Colorado Bill Would Create 'Total Loss' Designation For Vehicle Titles

DENVER (CBS4) - Colorado lawmakers are debating whether to add a new designation to vehicle titles. It would give consumers more information about the used car they're buying so that they know if the car has been declared a total loss.

In 2014, Paul Bjork bought a used Toyota Tacoma pickup truck for $12,500.

"I needed a good reliable vehicle for living up there in the mountains," Bjork told CBS4.

He bought it from a dealer on Craigslist.

"He told me that he bought it at auction, that he replaced the fender, and he blended the fender into the door," Bjork said.

Nearly 2 years later, when he checked the value of the truck on trade-in, he got a big shock.

"They basically told me that they couldn't take my car in on trade because it has been totaled before," Bjork explained.

The truck Bjork is still paying his loan on is now worth a fraction of what he paid.

"Oh, it's gut-wrenching," he said.

The truck was totaled by an insurance company, sold at auction with a title that showed no problems, was repaired and then sold to Bjork without anyone ever disclosing the total loss designation.

A CBS4 investigation in the summer of 2015 showed the same thing happened to Annette Martin. She bought a 2005 Hyundai Tuscon with a clean Colorado title.

"I ran my own Carfax and right at the beginning it showed total loss," Martin told CBS4 in July of 2015.

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Martin got her money back on the car, but a state investigation of the dealer found dozens of collision cars sold with clean titles and no damage disclosure to the buyers. Ultimately the dealership was closed down by state investigators.

"Anything that the dealership has knowledge of they have to disclose," said Ron Kammerzell, senior director of the Colorado Enforcement Division which investigates car dealership complaints.

The Colorado Independent Automobile Dealers Association says that total loss cars are sold without the buyer's knowledge all the time.

"There are vehicles that are damaged 80 percent, 85 percent, 95 percent that are total loss vehicles, but they still remain with a clean Colorado title," said Todd O'Connell, the executive director of CIADA.

LINK: Colorado Independent Automobile Dealers Association

O'Connell put together a report showing various cars and trucks with significant damage. All of them have good titles, and all of them were up for sale at auction.

"The threshold for putting on other brands for Colorado is extremely high," O'Connell explained.

For a salvage designation on a title in Colorado, a vehicle must be damaged to 100 percent of its market value. New legislation calls for a total loss brand for titles of vehicles that the insurance company has paid out a total loss claim on.

"Having that extra brand on a vehicle … duplicative to a salvage brand doesn't really mean anything," said Carol Walker, executive director of Rocky Mountain Insurance Information Association.

Walker's organization opposes the bill. Walker says that the total loss designation is about economics and not safety and doesn't belong on a vehicle title.

"It has more down sides for the consumer than up sides having nothing to do with public safety," Walker explained.

Paul Bjork said that he would have liked to know about the total loss designation on his truck. He said that he wouldn't have bought if he'd known.

"In the end, I'm the one who's losing a ton of money," he said.

Libby Smith is a Special Projects Producer at CBS4. If you have a story you'd like to tell CBS4 about, call 303-863-TIPS (8477) or visit the News Tips section.