Car Dealers Seek Break From Handing Out Insurance Guide

Photographer: Daniel Acker/Bloomberg

NHTSA, which regulates auto safety and fuel economy, gathers data from an insurance industry group and provides the reports to auto dealers, which are responsible for photocopying the material should it be requested by customers. Close

NHTSA, which regulates auto safety and fuel economy, gathers data from an insurance... Read More

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Photographer: Daniel Acker/Bloomberg

NHTSA, which regulates auto safety and fuel economy, gathers data from an insurance industry group and provides the reports to auto dealers, which are responsible for photocopying the material should it be requested by customers.

U.S. auto dealers such as Autonation Inc. (AN) and Group 1 Automotive Inc. (GPI) want Congress to end a federal mandate to distribute a rarely requested booklet on car insurance costs, calling it an example of regulatory overreach.

Since 1972, dealerships selling new cars have been required to circulate the pamphlet, produced by auto-safety regulators, under the threat of a $1,000 fine. The catch: Consumers don’t ask for the information, according to a National Automobile Dealers Association poll that found 96 percent of its members didn’t remember the booklet being requested by customers.

“I have been selling cars the entire time this law has been enforced, and I cannot recall, nor can any member of my staff recall, any customer ever asking for this booklet,” Jack Fitzgerald, owner of Kensington, Maryland-based Fitzgerald Auto Mall, said in testimony at a hearing today in Washington.

A House Energy and Commerce subcommittee looked at the requirement during today’s hearing, which included the testimony from Fitzgerald as well as from a consumer group that helped push for the mandate’s creation four decades ago. The panel is considering a bill, which could be wrapped into a broader surface transportation measure, that would repeal the requirement that auto dealers distribute the data.

The U.S. National Highway Traffic Safety Administration spends about $70,000 a year to produce the report, Lynda Tran, an agency spokeswoman, said.

Photocopying Material

NHTSA, which regulates auto safety and fuel economy, gathers data from an insurance industry group and provides the reports to auto dealers, which are responsible for photocopying the material should it be requested by customers.

“We’re happy to continue providing it, but if it is no longer provided, it is available to the public through us,” said Russ Rader, a spokesman for the Insurance Institute for Highway Safety, which includes the Highway Loss Data Institute that supplies the data. “We already collect the data and we already publish it.”

Fitzgerald, speaking on behalf of approximately 18,000 U.S. auto dealers, said the requirement adds an unnecessary burden to NHTSA and car sellers.

“NHTSA has spent hundreds of thousands of dollars to produce and mail a booklet practically no one ever asks for that contains information generally unhelpful to new car shoppers,” he said in his prepared testimony.

Joan Claybrook, president emeritus of the advocacy group Public Citizen, said that consumers don’t request the booklet because they don’t know it exists.

“This consumer information requirement has suffered from a veritable conspiracy of silence,” Claybrook, a former NHTSA administrator, said in her testimony. “Neither dealers nor NHTSA make any effort to inform consumers about its existence or usefulness.”

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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