The Politician and the Mechanic are Still Conspiring to Rip Me Off

Mark Gibson writing in the Washington Post:

Virginia has a personal vehicle safety program overseen by the state police that cannot be shown to enhance public safety. The people who perform inspections are often the same people who fix any identified deficiencies. By contrast, neighboring Maryland requires only that a safety inspection take place upon transfer of ownership. That’s a reasonable consumer protection. The District does not require safety inspections.

A government program that requires the purchase of a good or service in return for a nonexistent public benefit is illiberal and anti-consumer. Two-thirds of states see no need to impose the burden of annual personal vehicle safety inspections on their citizens; Virginia should end its inspection requirement.

Tyler and I have been writing Marginal Revolution for 13 years now and one of the disadvantages is that you learn how little has changed. I first wrote about this absurd government program in 2003:

Virginia requires yearly “safety” inspections of automobiles. Yesterday, it was my turn – it cost me $15 bucks and an hour of my time. What a pain. Merrell, Poitras and Sutter estimate that nationally inspection programs cost in excess of a billion dollars a year (I think this is a serious underestimate – see below). What do we get for our time and effort? Not much. MPS find that mandatory inspections do not reduce highway fatalities or injuries. Not surprising really since there are already good incentives to maintain one’s car and accidents are most often caused by factors, primarily driver behaviour, that are not inspected. (By the way, yes there is an externality but if self-interest alone causes you to replace a broken headlight then on the margin the externality is irrelevant – economists often forget this point.)

MPS arrive at the billion plus figure by summing inspection fees and travel time. But the major cost of the inspection system, in my opinion, is unnecessary repairs. Mechanics have an incentive to indicate a car needs repairs and it is difficult to know when they are speaking the truth. This problem is bad enough when you have brought your car to the mechanic voluntarily – at least then you know the car has a problem. But the potential for opportunistic behaviour is worse when you are required to take your car in for inspection and if you don’t follow the mechanic’s advice you fail. The mechanics know they have you over a barrel and act accordingly.

About the only thing that has changed is that now I spell behavior differently.

Comments

Considering you favor bans on guns so that people can't use them to end their own lives, it's hard to care about marginal car costs.

Even if cars were banned completely, or taxed by hundreds of thousands of dollars a year, you would still have more existential liberty and self-ownership than you are willing to grant others.

The rest of the world will be in eternal amazement about that segment of Americans who value their guns above just about anything else on the planet.

The rest of the world should spend more time wondering why we're so much richer than they are, and less time pondering their own moral superiority. I for one don't intend to spend one second worrying about whether the Germans approve of me.

I'm German, and I agree. Remember, it's the American "libertarian economist" Tabarrok who doesn't want you to own guns lest you choose to end your own life with them.

"The rest of the world should spend more time wondering why we're so much richer that they are..." As this is a blog curated by professors of economics perhaps you should think about this statement a little more closely. As US citizens haven't had a pay rise (inflation corrected) for about 40 years this sort of hubris is jarring to say the least. And Europeans don't face bankruptcy when hit by catastrophic illness or injury: this could be regarded as a hidden social benefit underpinning their total compensation package. 'Richer' is such an elastic concept isn't it?

"Free-er" is not.

The US has 20% of GDP. More than half of US earners are in the top 1% of earners worldwide. It is absurd to believe that people in the US haven't gotten richer in the last 40 years. Compare the lifestyle at any decile of income in 1975 and 2015. There is no comparison. Those in 2015 are much richer.

Or they could just look at Singapore and Japan.

Vehicle inspections in Japan are much more strict. If you're missing your car's cigarette lighter, you flunk.

Most of us can walk and chew gum at the same time. In this case, eternal amazement at the obsession with guns, and also wonder whether there may be worthwhile lessons for growth without sacrificing on certain values.

Great post. And he's whining about $15. Come to MA where it's $40.

Wildly unnecessary government control is generally fine with Tyler and Alex. Unless it inconveniences more than it allows them to knowingly nod in smug approval.

Now, go buy some $4 light bulbs that contain mercury, lest your nighttime bathroom trips affect the weather more than the sun does, peasant!

It's only $35 in MA.

$15 per annum and you get your bowels in an uproar?

Allow me to invoke a much better example of highway robbery:

http://www.amazon.com/Modern-Principles-Economics-Tyler-Cowen/dp/1429239972/ref=asap_bc?ie=UTF8

US$225

For an economics intro textbook.

The mind reels.

Where's the law dictating that it is mandatory to purchase it?

This is a lame non sequitur.

No, it really isn't. It's about consistency and priorities.

Generalizations are not good.

Mr. Gibson does not tell the car age. In other places, safety and pollution checks start when cars are 2-3 years old, then every years until 10 years old and become yearly when the car is 10+ years. If the Virginia law is really stupid, there should be yearly checks for every car, even new ones....but this is not stated in an explicit way. Mr. Gibson ambiguity does not help his cause.

Also, this part is fun: " The people who perform inspections are often the same people who fix any identified deficiencies.". The same way as doctors, dentists, plumbers, electricians, hair dressers, universities, personal motivators (coaching). The independent audit is aimed at more important things such as the accounting of publicly traded companies, not the mechanic's invoice.

As the owner of a car in good conditions, I understand a yearly check for cars less than 5 years old is an excess. Otherwise, I visualize Mr. Gibson as the high school jock that demands grade inflation because it's too difficult. Yearly may be too much, but getting rid of inspections is the other extreme. There may be a middle ground solution.

Getting rid of compulsory, mandated inspections is extremist because...?

...because there are public benefits of vehicles in good conditions: minimize air pollution and better road safety. Both of them are externalities of motor vehicles.

-1

Alex dealt with that argument in the post.

Not with the emissions part.

And his point about self-interest hardly applies to everyone. Have you never seen a car with one headlight out?

I see the concern. But, Alex just quoted the Merrell et al. article that uses data from 1983 to 1991 to arrive at the conclusion of "inspections have no effect on fatality rates".

But, things have changed since 1991. ABS and airbags were installed in a few models by that time. Electronic Stability Control came later. People on the other side of the Atlantic say inspections are required to make sure theses systems work when the car is 6+ years old. http://ec.europa.eu/transport/roadsafety_library/publications/autofore_final_report.pdf

Agree with Alain. First, how do safety inspections minimize air pollution? The test I have in NY State doesn't look at emissions. The emission tests I had in the Detroit metro area didn't look at safety (plus you were told to drive the car around for an hour first so it would pass the test). Second, no one has told me how replacing a burnt out rear license plate bulb improves safety.

Yeah I doubt there is any car that can't pass the emissions test after warming up for an hour- as long as the check engine light isn't on

This was about safety inspections. As Alex pointed out, there is no evidence that yearly inspections increase safety.

Emissions tests are a separate thing. You can have one without the other. Emissions tests should also be subjected to cost/benefit analysis, though. Emissions equipment is designed to last about 10 years, so testing for newer cars is unlikely to make sense.

I have lived in Virginia for 12 years, and have never been taken advantage of in the auto inspection. Have gone to many inspection stations, and if a light is out they let me know and replace it. One inspector said there was a problem with a nut being stripped on my wheel, and that he could fail me, but he passed me and told me to get it fixed ASAP. To suggest unnecessary repairs are rampant would be overblown.

The fact that Virginia makes car owners pay property taxes on automobiles is much more ridiculous, in my opinion.

Your anecdote - about your personal experience - is enough to disqualify the claim that repairs are rampant?

My anecdote is actually more than 20 data points. One for each year and each car my family owns. Which is 20 data points more than Alex used when claiming unnecessary repairs are the biggest cost of the system.

20 anecdotes is not data, particularly when some of those data points involve the same inspector.

And they all involve the same person getting the inspection done. The story is that people who look like they don't know anything about cars (mainly women) are the ones who get ripped off.

Of course, this is all anecdotal on both sides. It would be nice to have some actual evidence.

The claims of State inspections causing the selling of unneeded repair is anecdotal.

To prove that State inspections are the cause, you need to prove there is no selling of unneeded repair when replacing tires, changing oil, repairing brakes, exhaust system, shocks, ...

I live in NH and previously in Mass, and the way inspections are done, it's hard for your car to be held hostage. The car would need to be so bad the police would impound it if you were stopped on the road. You pay the same fee pass or fail. You have 10 days or the end of your old inspection to get it repaired anywhere, and reinspection in is free.

On the other hand, stories of people going in for "free" tire rotation only to be told they needed thousands in repairs were far more frequent, including cases of drivers calling the police when the shop would refuse to lower the lift on a free tire rotation or vehicle check were much more common than reported abuse of State inspection.

After 10 years of getting multiple used cars inspected, I can tell you that there is no doubt that shops use the inspections for bogus repairs... some worse than others.

I know this because I am an amateur mechanic that doesnt look like one (its even worse when my wife takes the cars in). I have seen everything from fictitious exhaust leaks, BS brake repairs, BS claims about needing fender running lights (which new models dont even have), claims about bad bushings that were no where near bad (no vibration, no slack in steering, no wiggle in the steering).

The only thing I get out of safety inspections is that over time, one learns which shops are more honest than others.

I don't quite understand the thought processes of people who vote for programs that cause inconvenience:

If you want your car inspected by a mechanic once a year, just do it! I don't see the logic in giving someone else the power to compel you to do the thing you think ought to be done.

Same for bottle deposits: We already put out recycling bins, what is the deposit achieving? All I know is that I would have to go to a great deal of effort just to break-even.

It is likely the public did not vote for this. Such diktats are conceived and supported by special interest clients and imposed on the public by their political patrons.

None of the "public" votes for the hundreds of thousands of government rules that torment and hobble American society.

Alex and Tyler express genuine puzzlement at "how little has changed" in the daily lives of Americans under arbitrary & oppressive rule of politicians.
My, My ... what could be the problem? Surely the ritual of voting & elections puts the public firmly in charge of things... so there must be some other root problem invisible to PhD's. What could it be ??

No one ever demands government prevent crimes like their children being hit by drunk drivers, or hit by vehicles with poor driver visibility due to obscured windows, bad headlights, or by reckless drivers of poorly maintained taxis, vans, and buses, because parents always consider all children, especially their own as goods cheaply replaced by having sex.

MADD is simply a fiction created by faceless unelected government technocrats.

School buses are yellow simply due to the power of the government yellow paint production department. And they have swing arms and flashing lights due to the government railroad crossing division creating business for their government factories.

Somehow, some radical anti-taxers imposed those bottle deposit laws to kill the jobs in the government liter picking up division. Millions of government workers have had their jobs taken away by the deposit laws. Plus government is no longer able to take your land to dump mounds of trash on by a private sector conspiracy to profit from handling your trash.

We definitely need to get rid of the environmental laws on waste by having millions of government workers collect it and then dumping it on land the government takes from poor people in the middle of where the poor live. The private sector should be cut out waste management by having government do it all with government workers.

After all, markets are bad for the economy because nothing most people want for free are never found in markets.

This all depends on what "such diktats" are. You've listed a whole mess of things, most of which are quite different from vehicle inspection.

The deposit is effective in recruiting indigents to clean up litter.

Replace vehicle inspections with a tax that is a function of the total miles driven in the year, the more miles driven the higher the tax. The tax could be used to address the cost of traffic congestion (including road construction and maintenance) and pollution caused by cars. It's those who use cars the most who cause the congestion and pollution, and the tax would impose at least part of the cost on them. Toll roads serve a similar function, but they are highly inefficient. I recently read a piece on the history of roads - to my surprise, the construction and maintenance of roads was not initially considered a public (government) function. The shift in public attitudes was, and this was not a surprise, promoted by . . . . the oil and auto industries. Of course, today it is inconceivable that the industries who profit the most from cars would be responsible for paying an essential cost of using them. Okay, I've commented many times on how the construction of the interstate highway system transformed the South - for the better. But that was then: today, I-95 is like a parking lot on holidays and during the vacation season. Here's an idea: stop building and maintaining roads. If the oil and car industries want to build more and to maintain existing roads, let em. Sell the existing roads to them at a reasonable price and let them decide how much to charge those who wish to use them. If they believe cars who use their roads need annual inspections, so be it.

""""Replace vehicle inspections with a tax that is a function of the total miles driven in the year, the more miles driven the higher the tax."""

Why not just have a tax on people who don't have a lot of money or who don't want to go into debt buying a new car?

We also already have a tax on vehicle use, its called the gas tax which is supposed to pay for much of the road construction and maintenance, though some of it is diverted to things like bike trails and mass transportation. If bike trails are needed then tax bike owners, if mass transportation is needed tax the riders

Gas taxes don't cover nearly the full costs of roads, although in theory they should be set high enough that they do. Cyclists subsidize roads rather more so than the other way around.

Gas taxes, once all the bike trails, ect, ect are taken out do not fund the full cost. They come pretty close when they are used for only roads.

If there is a discrepancy, I would favor a tax increase to cover it.

You know what that would do for my carbon footprint? Even dumber than cash for clunkers.

I have to disagree (I'm a Fairfax County resident). My cars have failed 2 or 3 times since I've lived here (over 30 years), and I've never had the same guy who did the inspection do the repairs (except for minor things like replacing burned out bulbs, which I can easily verify as requiring replacement). First, they have never been my regular mechanic (who does not perform inspections), and second, I'm usually not in a position to leave the car to do necessary repairs. I doubt most people are. While I think you are correct that there are inherent moral hazard issues in "diagnosis-cure" situations, I worry much more about this when I've had to take my car to a mechanic whom I don't know for something like an oil change or a 30K mile maintenance. That's when you get the phone call telling you that they found all kinds of other stuff that needs fixed.

Here in Mass., we get the same privilege for $35, and the inspection is also performed at private businesses. If you go at the right time, it can take as little as five minutes. I'm not sure if that is good or bad... Plus, our state further invests in helpful information on its own website to tell us of the great things the inspection infrastructure is doing for us. On the plus side, we were able to vote down an increase in the bottle deposit. So unlike the vehicle inspection fee, which constantly increases, our empty bottles cost us the same as they did decades ago. http://www.vehicletest.state.ma.us/motorist_questions.html

What's the penalty for not having an inspection and what's the likelihood of having to pay it? With my previous car, I didn't even realize I needed an inspection and went 10+ years without one.

In Ohio it's not a safety inspection, but an emissions. No test, no plates.

Some fine. If you park on a public street it's pretty likely you'll get a ticket sooner or later.

Sooner or later?? I am a professional at getting tickets for expired safety inspections. I'd say the average length of time you can go without a ticket is 3 weeks past due.

Virginia has a "citizen legislature" that gets paid very little for their job. As such, almost every Virginia state legislator does not work full time as a politician, but has a day job. Many are lawyers, many work in the car industry in some capacity (e.g., auto dealers), etc.

I wonder if this aspect of Virginia law contributes to protectionism in the state. Your mechanic and state rep may be one in the same.

We have annual inspections in NY. If you don't have a current, color-coded inspection sticker on your windshield you will be ticketed. If your insurance company learns of failure to inspect it could cancel your policy.

The solution is to bring your vehicle to a mechanic who you trust. Use the same shop for periodic services and repairs, if they are good mechanics and decent people. Don't do business with a mechanic that rips you off.

Women often have more problems here than men: send your husband, brother, father or gay friend.

The global issue is far too much government involvement (public safety is the alibi of all tyrants) in far too many aspects of the lives of we the people.

'public safety is the alibi of all tyrants'

And yet, oddly enough, when it comes to air travel, we all seem on board with enforcing public safety - everyone their own little tyrant, apparently.

Yeah, the TSA gets a lot of love around here.

Here I was, thinking about the entire airworthiness certification process, and the extensive mandatory documentation of parts sourcing, maintenance work, etc.

But if you think TSA has anything to with 'public safety,' that is your assumption to make - based, admittedly, on the fact that what I took for granted concerning one of the most highly regulated industries in the world, one where virtually no one is asking for such burdensome regulations concerning aircraft certification/maintenance to be lifted.

Obviously because no one even knows about it

When I traveled for pay, I was on the clock (it wasn't my time or money) and it wasn't an issue.

No more. Once I was flying to the same place each Monday AM for eight weeks. The same TSA agent frisked me each Monday morning for eight weeks.

It was no fun: having two titanium knees, I trip the metal detector and always get frisked: they stopped using the wands with the new X-Ray machines that aren't at most airports.

I fit the profile: male, white, over 60, and overweight.

Now, I don't fly. I travel by other means.

What about emissions inspections? The AAA site linked in the OP is interesting. I see that if you live in Northern Virginia you are required to get an emissions inspection every other year once the car is 4 years old (which would be a more reasonable time to have safety inspections start if requiring them at all).
California has emissions inspections in some counties that start at 6 years old, but no safety inspection. They used to start earlier when I lived there, 2 or 3 years old? so it's interesting to see that they've had the flexibility to adjust. Perhaps the Virginia legislature has some vested interest in inspections that is missing in California.
Personally I'm more offended by Virginia's ban on radar detectors (the only state that does so, DC not being a state). I don't use one, but this strikes me as much more overbearing.

Worry not Alex, I'm sure the Bureau of Consumer Protection will get on this right away.

I live in Indiana, which doesn't have safety inspections, for which I am grateful. It would be interesting to know whether cars here are any worse than those in the states that do. I'd bet not, if there were some way to find out.

Another good Canadian has been ruined by his time in the evil US.

This should be voluntary and run by insurance companies, with discounts for people who comply. There should be similar programs for compulsory gun insurance, with discounts for safety training, locked gun cabinets, etc.

compulsory gun insurance!!
Surely gun worshippers will never allow that because.....wait for it...it would mean registration ....and...registration is just a prelude to confiscation.
I've been registering my cars for 54 years and...so far..no confiscation.

I'm unaware of any movement to confiscate cars.

The argument gun-rights advocates make is not "Any time anything is registered, it is because people want to confiscate it."

Suggest that state liquor laws impose more significant burdens, are more arbitrary and corrupt and less justified by safety concerns. Do various states' police still park in out of state liquor store lots to track car plates? Blue Laws : 2016. Imagine state troopers parked outside an abortion facility or NAACP meeting?

Oh. A technical point. The $15 you pay is not a cost in the economic sense. It's a transfer. As is the cost of unnecessary repairs.

The economic costs are the time spent by you and the mechanic, and the value of any parts that are needlessly replaced. I'd think MPS would know that.

OTOH, I go to a mechanic I trust, who has never, in many years of inspecting my car, suggested a repair.

Interests in safety are not symmetric. A 70 year-old retiree on a fixed budget and driving a 15 year-old truck has far less interest in maintaining that vehicle than a early-30's couple with two young children. Opportunities for externalities abound.

There is no question that there are negative externalities and moral hazard at play. The question is whether the state program reduces such market failures proportional to the cost.

One obvious alternative is biannual inspections for the first ten years of a car's life and annually thereafter. That would reduce costs with minimal reduction of the benefits.

Germany has the dreaded Tuv which is ghastly costly and rigorous. In effect, this is a subsidy to Daimler, BMW, VW, Porsche, Opel and Ford because older cars don't generally survive the Tuv.

Challenge the law under the state administrative procedures act, if it exists.

One thing I do appreciate about the annual inspections is that it's quite rare to be pulled over for a missing bulb in Virginia relative to states that don't have inspections. Also my anecdote is that a Maryland car with bald tires slid into my parked car in Virginia totalling it.

You think auto inspections are crazy, think about the hoops required to get a salvage title back on the road in some states. Particularly because for some lower end cars a minor fender bender can result in the car being salvaged. It is not strongly correlated with the damage to the car, so some states are liberal in letting cars on the road, others are excessively strict.

When I moved from Louisiana to Virginia, my car wouldn't pass inspection, and rightly so. It wasn't safe. Have had many clients who bought cars in Virginia, passed Virginia inspection by seller, but wouldn't pass inspection in Maryland. I have my car inspected in Virginia when I bring it in for maintenance to a mechanic I pretty much trust. From what I've seen, there's more issues with cars passing inspection that shouldn't than failing inspection by greedy mechanics, although that does happen. Face it, you take care of things, many do the least they can to get by.

BTW, Tyler, Backlick Road Service Station in Annandale is very good. Highly rated on Yelp, I had good service from them. Don't think they do inspections, which, since you are concerned about conflicts of interest, should be a Good Thing.

The billionaire and the economist are still conspiring to rip me off with open borders non-sense.

Wouldn't be much of a threat if they didn't also have the Democrats and Chamber of Commerce Republicans as allies.

Runs about $40-$45 depending on where you are in Texas, and now they've "streamlined" the process by making it electronic and a prerequisite for registration renewal. And if you "fail" for something as silly as streaking windshield wipers or a "loose" gas cap (both of which I've seen), too bad so sad you have to pay again after you fix them.

My experience is that Virginia inspectors divide not into the honest and dishonest, but the competent and incompetent. I had a run of several years when I had to replace a wheel bearing after every inspection because every inspector I went to got dirt in the rear wheel bearings when they removed the brake drum to inspect the brakes. Another inspector jammed the inner bearing race onto the spindle at a slight angle and the bearing went bad in
just a few days. I don't mind the safety inspection as much as I mind having to repair the car afterwards.

I drive an old car. If, as Alex suggests, inspectors are motivated to find problems because they are paid to fix them, I would expect the inspectors to go over my car thoroughly. The reality has been that problems often go through two or three inspections before an inspector notices them. Because of the car's age and rust, a couple of inspectors have advised me to junk the car rather than fix it. That's not the behavior you'd expect from a mechanic trying to maximize revenue from repairs. (I do my own repairs and I know how to use a MIG welder, so the car is still on the road.) As near as I can tell, once an inspector has found a few items that will fail a car, they stop looking carefully.

Inspectors are usually employees, and to know what they're motivated to do, you need to know how they are compensated. If an inspector is busy doing inspections, he won't have time to do repairs and they'll have to be done by other employees of the shop. If inspectors are paid like other mechanics, their pay scheme gives them no incentive to do dishonest inspections. My experience suggests that it also doesn't give them an incentive to do thorough inspections. I don't know how most safety inspectors are paid, but I think you need more evidence than Alex has presented before you arrive at Alex's conclusions about incentives.

Just last month we got the windshield replaced because it had a crack over 8 inches, meaning we couldn't get a brake tag. We hadn't replaced it sooner because the crack was on the passenger side of the windshield and only barely affected the driver's vision. Now to what extent the new windshield was truly "necessary," I don't know; it's possible I was taking a foolish risk driving around like that. But it's definitely untrue to say that "self-interest alone" is always sufficient - there is no doubt that the looming possibility of a ticket caused me to change my behavior.

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