Odometer Disclosure

Federal and State laws require all dealers to disclose any type of odometer discrepancy to all future buyers before the sale. Most states have an Odometer Disclosure Statement that will allow you to report any type of odometer discrepancy. Most state titles also have a check box on the back that may state something like “Mileage May Not Be Actual” or “Mileage Discrepancy”. You will need to check this box and complete an odometer statement of explanation any time you sell a vehicle with an incorrect odometer.

When you are selling a vehicle with an incorrect odometer reading you are usually required to complete an odometer disclosure statement. You will then staple a copy of the odometer disclosure statement directly to the title so all future buyers will note the discrepancy and you’ll keep a copy of the odometer statement of explanation a minimum of five years.

Many states allow any vehicle that is older than ten years old to be exempt from odometer disclosure. Most states require odometer discrepancies to be disclosed no matter how old the vehicle is.

Be sure to check with your state dealer license bureau to find out the exact odometer disclosure requirements in your state.

Let’s say, for example, you purchase a car from someone that states the speedometer stopped working when the odometer read 80,000 miles. He or she then replaced the broken speedometer with a new speedometer that had an odometer reading of 40,000 miles. This would be an odometer discrepancy. You must report this odometer discrepancy to all future buyers. This best way to disclose this information is in writing by using an odometer statement of explanation.

Also, many older odometers have five digits only allowing a reading of up to 99,999 miles. If you purchase or sell a vehicle with an odometer that reads 23,000 miles and you are pretty sure the vehicle has 123,000 miles or 223,000 or possibly 323,000 miles, you must disclose that the odometer has possibly rolled over. On many state titles, a check box located on the back of the title might say “Mileage May Exceed Mechanical
Limits” or some similar phrasing. If you suspect the mileage on the vehicle has rolled over, be sure to disclose the information to all future buyers.

Odometer Fraud

There are basically three types of odometer fraud. Be sure to check with your state to find out your exact odometer requirements.

Odometer Fraud in the First Degree-Installing a device that allows an odometer to read any mileage other than the true miles driven

I had never heard of odometer fraud in the first degree but I found out some people have been installing what are called “Odometer Rips” on vehicles such as import tuners. These odometer rips allow an odometer to record only one mile on an odometer for every five miles actually driven. Odometer rips allow an odometer to read a mileage that is much lower than the actual true mileage, which would cause a false, inflated value of the vehicle. Installing any device that keeps an odometer from registering the correct mileage is odometer fraud in the first degree, a misdemeanor in most states.

Odometer Fraud in the Second Degree-Disconnecting, resetting, or altering the reading of an odometer to with the intent to change the numbers

If you ever disconnect, alter, or reset an odometer you are committing odometer fraud in the second degree. Federal and State laws prohibit any type of tampering with an odometer. You may remember back in the 1970’s dealers all over the country were placing a drill in the odometer cable which allowed an odometer’s mileage to be rolled back substantially. Several laws have since been enacted to prohibit this action and every state now strictly prohibits the altering of an odometer. Odometer fraud in the second degree is a felony.

Odometer Fraud in the Third Degree-Operating any vehicle less than 10 years on any highway with the odometer disconnected or not working

If you drive a vehicle less than ten years old with the odometer disconnected or not working you may be committing odometer fraud in the third degree. Most states prohibit you from driving a vehicle that is less than ten years old if the odometer is not functioning. You can still purchase a vehicle less than ten years old with the odometer disconnected or not working, but you would have to tow it back to your dealership or repair shop to have the odometer repaired. Once the odometer is repaired you would be required to complete an odometer disclosure statement, attach it directly to the title, and keep a copy for a minimum of five years.
Be very aware of a vehicle that someone is trying to sell you if it is less than ten years old with the odometer not functioning. Odometers in today’s newer vehicles were designed well and are pretty much fault free. If someone is trying to sell you a vehicle that is less than ten years and the odometer is not working the vehicle has possibly been in an accident or the odometer may have been tampered with. If you do buy the vehicle you cannot drive it until you repair the odometer or you would be committing odometer fraud in the third degree, which is a misdemeanor.

Odometer Information