An auto insurance law that affects dealerships has been repealed. This makes it easier on the dealerships, and really doesn’t affect customers one way or another. The last time your bought a new car, did you ask the dealer to show you an insurance booklet? I didn’t think so.
There was a law passed in 1972 that required the National Highway Traffic Safety Administration to do something that they would never be asked to do today (if it wasn’t for that particular law). What was the requirement? The National Highway Traffic Safety Administration had to prepare, print out, and mail, booklets called Relative Collision Insurance Cost Information to dealerships that sold new cars. This had to be done each and every year!
It seems strange to think about now, in the age of the internet. Today, when you want to find out the address of a new restaurant, the cost of refrigerator, the symptoms of a particular disease, or just which team won the game, you go online. A little bit of typing and clicking will bring you exactly the information you wanted to know.
Obviously, back in 1972, people couldn’t find information online, because the internet didn’t exist yet. At the time, computers were huge, took up entire rooms, and might have used punch cards or tapes. People probably went to the library to find out information that they wanted to know, or maybe they asked a doctor or specialist.
In other words, when the law was originally passed, it had value. Today, if we want to compare the rates of auto insurance from various companies, we go online, visit websites, and take a close look at the numbers. In 1972, people needed to see an actual, physical, booklet that pointed out the relative cost of collision insurance.
There was another part to the law. Dealers were required to provide the Relative Collision Insurance Cost Information booklet to customers that asked to see it. Dealerships that could not provide one faced a $1,000 fine per violation. National Automobile Dealer Association (NADA) Chairman, Bill Underriner, had this to say:
The federal government has spent hundreds of thousands of dollars since 1991 to print and mail this booklet to every new-car dealer in America, yet very few consumers ever ask for it.
Recently, President Barack Obama signed a law that repealed the outdated one. The legislation was called H. R. 5859. It passed the United States Senate in December of 2012 by unanimous consent. It was passed in the United States House of Representatives in July of 2012 by voice vote.
The Obama administration supported the repeal of the outdated law for a few reasons. It said the data in the booklet is “rarely used and not useful”. The administration also said:
A prospective buyer does not need a brochure from the federal government to obtain this information, since insurance agents are trained to provide advice on how model selection affects insurance premiums.
Image by dave_7 on Flickr