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Odometer Replacement on Exempt Vehicles

NAAA has been presented with the following scenario:

A customer bought a vehicle that was exempt, but the odometer had been replaced with one that had significantly fewer miles (280,000 to 108,000). The seller did not announce that, so the seller was told he had to buy it back. The seller balked saying that being exempt it didn't matter. Although disagreeing with his argument, we checked with a few other auctions and were surprised that many auctions agreed with the seller.

A review of the National Highway Traffic Safety Administration (NHTSA) website found information explaining that an odometer rollback was illegal on an exempt vehicle but did not address odometer replacement. A call was made to the NHTSA for clarification. The NHTSA confirmed that all laws concerning odometers, except title documentation, apply to exempt vehicles.

NAAA Arbitration Policy (http://www.naaa.com/pdfs/NAAAArbitrationPolicy_Jan2011.pdf) states on page 7, item 10, that the seller must announce these discrepancies. Additionally, the NHTSA also states that auctions are required to record the mileage on exempt vehicles somewhere in the records even if it does not get recorded on the bill of sale.

The federal statute concerning odometer service, repair, and replacement is 49 USC 32704 and the statute concerning auction records is 49 USC 32705(e). Additional guidance concerning auction companies may be found in the Code of Federal Regulations under 49 CFR 580.9.

The following is an excerpt from a previously issued interpretation letter concerning odometer replacement procedures. It is from NHTSA General Counsel Frank Berndt written to Key Scales Ford, Inc. on September 25, 1980. Despite the age of this interpretation it remains relevant as the statute has not changed.

"This is in response to your letter of September 4, 1980, in which you requested information on the proper procedures to be followed with respect to the odometer setting when a new odometer/speedometer head is installed. When an odometer is repaired or replaced the mileage on the repaired or new odometer must be identical to that on the odometer before the repair or replacement. In those instances where the odometer is incapable of registering the same mileage, the odometer must be adjusted to read zero and a notice in writing must be attached to the left door frame of the vehicle specifying the mileage prior to the repair or replacement of the date of such service. There is no specified format for the notice, but it must include the above information."

For additional concerns, the point of contact in NHTSA's Office of Chief Counsel is David Case at david.case@dot.gov or 202.366.2239. In order to receive a written interpretation you will need to describe your particular concerns and questions in writing. NHTSA's response will be posted on their website to serve as guidance for others.

Below is a link to NHTSA's Interpretation Letter Database as well as the mailing address of the Chief Counsel's office:

NHTSA's Interpretation Letter Database

Office of the Chief Counsel
National Highway Traffic Safety Administration
1200 New Jersey Avenue, SE
West Building
Washington, D.C. 20590
(202) 366-9511

Posted 4/28/11