Interpretation ID: nht75-5.38

DATE: 11/18/75

FROM: AUTHOR UNAVAILABLE; Frank A. Berndt; NHTSA

TO: Georgia Automobile Dealers Association

TITLE: FMVSR INTERPRETATION

TEXT: This is in response to your letter of September 19, 1975, inquiring as to the disclosure responsibilities of an individual who sells a vehicle with a nonoperational odometer.

You describe a situation in which a dealer executed an odometer disclosure statement indicating that the actual odometer mileage was unknown where the odometer was nonfunctional. Apparently, the purchaser now claims sale of the vehicle with such an odometer inaccuracy constitutes misrepresentation by the dealer.

Based upon the facts of the case as you have presented them, the National Highway Traffic Safety Administration (NHTSA) does not consider that a violation of the odometer requirements of the Motor Vehicle Information and Cost Savings Act (Pub. L. 92-513) has occurred. If the dealer in question executed an odometer disclosure statement, at the time of sale, that complies with the Federal disclosure requirements (49 CFR Part 580, Odometer Disclosure Requirements), and states that the mileage indicated on the odometer differs from the true mileage for reasons other than calibration error he satisfied his responsibilities under the law. The buyer was informed that the odometer mileage was incorrect and therefore should not be relied upon as an indication of the vehicle's condition.

As long as a seller informs his buyer as to the validity of the odometer mileage, he has no additional responsibility to repair an apparently nonfunctional odometer.

SINCERELY,

GEORGIA AUTOMOBILE DEALERS Association

September 19, 1975

Karen Kreshover, Esq. Office of Chief Counsel NHTSA

Mr. Dave Hunt, of the National Automobile Dealers Association, has requested that I write to you on behalf of one of our members. His problem concerns whether the odometer has to be in working condition at the time of a retail sale on a used car.

I have received the following narrative from the dealer concerning his difficulty.

Customer traded in a car and signed an Odometer Disclosure Form that the mileage was correct. The car was later retailed, and upon finding the odometer was not working due to the fact that the odometer reading at the time of the retail was still the same as it was at the time it was traded in -- the dealer's Disclosure Statement showed the mileage unknown -- the odometer was not working at the time of retail sale. A rubber stamp, with large letters, was used showing "as is", with the customer initialing under the wording "as is". The dealer does this on all his sales as part of the information on his bill of sales, along with the motor number, serial number and description of the car. He includes a line that shows mileage. The dealer has always displayed mileage, even before there was an Odometer Disclosure Law. On the Bill of Sale, where the dealer had written in the mileage, it was also marked (non certified). Some time later, within about 30 days, the customer complained of a problem in the transmission and wanted the dealer to repair it. The dealer refused because the vehicle was sold as an "as is" sale. The customer had the transmission repaired elsewhere, at his own expense. Now, the customer wants the dealer to reimburse him for the cost of the repairs because it is obvious that the mileage that appears on the odometer is lower than the actual mileage. The customer is basing his claim on misrepresentation at the time the car was purchased, even though he was made aware that the odometer could not be certified and the odometer was not working at the time of purchase.

Please inform me of your decision as soon as possible.

William F. Morie

Executive Vice President

H. Calvin Stovall, Jr. President

CC: DAVE HUNT