senate Committee and passed in less than 48 hours of being introduced.
“There was even an independent insurance representative who testified against it, saying that his clients/policyholders were being unfairly charged on their rates because those rates were determined by using the current NADA price at the time of policy inception,” says Smith. “But when a claim was presented and they found it was a rebuilt vehicle, they reduced the vehicle’s ACV because of being ‘rebuilt.’ Had it been devalued before policy purchase, there was a good chance the premium would have been less because of the lower value.”
The salvage dealers said the Missouri bill would enable unlicensed “offshore buyers” to purchase vehicles either in person or online, take the vehicle out of the country, rebuild it in any manner they chose, and possibly bring the vehicle back into the U.S. to be sold and operated on the roadways after not being properly repaired.