Sunday, January 31, 2010

Sunshine, The Free Market, & Used Cars

This week, we had an interesting debate on used car sales. In 1966, the General Assembly passed a statute requiring any motor vehicle suffering more than $1,000 of water damage to be "branded" as "WATER DAMAGED."

Early in my legal career, I did some cases regarding used car fraud. I actually litigated the first case decided by the Supreme Court of Virginia regarding the Virginia Consumer Protection Act. It involved the sale of a used car with a shoddy engine that was concealed from my client likely through the use of super thick engine oil.

Legislation was introduced this session to raise that threshold to $5,000 due to inflation. I had concerns about this. I'm not clear why consumer should not be given as much information as possible about what they are purchasing. This statute effectively gave a seller a green light to hide a significant repair. Hiding material information in a transaction is normally called "fraud" (misrepresenting a material fact in an effort to get money from someone).

Moreover, no one could cite me to any other states that had this rule. Some people run car titles through certain states to "cleanse" the titles. I was concerned that this statute would make Virginia a dumping ground for water damaged cars.

The statute passed 73-25 and now goes to the Senate. Hopefully, they will amend this statute.

My floor comments are below (which I apologize in advance were not more artful).

1 comment:

  1. Recommend instead you provide consumer education and get the government out of the business of mandating how private citizens conduct their business.

    Citizens don't need to be "protected" from everything.