Hearings Focus on Cars Resold After Wrecks

In 1997 Tim Hagan’s elderly parents purchased the car of their dreams, a sleek 1995 Oldsmobile with just 12,000 miles on the odometer and not a scratch on the body.

The former owners, the salesman said, only gave it up so they could buy a fancier automobile.

A few months later on a trip to Washington state, the dream deal became a nightmare. “That car just shakes and vibrates,” said Hagan of Nevada City. “The hood vibrates all the time.”

An auto mechanic quickly made an assessment: The car was structurally damaged and could not be repaired. It had been, Hagan discovered later, in a head-on collision.

In California, 1.9 million automobiles on the highway--one out of 14--have been salvaged from major wrecks without any requirement that they be tested for structural damage.

Although the government does not keep any data showing how many are subsequently involved in accidents, the state Senate Insurance Committee began hearings Wednesday to determine if laws governing damaged vehicles need to be strengthened.

Hundreds of formerly wrecked vehicles are added to California’s highways each year after they have been sold for salvage by insurance companies that determined repairs would be too expensive. The cars are purchased, put in working order and then resold to consumers.

“We’re talking about a situation where cars are being sold that aren’t safe to be on the road,” said state Sen. Jackie Speier (D-Daly City), chairwoman of the committee.

To set the mood for the hearing, the State Bureau of Automotive Repair had hauled in salvaged cars on flatbed trucks and displayed them on the street behind the Capitol.

The bureau’s prize example was a 1993 Mercedes Benz that had been repaired after a major accident. Allen Wood, the bureau’s program manager, said it wasn’t until the owner tried to find out why the CD player wasn’t working that he discovered he had been billed nearly $8,000 for parts that had never been used and labor that had never been performed.

“The consumer has no way of knowing that under that shiny finish is a car that’s not really safe,” Wood said.

Although the committee focused on repair problems with salvaged cars, it also examined whether insurance companies encourage shoddy work by requiring mechanics to use cheap replacement parts.

Rocco Avellini, who runs an auto body shop in Hawaiian Gardens that specializes in investigating fraudulent repairs, blamed economic pressure from insurance companies for much of the problem.

He said many repair centers sign contractual agreements with insurance companies that require them to use cheaper generic parts in return for the company’s promise to steer business their way. “The only thing insurance companies look for is inexpensive repairs,” he said. “It’s purely economic.”

As a result, he said, cars are often repaired with inferior parts. He said consumers who drive these cars have been involved in a variety of odd accidents. One motorist had a wheel fall off as she was driving her children to school, he said. Another was driving down the freeway when her hood flew up.

But insurance company officials insisted that they only allow cars to be repaired with generic or used parts that have been thoroughly tested for safety.

Diane Colborn, a lobbyist for the Personal Insurance Federation of California, said the cheaper generic parts have helped firms keep costs and rates down. She said insurers randomly inspect cars to make sure they are properly repaired.