Congress Repeals Insurance Booklet Mandate at Car Dealerships

The U.S. Senate has approved legislation that would eliminate the requirement that new-car dealerships keep on hand an information booklet about insurance.

The bi-partisan legislation, H.R. 5859, endorsed by the National Automobile Dealers Association, passed the House in late July and now goes to President Obama for his signature.

Dealers have been hopeful that Congress would eliminate the federal requirement since 2011, saying the booklet is little value to consumers.

“None of my customers has ever asked for this booklet. If my customers want accurate insurance information for their vehicles, they should contact their insurance agent, who can provide insurance quote over the phone or via the Internet,” said NADA Chairman Bill Underriner, a multi-franchise dealer from Billings, Mont.

“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,” Underriner added.

In a survey of 815 of its members, NADA found that 96 percent of dealers reported that none of their customers had ever asked to see the booklet.

In a 2011 directive to Congress on a highway and vehicle safety bill, the Obama administration said the data in booklet is “rarely used and not useful.” The administration also stated “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.”

Under a 1972 law, the National Highway Traffic Safety Administration prepares, prints and mails the booklet, Relative Collision Insurance Cost Information, to new-car dealerships annually. Dealers are required to provide it to their customers upon request or face a $1,000 per violation fine.

The bill, H.R. 5859, does not eliminate the government’s ability to make the insurance data available online or by other means.

“NADA supports this bill because it eliminates unnecessary red tape on small business dealerships,” Underriner said. “New-car dealers applaud the leadership of Sens. Amy Klobuchar, D-Minn., and Roger Wicker, R-Miss., and House sponsors Reps. Gregg Harper, R-Miss., and Bill Owens, D-N.Y., to remove this obsolete government mandate.”

Source: NADA