Sunday, July 22, 2007

THE RIGHT THING: A LITTLE TOO MUCH INTERSTATE COMMERCE

Perhaps I'm not the ideal person to address this week's topic, which concerns automobiles. I live in a city. My wife and I own only one car, which she primarily uses to get to work. I rely on public transportation as often as possible.

Partly our choice to own only one car stems from the recognition that, as a city dweller who lives three blocks from a subway stop, I have other methods of transportation available. But another big reason is that the insurance premiums for my neighborhood are among the priciest in the city. I'd rather not pay such a steep price for a car that will sit idle most of the time.

When our kids were younger and we did own two cars, though, we paid those hefty insurance bills. It never crossed our minds to register the cars in some other town or state where one of our relatives happened to live so that we could cut our insurance premiums.

For one thing, it would have been illegal to misrepresent where we lived simply to get a lower insurance rate. For another, this is the neighborhood in which we chose to live, all its benefits and all its drawbacks included.

Most often the decision to play fast and loose with vehicle registration in order to garner lower insurance rates doesn't require such active deceit. Instead drivers who move into a new neighborhood with higher insurance rates choose to do nothing, rather than change their registration and pay higher premiums.

That's the case with a reader who moved from rural Tennessee to San Francisco, where the insurance rates are much higher. She continued to register her car in Tennessee.

"I believed that, as long as the car was registered in the United States, that it was fine," she writes.

A co-worker took issue, however, after my reader boasted that her premiums were less than a tenth of what he was paying for a similar car that he'd registered in San Francisco.

"He told me that my actions were patently illegal and unethical," she writes.

My reader has since left California, but she continues to be bothered by the accusation, which she believes was made simply because her co-worker was miffed that she'd found a way to pay less.

"Was registering my car out of state really unethical?" she asks.

In a word, yes. Her co-worker wins this fight hands down. In acting as she did, my reader cheated other San Franciscans who were paying their fair share.

What's more, she was breaking the law: In California, once she got a job, she was required to register her vehicle there within 20 days.

Laws vary from state to state as to how long you have to register your vehicle after arriving, but once you start living someplace you're obligated to register your car there. If you don't, you're subject to hefty fines if you're caught. And, if you should have an accident, you might have difficulty collecting from your insurance company. Furthermore, since all state departments of motor vehicles post their rules about switching registration online, there's no excuse for ignorance. (50 State DMV Links & Links to Canadian DMV Sites)

The urge to save money by taking advantage of what looks like a loophole is understandable, but the right thing for my reader to do was, and is, to register her car where she lives. Anything short of that is a lie.

She would have been wise to research the cost of owning a vehicle in San Francisco before moving there. If she couldn't afford it, she should have considered leaving the car home and using public transportation instead.

5 comments:

Anonymous said...

Ethical? No. Illegal? Yes. Fraud? Yes. This one is a no-brainer. And she knew her action fit into all three categories.

Anonymous said...

Mr Seglin:

I will agree that registering your car in a cheaper
state is "illegal," but "unethical?" I'm going to
disagree with you on that part, only because the
entire DMV apparatus is designed to violate the rights
of peaceful people by shaking them down for taxes and
controlling them through the licensing process.

NY license fees are probably much higher than Tenn,
and the insurance rates are different, too. Avoiding
plunder by the government is a laudable thing, in my
view.

Nowadays, our "laws" are no longer geared to
organizing a peaceful society, but to facilitating
legal plunder and control of the masses by the King.

There was a case here in California coupla years ago
where a guy registered a $1.5 million Ferrari and was
promptly assessed $300,000 by the DMV for the license.
The motorist took it to court, and strangely enough,
I never read about how the case turned out. I suspect
that the politicians got into the act and leaned on
the DMV to "get reasonable." License plates here are
based on the "value" of the car, and thus are all over
the place.

However, there is an aspect not mentioned: since
insurance rates are calculated based on the motorist's
ADDRESS, it would certainly be unethical in the
relationship with the insurance company. So the
insurance co. would be justified in refusing to pay a
claim for an accident that happened in NY if it could
be proven that the registrant was living permanently
in NY and thus increasing the risk for the insurance
company.

Registering a car in a cheaper state is also riskier
because the insurance company just might not pay the
claim.

You may know that there are political activists trying
to force changes in the ways that insurance rates are
calculated. They want the DRIVER to be INSURED based
on his driving RECORD rather than his ADDRESS. This
is a reaction to the outrageous rates charged in inner
cities against "the poor." Consequently, "the poor"
simply don't carry insurance. Many of "the poor" and
the "illegals" here buy damaged vehicles at low
prices, don't register or insure them at all, then if
the car is impounded, they simply walk away and buy
another car. Only a politician filled with power lust
would expect a motorist to pay $2500/yr for insurance
on a car that cost $1500 to buy.

This goes to show that when the state gets involved
with setting rates, and coercing purchases, the rates
become even more inequitable than if the free market
was allowed to function.

Back to the top: I recently bought a new dishwasher
at Sears. They offered to let me "register" it with
them, forever, at no charge. They would keep the file
on my ownership and tell me about recalls or repairs
under warranty, and I could communicate with THEM
about the machine for any purpose.

But the government DMV charges big money to register
our cars, then every year, they come back and want the
same payment AGAIN, and if I don't pay them, they send
a cop after me to impound the car and FORCE payment.
Does this sound like the way a free nation should
operate? That I should lose a $10,000 car over the
failure to pay a $50 license fee or a $25 driver's
license fee?

Why can't I "register" my car with the car maker? Or
the AAA? Or a car club of some kind? There's no need
for government to be in this business. The DMV is
nothing but a high priced Gestapo that violates our
rights, steals our money and our freedoms.

Don Hull
Costa Mesa, CA

Anonymous said...

Jeffrey Seglin splits ethical hairs every week in the New York Times, a newspaper that may as well be written by Osama bin Laden and Fidel Castro, so hateful and anti-American is its publisher and management.

It is the height of hypocrisy to preach "ethics" while on the payroll of Arthur Ochs Sulzberger, Jr.

When he was a young radical leftist (he is now an old one), he was arrested a second time for disobeying officers at a Vietnam war protest. His father then asked young Arthur who he would prefer be killed in battle in Vietnam, an American or a Vietcong.

"That's stupid," said the young leftist, "the American. It's their country."

Nothing has changed since then. Arthur Junior still wants the Americans, rather than the terrorists, to die.

How "ethical" is that, Jeffrey?

Anonymous said...

Many years ago when we moved from Florida to Maryland, I found that the insurance coverage required for Maryland was more extensive than that of Florida. We had moved from a less populated area with fewer automobiles to one where there were probably more cars than people. More cars and people meant more chances for accidents. All this also meant that the car insurance was higher. In addition, we also had to pay the ad valorem tax on the value of the automobile, and apply for a new title for vehicle. These items were just the expected costs of moving to a state with a higher population and a better road system. It would never have occurred to us not to transfer the registration!
(In Florida, it was a common sight to see local law enforcement checking apartment complexes for resident out-of-state car tags. One of my husband's co-workers was discovered, heavily fined, and required to obtain a Florida tag immediately with no grace time. He learned very quickly that the cost of not registering his car was much higher than if he had just done it when he arrived in Florida.)

M. Lawrence said...

+Is the heat causing all the nuts to bloom? It's a fairly simple question and Jeffrey is right. The woman knew she was in the wrong even as she tried to justify her decision, which ultimately benefitted no one but herself. (Unless, of course, she had had an accident and caused injury!)It has nothing to do with what Sears allows you to register or what the owner of your corporation did back in the '60s. Please folks, get a grip!

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