A clunker protection act
Priced any used cars lately? The sticker amounts are not yet in the hefty $10 ,000 range of some new cars, but even many an obvious ''clunker'' is now selling for $1,000 or more. In fact, many recent-model used cars - thanks to strong demand for used cars during this period of economic difficulty - are now going for prices that until a few years ago would have been the cost of a spiffy product right off the assembly lines at Detroit.
Precisely because so many Americans have rediscovered the used car market it is difficult to grasp the justification of the US Senate recently in vetoing a proposed new Federal Trade Commission rule.
It requires used car dealers to disclose known defects in each car and tell customers whether it has a full or limited warranty or no warranty at all.
The rule - a modest one by all measurements - would not have required any formal inspection of the vehicle. But, say, the clamp holding the hood down kept coming loose, and a mechanic for the agency knew that for a fact when he opened and closed the hood. Why should the dealer not inform a potential buyer of the defective hood? Why, in fact, would a scrupulous dealer deliberately refrain from mentioning it - let alone any other problem that might have come to his attention? The industry argues that a suspected defect would require at least a rudimental inspection - an inspection that could make high prices higher. But would not most people risk paying more to be protected from buying a pig in a poke?
Sen. Robert Packwood, chief proponent of the FTC rule, was clearly on target in arguing that by vetoing such a modest proposal the Senate was in effect telling the public that ''we approve of shoddy dealers, we approve of cheats.'' The issue is not one of imposing unfair federal paperwork on used car dealers, an argument that has been raised repeatedly by the industry - whose lobby group in Washington has become the fourth largest in terms of campaign contributions.
What is at issue is whether or not there should be minimal disclosure standards for an industry that over the years has gone largely unregulated.
As Senator Packwood observed,''most used car dealers are honest.'' The problem has been that the industry has often been lax in taking action against those dealers who are not models of integrity.
The House is expected to take up the FTC rule later this week. Unless the House also rejects the rule, it will take effect. To follow the Senate in overturning such a minimal disclosure rule would be inexcusable. Perhaps House members should go price a few used cars before the upcoming vote and imagine someone in need buying one. A little exercise like that adds a quick new perspective on the whole issue of ''fairness.''