TL;DR: Odometer fraud occurs when a vehicle’s mileage is intentionally altered to make it appear less used, defrauding the buyer into paying more for a car. It’s a serious crime with penalties, and it’s essential to be aware of the signs when buying a used vehicle.
Call Insure on the Spot at 773-202-5060 for guidance on protecting yourself and ensuring proper insurance for your used car purchase.
What Is Odometer Fraud?
Odometer fraud involves altering the mileage of a vehicle to make it appear that the car has been driven fewer miles than it actually has. This usually involves rolling back the odometer reading, making the vehicle seem newer and more valuable. Unscrupulous sellers may commit this fraud to sell the car at a higher price, as cars with lower mileage typically cost more. Unfortunately, this deceptive act can leave the buyer with a car that requires expensive repairs much sooner than expected.
From a legal standpoint, odometer tampering is prohibited under both federal and state laws. In Illinois, for example, a first offense is a Class A misdemeanor, and a second offense can lead to a Class 4 felony.
Federal law (49 U.S.C. § 32703) also criminalizes the practice, and offenders face fines and jail time. The harm caused by odometer fraud extends beyond just overpaying for a car—it can also void warranties and cause the buyer to incur higher insurance premiums based on the false mileage reading.
Why Is Odometer Fraud So Harmful?
Odometer fraud is harmful because it hides the true condition of the vehicle. Buyers often overpay for cars that have much more wear and tear than they believe. For example, a car with 120,000 actual miles could have its odometer rolled back to show only 60,000 miles, leading the buyer to believe they’re getting a low-mileage, more valuable car. However, the car’s true condition will soon reveal itself, resulting in unexpected repairs, safety risks, and higher insurance costs.
The National Highway Traffic Safety Administration (NHTSA) reports that over 450,000 cars are sold each year with false odometer readings, causing consumers to lose more than $1 billion annually.
How Does Odometer Fraud Happen?
Odometer fraud can be carried out in several ways, both with mechanical and digital odometers.
- Mechanical Odometers: In older cars with analog odometers, fraudsters may manually roll back the odometer dials by hand or with special tools. They might remove the instrument panel or use devices that manipulate the odometer gears.
- Digital Odometers: On modern cars with digital odometers, fraudsters may reprogram the odometer using electronic tools. Some might replace the entire instrument cluster or use software to alter the mileage.
Though digital odometers are harder to detect due to the lack of physical dials, they can still be tampered with. The increasing use of digital odometers has led to a rise in digital rollback fraud, despite the technological advancements that make detection more challenging.
How Can I Spot Odometer Fraud When Buying a Used Car?
Here are some red flags to look for when inspecting a used car to ensure the odometer reading is accurate:
1. Mismatch Between the Car’s Condition and Mileage
- Look for excessive wear on the car’s pedals, seats, or steering wheel. A car with 40,000 miles should have less wear than one with 100,000 miles. If the car’s interior or exterior doesn’t match the mileage, it’s a warning sign.
2. New Parts That Don’t Fit the Mileage
- Check for parts that should naturally wear out after significant use. For example, if the car’s tires appear new but the mileage is low, the odometer could have been rolled back. Similarly, check the brake discs/rotors for signs of excessive wear.
3. Inconsistent Records or Stickers
- Look at the maintenance and inspection records. If the car’s odometer readings don’t progress logically (e.g., an oil change sticker lists a mileage that’s higher than the car’s current odometer), it’s a red flag. Similarly, check the vehicle title for discrepancies.
4. Odometer Display Issues
- Inspect the odometer display carefully. On mechanical odometers, misaligned numbers or scratch marks can indicate tampering. On digital odometers, look for flickering displays or error codes, which can signal tampering.
5. Multiple Owners in a Short Period
- If the vehicle has changed hands frequently, it could be a sign of odometer fraud. Fraudsters often sell the car quickly after tampering with the mileage to avoid detection.
6. Former Fleet or Rental Cars with Low Mileage
- Be cautious if a former fleet, rental, or lease return car shows unusually low mileage. These cars are typically used more heavily, so low mileage after several years of service may indicate a problem.
How Can I Check if an Odometer Was Tampered With?
To detect odometer fraud, follow these steps:
1. Obtain a Vehicle History Report
- CARFAX and AutoCheck offer vehicle history reports that can show past mileage readings. Discrepancies in the mileage can indicate tampering.
2. Cross-Check Maintenance Records
- Ask the seller for maintenance records and check if the mileage progression makes sense. Cross-check the data with any service history from the dealership or service centers.
3. Physically Inspect the Vehicle
- Inspect the pedals, seats, and steering wheel for signs of excessive wear. Make sure the odometer’s numbers are aligned and check for scratches or pry marks around the instrument cluster.
4. Consult the National Motor Vehicle Title Information System (NMVTIS)
- The NMVTIS provides title and odometer information across states. This can help confirm if the odometer reading has been altered during a title transfer.
5. Get a Professional Inspection
- Hire a trusted mechanic or automotive technician to inspect the vehicle. They can use diagnostic tools to identify discrepancies between the odometer’s reading and the data stored in the car’s computer system.
What Are the Penalties for Odometer Fraud?
Odometer fraud is a serious crime with significant penalties. Under federal law, those convicted of tampering with odometers face fines of up to $10,000 per vehicle and up to three years in federal prison. In Illinois, a second offense is considered a Class 4 felony. Additionally, convicted individuals may face restitution payments to compensate victims.
Frequently Asked Questions about Odometer Fraud
Q: Can I sue a car seller or dealer for odometer fraud?
A: Yes. Federal law allows you to recover three times your actual damages or $10,000, whichever is greater. You can consult an attorney to evaluate your case.
Q: Is digital odometer rollback detectable?
A: Yes, but it’s more challenging than mechanical rollback. Checking the car’s vehicle history report, maintenance records, and using diagnostic tools are effective ways to detect digital fraud.
Q: What are the signs of odometer fraud?
A: Red flags include excessive wear that doesn’t match the claimed mileage, new parts on a low-mileage car, and inconsistent records.
Q: Is odometer tampering a felony?
A: Yes, under federal law, odometer tampering is a felony offense punishable by fines and up to three years in prison per violation.
Q: Are older vehicles exempt from mileage reporting?
A: Yes, vehicles 20 years or older are exempt from mandatory mileage reporting under federal law.
Q: How can I protect myself from odometer fraud?
A: Always verify the car’s vehicle history, inspect the car’s condition, and request maintenance records. If you’re unsure, consider hiring a professional mechanic to inspect the car.
Get a Quote Today!
If you’re buying a used car and need guidance on insurance coverage, don’t hesitate to reach out to Insure on the Spot at 773-202-5060. We’re here to help you make informed decisions and protect yourself on the road.