Department director-general Asdsathai Rattanadilok Na Phuket said the measure is intended to prevent car theft rackets from using licence plate numbers to process registration of vehicles that are stolen or smuggled into the country.
Mr Asdsathai said the regulation also seeks to ban re-registration of vehicles that were badly damaged in accidents to prevent them from returning to the roads.
Many of the badly damaged vehicles have managed to "be reborn" for sale in used car markets, police say.
When the regulation is enforced, the licence plate numbers of badly damaged vehicles will be cancelled and erased from the department's database system, Mr Asdsathai said.
After a month of drafting, Mr Asdsathai said the proposed regulation will be presented for consideration by the Transport Ministry and the Council of State, which is the government's legal advisory body. The cabinet would give final approval.
He said the department is working with the Royal Thai Police, the Office of the Insurance Commission, the Thai General Insurance Association and the Thai Hire-Purchase Association to draw up the measure.
Mr Asdsathai said that when insurance companies estimate compensation for badly damaged vehicles, ownership of the licence plate numbers is transferred to the companies. It was found that some of the companies resold the licence plate numbers to those involved in car theft and car smuggling rackets, he said, adding the plate numbers were often used to process registration for illegal vehicles of the same colour and the same model.
Purchasing these illegal vehicles could put buyers in trouble and causes the state to lose tax revenues, Mr Asdsathai said.
As the regulation awaits enactment, the department is ordering all provincial land transport offices nationwide to be strict when re-registering vehicles that were repaired after damages, he said. Mr Asdsathai said owners of these damaged and repaired vehicles must present their vehicles for a rigorous inspection at the department's provincial offices.
They are also required to show documents, such as repair bills, copies of police accident records, photos of the cars after the accidents, certificates from mechanics and engineers who repaired the vehicles, and pictures showing the repair process. If vehicles pass the checks, officials will stamp registration books to show they underwent proper repair, Mr Asdsathai said.
He said that if it is later discovered the vehicles were repaired using illegal parts or the repaired vehicles are not the original ones, their licence plate numbers will be revoked and owners will face criminal punishment.
Deputy national police chief Pol Gen Somyot Pumpunmuang has cited information from insurance companies which estimated the number of irreparably damaged vehicles in accidents at between 1,200-1,500 each year. Pol Gen Somyot, who is the director of the Car and Motorcycle Theft Prevention and Suppression Centre under the Royal Thai Police, said many of the damaged vehicles were beyond repair and targeted by dealers.
The dealers would buy the wreckage at cheap prices at auction and resell them to car garages or car theft rackets, Pol Gen Somyot said. Members of car theft gangs would then use the licence plate numbers of the damaged vehicles for vehicles that were stolen or illegally acquired. They would resell the vehicles to dealers operating used car tents, frequently advertised for sale on the internet, Pol Gen Somyot said.
Pol Gen Somyot also said police are investigating allegations that some provincial land transport offices are colluding with dealers in car wreckage. Part of the problem, he said, is carelessness on the part of authorities who are responsible for checking documents and the conditions of the vehicles.
On July 18, police arrested three men suspected of being involved in car licence forgery and seized five cars from them as evidence. The suspects advertised cars for sale on Facebook and offered to process fake car documents, he said. Many of the cars were bought from pawnshops after car owners defaulted on loan payments owed to the pawnshops.