Interpretation ID: nht75-5.39

DATE: 03/10/75

FROM: JAMES C. SCHULTZ FOR RICHARD B. DYSON -- NHTSA

TO: National Automobile Dealers Assoc..

TITLE: FMVSR INTERPRETATION

TEXT: This is in response to your letter of December 27, 1975, concerning the use of Form AADA-65 for purposes of disclosing odometer mileage when a vehicle is sold.

The NHTSA disagrees with your apparent contention that the portion of the preamble you cited, authorizing use of disclosure forms other than the one prescribed in Part 580, covers the use of Form AADA-65. That language limits the use of odometer forms which do not simulate the form contained in the regulation to situations where a State requires execution of an odometer statement which "contains equivalent information" to the Federal one. It is our understanding that the AADA form was adopted by the Arizona Automobile Dealers Association upon recommendation of the National Automobile Dealers Association. We are unaware of any Arizona State law that mandates use of the AADA form as a basis for compliance.

While the NHTSA appreciates the efforts of the NADA to develop a useful and effective odometer disclosure document, we cannot approve a format that is not substantially the same as the Federal form without following standard rulemaking procedures of notice and comment. We welcome your suggestions as to how you feel the odometer form can be improved, and suggest that you submit them in the form of petitions for rulemaking under the procedures specified in 49 CFR 553.31.

As pointed out in your letter, the NHTSA has determined that the AADA-65 form does not fulfill the requirements of Part 580. We appreciate your cooperation in notifying your membership of this decision. A changeover to use of the Federal odometer form by April 1, 1975, is considered reasonable by the agency. We thank you for your comments and look forward to receiving your ideas on the matters mentioned in your letter.

Yours truly,

ATTACH.

National Automobile Dealers Association

December 27, 1974

Richard B. Dyson, Esq. -- Acting Chief Counsel, National Highway Traffic Safety Administration, Department of Transportation

Re: N40-30 (kk)

Dear Sir:

Recent discussions have been held between Attorney Karen Kreshover of your office and Mr. Dave Hunt of my staff and myself concerning the odometer mileage statement form currently being utilized by the franchised new car dealer members of the Arizona Automobile Dealers Association (Form AADA-65). Questions have recently been raised as to whether Form AADA-65 satisfies the requirements of the Federal odometer law (Motor Vehicle Information and Cost Savings Act, Title IV, P.L. 92-513, 86 Stat. 947).

It is my understanding that John J. Relihan, Esq., of Solomon, Relihan & Blake, Law Offices, Suite A, 1819 West Osborn Road, Phoenix, Arizona 85015, has contacted your office (Mr. Relihan's letter dated September 9, 1974) requesting your Agency's views as to whether AADA-65 complies with the Federal odometer requirements. In addition, Mr. Relihan also inquired as to whether NHTSA had 'approved' Arizona Form AADA-65.

In your letter dated September 27, 1974 (September 30, 1974?) you state that you, ". . . (A)re unaware of any past correspondence between this office and either the Arizona Automobile Dealers Association or Norwick Printers of Oklahoma concerning the validity of a disclosure statement." You also state that, ". . . The Form AADA-65 enclosed in your letter fails to comply with our regulation in several respects." You then specifically discuss those areas of the form which in your opinion do not satisfy the requirements of the Federal odometer law and regulations of NHTSA promulgated pursuant thereto. Your suggestions for correcting those items which are deficient are also set forth.

A bit of historical background may be most helpful in explaining the 'birth' of AADA-65, and will explain NADA's involvement and interest in this matter. As I am sure you are aware, NADA was one of the prime backers of enactment of Title IV of the MVICSA. During your Agency's consideration of appropriate regulations to implement the mandate of the Congress, NADA supported the earliest effective date possible with respect to the odometer requirements. As events unfolded, this proved to be March 1, 1973. NADA also provided your Agency with its suggestions as to content and format for the suggested Federal odometer mileage statement form which your Agency developed.

After evaluating the odometer mileage form developed by your Agency, NADA reached the conclusion that perhaps more information than that required by your Agency's form, along with a somewhat different format, might prove to be more effective in reaching our common goal of devising an odometer mileage statement which would -- a) require at least the minimum substantive information to fulfill the intent of the Federal law; b) clearly and easily be understood by the average seller and buyer of motor vehicles; and c) be as concise as possible while maintaining and satisfying the objectives of (a) and (b) above. The use of such an alternative form was authorized by your Agency in your notice of rule making published in the Federal Register of January 31, 1973 at page 2978.

". . . To avoid the need for duplicate State and Federal disclosures in States having odometer disclosure laws or regulations, the section (Part 380.4) permits the State form to be used in satisfaction of the Federal requirement, so long as it contains equivalent information and refers to the existence of a Federal remedy."

(Federal Register, Vol. 38, No. 20, pg.2978)

Pursuant thereto, NADA developed its own version of an odometer mileage form which differed format-wise in some respects from the form developed by your Agency. NADA's form also required several additional items of information which were not required on the form developed by NHTSA. NADA then utilized its various publications to acquaint dealers at ATAM Managers of the various state franchised automobile dealer associations of the new requirements which were to go into effect March 1, 1973. NADA provided sample copies of both NHTSA's recommended form and the form which NADA had developed. Arizona's Form AADA-65 is an exact duplicate of the odometer mileage form developed by NADA.

In your notice of January 31, 1973, you state that an alternative State form may be utilized, ". . . . (S)o iong as it contains equivalent information and refers to the existence of a Federal remedy." (Emphasis added.) NADA believes that AADA-65 falls within these broad parameters, at least to the extent of satisfying the legal requirements of the Federal odometer law. However, NADA also firmly believes in the old adage 'experience is the best teacher.' After viewing the various ways in which several of the Arizona odometer forms have been filled out, NADA has come to agree with Attorney Kroshover that its form (of which AADA-65 is an example) simply has not met the test of actual field experience, and that at least some transferrors have become confused as to the proper method of filling out the form. In short, it has not been successful with respect to objective (b) as outlined above.

I want to make it very clear that NADA strongly supports maximum compliance with the requirements of the Federal odometer law, and therefore wishes to have its member franchised new car and truck dealers comply not only with the 'letter' but also the 'spirit' of the law. While believing that use of the NADA developed form in the past has satisfied the legal requirements of the Federal odometer law, I would like at this time to formally notify your Agency that NADA is in the process of notifying its membership of the preferability of discontinuing the use of the NADA developed form. NADA is recommending that the Federal odometer form as published in the Federal Register of January 31, 1973, be utilized in its stead. With the necessary and reasonable delays which are naturally being encountered in the changeover, i.e. new forms must be printed, distributed, etc., NADA at this time anticipates completion of the changeover in approximately 60 days, or about March 1, 1975.

NADA sincerely hopes that this action on its part will further the common goal of both your Agency and the franchised new car and truck dealers who comprise the membership of NADA of effectuating full compliance with the requirements of the Federal odometer law. NADA would like to note, however, that its original objections to the Federal form's limited content and format as developed by your Agency still exist. It is our intention, therefore, to request in the near future further formal rule making proceedings in this area. The practical field experience gained during the past year and one half (which exposed the weaknesses of the NADA developed form) should also be put to use, in NADA's view, to determine whether similar problems have been encountered in the use of the Federal form. Such an ongoing program review should serve a very useful function in insuring that the form utilized, to the maximum extent, is as clear and understandable as possible to the average consumer who must fill out an odometer form when selling his or her automobile.

It is NADA's hope that the action which it has taken with respect to the matters discussed above meet with the approval of your Agency. I think it can safely be said that our action in this matter fully confirms our stated support, from the inception of the Federal odometer law, for a fair and effective odometer mileage disclosure law to protect consumers from the occasional unethical and deceptive practices in this area encountered in the past. Your formal response in this matter would be greatly appreciated.

Awaiting your response, I remain

Sincerely yours,

Kevin P. Tighe -- Legislative Counsel