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Consumer safety is most compromised when laws fail
to track, limit and control salvage vehicles re-entering
the roadways and titles from being closed
. This short-
fall for consumer safety, state revenue, environmental
protection and a level playing field in business is ad-
dressed in detail in the newly released COMPREHEN-
SIVE VEHICLE BRANDING AND TOTAL LOSS BEST
PRACTICES GUIDE prepared by the National Salvage
Vehicle Reporting Program and authored by Howard
Nusbaum, an industry expert. The GUIDE was re-
leased on August 24, 2014; copies may be obtained by
contacting the NSVRP at
Administrator@NSVRP.org .Recently the Iowa Auto Recyclers Board of Directors
reviewed and prioritized the recommendations or Best
Management Practices (BMPs) in the GUIDE. The
GUIDE is a thorough study of the industry regulations
pertaining to automotive salvage. It is the “NSVRP
standard for states to consider to improve the integrity
and standardization of the title branding and to better
protect the public, with special emphasis on lessons
learned from the Hurricane Sandy, Colorado flooding
and other investigations of title fraud, inaccurate title
branding and other abuses.”
GUIDE
“The following is a summary of NSVRP-recommended
best practices guidelines, which are in our opinion fully
consistent with the American Association of Motor Ve-
hicle Administrators (AAMVA) best practice standards
on salvage, rebuilt and reconstructed vehicles, to help
ensure that damaged and total-loss vehicles are prop-
erly branded and to help close loopholes that are often
used to bypass the initial branding of damaged vehi-
cles and to reduce title washing of vehicles with
branded titles.”
GUIDE
1) All states should recognize at a minimum two
classes of salvage titles: one that allows for repair/
rebuilding and a second that is non-repairable (also
known as junk/parts only/certificate of destruction).
A) The triggers for each classification should be
reasonable and well-defined, based upon either a
cost of repair as percentage of ACV, or a specific
level of damage.
Iowa has both a Salvage Title and
a Junking Certificate designation.
2) There should be very few (if any) exceptions to
when a total-loss vehicle is required to have a sal-
vage brand. Depending upon the level of severity
that brand may be either a repairable or non-
repairable brand. A total-loss payout occurs be-
cause the insurer has determined that it is not eco-
nomical to repair the car and should be deemed as
proof that there was enough damage that a brand
is appropriate to alert a future buyer to prior dam-
age.
Iowa restricts Salvage Title Transfers to DOT
Licensed Auto Recyclers.
3) States should not have exemptions to branding
and unintended loopholes should be tightly policed
and eliminated. Common exemptions and loop-
holes include: A) Cutoff years beyond which vehi-
cles get exemptions from branding; B) Value under
which vehicles get exemptions from branding; C)
High fixed dollar amount of damage under which
vehicles get exemptions from branding; D) Exemp-
tion from included classes of parts (such as air-
bags) or classes of repair work (such as painting)
in calculating the costs of repairs; E) Linking the
calculation of non-repairable salvage to the eco-
nomic return from the sale of the salvage vehicle.
4) States should ensure that insurers and other own-
ers are not given the latitude to declare unwar-
ranted self-exemptions when making branding de-
terminations. Subjective branding definitions, lack
of thresholds, including branding determination lan-
guage such as, “as determined by the person who
owns the vehicle at the time of occurrence or by
the insurer or other person acting on behalf of the
owner,” or allowing damaged vehicles with missing
or incomplete estimates to be classified as any-
thing but non-repairable salvage all serve to leave
branding determination in the hands of insurers
and other owners, who have an economic incentive
not to brand, or to under brand, damaged vehicles.
5) States should include a flood title brand designa-
tion and total-loss flood vehicles should be consid-
ered as strong candidates for non-repairable vehi-
cle branding.
Iowa has a flood designation on titles.
6) Bio/chemical-hazard vehicles should be considered
non-repairable unless specifically addressed under
the state’s inspection and re-registration process.
Recyclers News Press
Page 12
Auto Recycling Manifesto
Comprehensive Vehicle Branding and Total Loss
Best Practices Guide