Seems to me that the state could require repairs shops to report major safety issues such as rusted-through frames, bald/cord showing tires, etc., through a simple portal - like mandatory reporters (doctors, teachers, social workers, etc) must do if they suspect child/elder abuse. A checked-off description and the license plate could be sent to the state and they take it from there. For egregious faults, registration renewal could be prevented without proof of repair. That would keep the major clunkers off public roads and not be such a transparent business development program for garages as motorists could get it repaired at a place/time of their choice.
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