SPRINGFIELD, Ohio – Ohio’s salvage industry says proposed state legislation that would open the auto salvage auction market to unlicensed buyers could cost up to 2,500 salvage jobs and eliminate consumer protection.
Opponents of Senate Bill 273 say allowing unlicensed in-state and out-of-state buyers to purchase vehicles from Ohio salvage pools and auctions could cost jobs by creating unfair competition for the salvage businesses that are heavily regulated.
Salvage vehicles are typically ones that have been wrecked or damaged and deemed too expensive to repair. Salvage yards usually buy them to sell the parts.
The Ohio Auto and Truck Recyclers Association opposes the bill, which is says would drive up the price of vehicles, increasing costs for smaller salvage yards by 20 percent to 30 percent.
Association President Jim McKinney says the damaged cars are dangerous and could be sold to unsuspecting consumers, the Springfield News-Sun reported Friday.
Supporters of the legislation, which include the insurance industry and auto auctioneers, say it would reduce insurance rates for Ohio consumers by making the market more competitive.
Dean Fadel, vice president of government affairs at the Ohio Insurance Institute, says Ohio’s salvage vehicle market is the most exclusive in the country and the insurers who are the main producers of salvage vehicles in the state can only sell them to about 1,000 potential buyers.
But insurance companies in some states can sell salvage vehicles to anyone via online auctions with less regulation, the newspaper said.