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Five years ago, a young Frenchman came by my dealership to look at an old Volvo wagon. He was a friendly guy. But unfortunately, like a lot of folks, he wasn't a car guy and didn't have a lot of money to spend on a used car.
It turned out he was a linguist, and, thankfully for the both of us, he had a good ear for my unique funny American accent – half New Jersey, half Deep Southern. We started talking a bit, and he told me that a public auto auction had recently fleeced him of half his savings. He had bought a 3500-pound lemon in the form of a 10-year-old minivan. The vehicle turned out to not only be a complete clunker from the get-go, but it also had a salvage title history, according to Carfax, which he wasn't aware of when he bought it.
Several days after I had researched the vehicle's VIN and discovered the salvage history, the auction was still refusing to refund his money. Like a lot of people who are new to a country, he was easy prey. After a long series of mechanical breakdowns, tow fees, and repairs, my French friend had given up all hope of ever getting his money back.
In the end he got lucky. As a dealer, I knew that the seller in every state has a certain period of time to provide a title to the buyer, and once that time has passed, the vehicle can be returned for a full refund, no questions asked. My friend would eventually be out those towing fees, repair costs, lots of personal time, and, cruelly enough, a $100 fee the auction charged him for returning the vehicle. But it could have been far worse. Five years later, the same auction, now no longer selling to the public, would try to play a far nastier game with me.
It wasn't. Despite the odometer, bill of sale, buyer's list, and windshield markings all displaying exactly 35,771 miles, it had more. A lot more. As in well over 210,000 miles.
The seller, AutoNation Hyundai Mall of Georgia, had apparently replaced the odometer. When it came time for me to dispute the mileage and get my money back, I was in for a rude awakening. "We don't guarantee the miles," I was told.
35,000. 135,000. 335,000. It didn't matter, according to the auction. If the vehicle was more than 10 years old, it didn't matter if the car was a $70,000 Bentley or a $700 Buick.
Want to know the actual mileage? You're out of luck. You buy the vehicle as-is, according to Oakwood Arrow Auto Auction in Oakwood, Georgia. But that's not what the law says. It's a felony that can be reported to approximately a half-dozen state agencies, and pursued criminally through state and federal court.
If you knowingly sell a vehicle with the wrong mileage and don't disclose it as "true miles unknown" or "not actual miles" on the bill of sale, you have chosen to become a lightning rod for a jaw-dropping list of civil and criminal penalties, according to the United States Department of Justice.
- Federal law permits consumers to obtain treble (triple) damages in court or $1,500, whichever is greater.
- The Secretary of Transportation's office can pursue a criminal warrant for odometer fraud and a fine of up to $100,000 on your behalf.
- The Attorney General's office in your state can pursue any and all civil and criminal penalties that have already been mentioned.
So why do some sellers choose to take these risks? Because it's highly lucrative and hard to prosecute. The National Highway Traffic Safety Administration (NHTSA) has estimated that odometer fraud is a $10 billion business in the United States. As someone who has been an auctioneer, a car dealer, and a part-owner of an auto auction over the course of the last 16 years, I think that number is conservative.
Immigrants and low-income consumers are usually the easiest targets – but they're not the only ones. Sometimes it's a young family, a college student, or a retiree that gets victimized. A $1,000 Hyundai like the one I bought, which is now molderizing at the auction's backlot, can easily become a $4,000 cash car with an odometer rollback, or even a $7,000 vehicle at a dealership that finances vehicles to working-class folks.
It's a devilish dance that, sadly, an awful lot of folks experience at some point in their life. Even a professional like me who has bought and sold thousands of vehicles over the years can get sucker punched.
Do you have a not-so-laid-back "rollback" story to share? Feel free to post it in the comments below.