By Matt Keegan
Purchase a used car and you hope that it is everything you want it to be. But hope is not a winning strategy. Unless you thoroughly check the condition of the car, there is a chance that a hidden problem may escape you.
One of those hidden items could be the odometer reading. CARFAX research indicates that nearly 200,000 cars have their odometers rolled back each year and currently there are more than 1 million vehicles on the road with rolled-back odometers.
Rolling back an odometer is not just wrong, it is fraud. Indeed, it is a federal crime that gives the aggrieved party the opportunity to recover $1,500 or treble damages, whichever is greater, plus reasonable attorney's fees. Furthermore, most states have their own consumer protection laws that give car buyers even greater protection.
Some consumers are under the misconception that odometer fraud disappeared when yesterday's mechanical odometers were replaced with today's digital odometers. After all, how do you tamper with your car's computer?
You might be surprised to learn that the process is fairly easy, especially for anyone with access to certain online tools. In fact, the crime is so easy to commit that it is almost a wonder that fraud numbers aren't higher.
Before we look at how best to combat odometer rollback fraud, we will examine the financial damages incurred by the unsuspecting buyer.
All things being equal, a higher mileage vehicle typically commands a lower price on the used market, and once the true odometer reading becomes known your car's value is reduced.
Even a small adjustment of a few thousand miles will affect values. However, most odometer rollback fraud incidents involve tens of thousands of miles. For instance, that 7-year-old sedan you thought had 40,000 miles on the odometer might in reality read 90,000 miles.
There are other ways you will suffer once your true odometer reading becomes known.
First, if you financed your vehicle, you will have to tell the finance company what the correct mileage is. That true number can mean an increase in your interest rate.
Second, your insurance company might raise your premium. Insurance policies are based on a number of factors, including body style, make, model, model year, condition and mileage. In addition to a higher insurance premium, your insurance agent may demand that you stop in with your car for a personal inspection. In a worst-case scenario, your insurance might be canceled.
Third, those maintenance items you might have thought were months or years away from becoming due may need attention at once. Specifically, if you compare the actual odometer reading with the vehicle maintenance schedule in the owner's manual, you may discover that something like the shocks or struts are due for a replacement. That represents a cost you had not planned on, at least not right now.
Fourth, your time is money. Resolving an odometer rollback fraud case takes time and money. You will need to hire an attorney to represent you. You will also need to devote time to handle the issues mentioned in the first three points, as well as taking time off from work to go to court.
The good news here is that odometer rollback fraud can almost always be avoided. It starts by examining the vehicle yourself and asking the seller some questions related to the condition of the car, including questions about its odometer reading. If your gut tells you that, "this deal is too good to be true," then chances are your instincts are correct. If the salesperson puts undue pressure on you, that's a warning sign too.
You can also take the car to your mechanic to verify its condition. A trained mechanic will notice things you won't and may question why certain parts or components show advanced signs of wear that do not correspond to the vehicle's mileage.
For example, if spark plugs and wires should last 100,000 miles, but look like they are due for replacement when the odometer reads 40,000 miles, then that's a problem. On closer inspection the mechanic may find other troubling signs, including water stains in the trunk or under the carpeting.
Even before contacting a mechanic, you can ask the seller to show you the CARFAX Vehicle History Report. You can also independently verify the odometer reading by using the free CARFAX odometer check. Simply enter the 17-digit alphanumeric vehicle identification number (VIN) corresponding to the vehicle as well as the zip code where the car is being sold.
You will get a number that should correspond to the odometer reading. If it does not, you should walk away from the transaction.
There is another level of protection for used car buyers and that comes when you choose a certified pre-owned vehicle. These cars, trucks and SUVs typically pass a manufacturer's multipoint inspection plan and come with a warranty. In fact, you may also be able to take over the balance of the new car warranties, including rust protection and the powertrain coverage.