Odometer fraud and used car sales

Published: May. 22, 2023 at 12:42 PM PDT
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RENO, Nev. (KOLO) - New cars are expensive.

The law of supply and demand means the price of a used car has gone up as well. Low mileage means the used car can demand a greater price.

The problem is an unscrupulous seller can artificially make it so.

“They roll it back because maybe the car is worth $3,000,” says Jeff Pheasant with A Master Mechanic. “But by rolling that back it looks like it wasn’t used as much and maybe they can get $14,000 for the car.”

It is estimated odometer fraud costs $1 billion dollars annually.

It means lower registration and taxes collected by the state. It could also mean fraud in terms of a bank loan as the bank is unknowingly handing over more money than the car is worth. Wire fraud could also be involved if the title is sent across state lines.

That doesn’t begin to estimate what it could cost the new buyer in repairs.

“Suspension, steering, transmission, differential, engine could start wearing, and makes the car less valuable,” says Pheasant.

Pheasant says in analogue odometers, the numbers are manually rolled back, but it’s not an easy process.

“Ferris Bueller’s Day Off?,” Pheasant asks referring to a famous movie which shows an odometer being rolled back.

But does it really work?

“Very slowly it would take a long time,” says Pheasant. “You’d probably burn the drill up before you could take it back to make a difference.”

With digital odometers, a tool can be purchased to reset the odometer. But it is illegal to own one.

In some cases, an entire component can be purchased to replace the old component which sits in the dash. With a legitimate repair, the gauges on the dash may not be working which is why a new module needs to be installed. Legitimate repair shops though must set the odometer to its proper milage.

But for the unscrupulous seller, this is one way to reset an odometer.

The Nevada Department of Motor Vehicles says odometer manipulation is common among stolen vehicles. And most would-be buyers may not be able to tell if the odometer has been messed with.

If the dials look newer than the car itself, that can be a red flag.

The DMV recommends buying from a dealer. If the odometer is incorrect the dealer must right the situation or run afoul with the DMV.

If you have a trusted mechanic, they may be able to help as well. They and the potential buyer can check with a car history report agency to see if there are any discrepancies with the used vehicle.