After buying a used car, I discovered the odometer had been rolled back 30,000 miles. Can I take the car back?
Unfortunately, odometer fraud is a lot more prevalent that most people realize. As many as one in 10 used cars has had its mileage rolled back before being sold to an unsuspecting buyer, says Leigh-Anne Dennison, spokeswoman for Carfax, a service that offers vehicle history reports. This practice is more than dishonest — it's illegal.
Unfortunately, getting your money back may be a challenge — particularly if the car was purchased from an individual rather than a dealership.
Unlike new cars, used vehicles aren't protected under the state Lemon Laws. These statutes are reserved for automobiles fresh off the assembly line that have continuous problems. This means a used-car buyer doesn't have much in the way of recourse for a car that simply breaks down a lot — that is, unless the car is still covered by its original warranty.
But outright odometer fraud is another story. This falls under the Truth in Mileage Act, which states that it's illegal for any person to roll back an odometer and not disclose the true mileage on the Certificate of Title at the time of transfer. Too bad this law is frequently broken: Odometer fraud is estimated to cost consumers across the country some $4 billion a year, according to the Georgia State Office of Consumer Affairs.
Once an odometer is rolled back, con artists can artificially inflate a vehicle's value by as much as 10 cents a mile, says Dennison. So if the odometer was "clocked" 30,000 miles, the buyer probably paid roughly $3,000 more than the car's value. Unlucky owners also tend to shell out more for repairs, since there is more wear and tear on the car than expected.
If a car owner discovers the odometer has been tampered with, the first thing he or she should do is report the vehicle to the state Attorney General's Office. There one can find out what the particular laws are in that state and receive information on how to recover damages. One may also contact the National Highway Traffic Safety Administration via their Auto Safety Hotline at 800-424-9393 to report the felony. This won't help consumers recover their money, but the NHTSA will investigate the crime and could press criminal charges.
When it comes to recovering damages, much rides on whether the used car was purchased through a licensed used-car dealer or from an individual. Used-car dealers, except those in Maine and Wisconsin, are regulated by the Federal Trade Commission's Used Car Rule, which provides a number of consumer protections — one being that dealers must provide a buyer's guide that discloses all warranty information. Under this rule, those found guilty of tampering with mileage face stiff penalties and even jail time. A consumer who's wronged can most likely just bring the proof of odometer fraud to the dealership manager and start negotiating. "If you had a Carfax report you would probably have all the proof you need," says Phil Reed, consumer-advice editor of Edmunds.com, which provides automotive information. Even if the consumer purchased the car "as is," he'd have a strong case for a refund, since the car wasn't purchased in the condition that was presented.
If the clunker was bought from an individual, it becomes a case of the buyer's word against the seller's word. This means the buyer would probably have to take the seller to court to recover the original cost of the car and any money spent on repairs. Again, a Carfax report may be all the proof the owner needs to prove the mileage was wrong. Still, this is no guarantee that damages will be recovered. Even if the buyer wins the case, if the seller can't afford to pay the damages, the buyer is out of luck. This is one of the reasons certified preowned cars (cars that were once leased and are now certified by a dealer) are so popular, says Karl Brauer, editor in chief of Edmunds.com.
As prevalent as odometer fraud may be, in most cases it can also be avoided. The key is to do your homework before the car is bought. The first thing any prospective buyer should do is review the vehicle's service records, says Brauer. If the seller refuses, consider that a red flag. Even with the records in hand, it's a good idea to order a Carfax report, which compiles data ranging from accident damage to odometer fraud from a variety of sources, including all 50 Division of Motor Vehicle offices, police reports and some fleet-management companies. Many dealers will offer to run a report for free. If not, you can go to Carfax.com and order a copy for $14.99.
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