WRECKED CARS LOOK GOOD AS NEW

Body work and a new paint job can make a wrecked car look good as new on the outside.

What you can't see in a salvaged car is its twisted frame, the cracks, its electrical problems and more.

"Lots and lots of wrecked cars are being sold ever single day in the state of California and huge numbers in San Diego," said attorney Hal Rosner.

Those wrecked cars are coming out of wholesale car lots where dealers go to find inventory. Rosner said some of the cars are seriously damaged.

"It's worse now than it's ever been," said Rosner.

Some car lots knowingly sell reworked wrecks. There is a potential for lives and property losses.

AN EXAMPLE OF ONE

Carlos Pina bought a 2005 GMC Envoy from a local dealership. According to Pina, the dealer said the car was in great shape.

"They said, 'Oh it's perfectly fine, there's no problems with it,'" said Pina.

A week later, the car started having serious issues. Pina said the Envoy was leaking transmission fluid and when he came to a stop, the car turned off.

Another GMC dealer's database eventually revealed the Envoy was in a front-end collision. Pina said there was no mention of the accident when he bought the car and when he confronted the salesman, he was shown a clean Carfax report, stating no accidents or damage had been reported.

CARFAX

Rosner alleged dealerships hid the damage.

"They get a list of the cars that are damaged cars being sold ahead of time. They check Carfax, find all the ones that don't have accidents reported by Carfax and buy those cars, knowing they are frame damaged or badly damaged," said Rosner.

10News acquired one of these lists. It reads, "Southern California Auto Auction," and showed 13 cars for sale including Malibus, Sebrings and Civics. The list also gives each car's mileage and damage history.

A 2000 Toyota Solara is listed for sale, "as is," with "frame damage." 10News checked the Carfax report on the same Solara. The report states, no accidents or damage had been reported to Carfax.

"Most are getting resold without any disclosures," Rosner said.

IT SHOULD HAVE BEEN A SOLUTION

Carfax information is limited to the databases the company can access. That's one of the reasons Congress passed a law requiring the creation of a new database for anyone's use. It's called the National Motor Vehicle Title Information system or NMVTIS. It will provide consumers with a report on a car's damage history including information from insurance companies and salvage yards.

The database was supposed to be up and running twelve years ago, but it's still not ready. Consumer group Public Citizen sued the United States Department of Justice to enforce the law Congress passed.

Attorney Deepak Gupta of Public Citizen said he's done a lot of research on the issue.

"We do know there were industry groups that were lobbying behind the scenes to stop this database from happening," said Gupta.

THE TRAIL LEADS TO ...

10News learned, Senator John Ashcroft of Missouri, the same state Carfax was founded in, questioned the value of the proposed database at the time.

In a letter to the General Accounting Office, Senator Ashcroft asked if the federal funding needed for the NMVTIS database was worth it.

10News researched campaign contributions to Senator Ashcroft from 1993 through 1998. According to the Center for Responsive Politics, Ashcroft's biggest contributor was Enterprise Rent-A-Car, donating $63,000 to his campaign.

It's reason to suspect that they were lobbying Senator Ashcroft aggressively on that issue," said Gupta

Rental car companies like Enterprise Rent-A-Car have thousands of used cars to sell. Some of them have been in serious wrecks. You can find these cars in auction yards across the country. That includes damaged cars with clean Carfax reports.

"They have a vested interest in being able to sell those vehicles," Gupta said.

The GAO asked the U.S. Department of Justice to respond to Senator Ashcroft's questions about NMVTIS, calling for a cost/benefit analysis of the program.

The Department of Justice issued a report in 2001, stating if fully implemented, the database would save four to 11 billion dollars a year. The net benefits would be, "substantial," the report said.

In 2001, Senator Ashcroft became the U.S. Attorney General, head of the Department of Justice. It was his job to launch the database, but he never did.

LIVES LOST, MONEY WASTED BUT ...

Now, a Federal Court has ordered the current U.S. Attorney General, Michael Mukasey, to have NMVTIS ready for public use by January 2009.

10News contacted John Ashcroft's Washington D.C. consulting firm six times for comment. No one has responded.

Enterprise Rent-A-Car said no one from their company lobbied Ashcroft on the issue of the NMVTIS database. They told 10News they want consumers to have the best information possible.

Carfax said no database is foolproof, not even theirs. A company spokesperson said they support the NMVTIS database 100 percent.

In an e-mail to 10News, the owner of Poway Chevrolet wrote:

"We made every effort to rectify Mr. Pina's issues to the point of making sure a full inspection of the vehicle and found no Damage as well as making sure we have a clear Car fax showing no negative marks, Mr. Pina has thus traded that vehicle in for a new HHR from us, by the way we purchased his original vehicle from a wholesaler and not a auto auction."