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Auto insurance book gets the ax

By Jay MacDonald · Bankrate.com
Friday, January 4, 2013
Posted: 10 am ET

Before purchasing a new vehicle, who would you turn to for advice on your auto insurance requirements and premiums? The choices are: A) your car dealer;  or B) your insurance agent.

It's a testament to increased consumer awareness today that most of us would choose B.

But 40 years ago, during President Richard Nixon's second term, Congress had little faith that consumers would see through a car dealer quoting them Ford Pinto insurance rates on a new Cadillac Eldorado just to close the sale. Lawmakers' solution? Require every new-car dealership across the land to make available upon request a booklet titled "Relative Collision Insurance Cost Information" -- or face a $1,000 fine.

The National Highway Traffic Safety Administration prepared and shipped these booklets to dealers through the eras of disco, punk, 1980s hair bands and '90s grunge. Even when that newfangled Internet thingy rendered the booklets largely obsolete by President Bill Clinton's second term, they kept shipping and car dealers kept stockpiling them in the unlikely event they should ever be asked for one.

Last week, the Senate approved a bill endorsed by the National Automobile Dealers Association and passed by the House last summer to put this superfluous pamphlet out of its misery. The bipartisan legislation gained traction in 2011 when President Barack Obama's administration noted it was "rarely used and not useful" and underscored the obvious: that consumers are now well enough informed to hunt down the information on their own.

True, this is one government mandate that will have few mourners. But the greater lesson here is that in its small, unread way, the pamphlet accomplished its mission. Even if few of us read it or even knew it existed, the car dealers certainly did and likely shaped up in response.

The primary goal of reform, after all, is to render itself unnecessary.

Follow me on Twitter: @omnisaurus

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