Interpretation ID: nht76-5.39

DATE: 10/28/76

FROM: AUTHOR UNAVAILABLE; John Womack; NHTSA

TO: Jack B. Schiff

TITLE: FMVSR INTERPRETATION

TEXT: This is to acknowledge receipt of your letter of October 8, 1976, concerning odometer statements issued by auction companies.

As we have indicated in previous letters to you, the statement "no mileage guarantee" does not conform to section 580.6 of title 49, Code of Federal Regulations, the disclosure form. Therefore, any transferor of a motor vehicle who gives such a statement to his buyer is in violation of the Motor Vehicle Information and Cost Savings Act. This applies equally to all transferors of ownership in motor vehicles, including individuals, dealers, distributors, and auction companies.

At first glance, the odometer disclosure statement issued by Floyd Hauhe Auto Auction appears to be in violation of the Federal law because it clearly states that mileage is not guaranteed. However, upon closer inspection, such is not necessarily the case. You will note that their statement says "warranty and mileage are not guaranteed to be good or correct on any car purchased thru this auction." (Emphasis added) Additionally, it says that "this sale is solely a transaction between the buying and selling dealer." This language changes the facts significantly. The vehicle appears not to be as you state in your letter, purchased "from" the auction company. It was instead purchased through the auction, and Floyd Hauhe was not, apparently, a tranferor of ownership in a motor vehicle as defined in Part 580.3 of title 49.

The responsibilities of an auctioneer with regard to the Federal odometer law vary depending upon the capacity in which he is operating. If the auctioneer is conducting business with both the buyer and seller present, the seller is required to disclose the mileage to the buyer at the time of sale and the auctioneer is essentially a by-stander as far as the Federal requirements are concerned. If the auctioneer buys a vehicle, then auctions it, he becomes the transferor and must disclose the mileage. In this case, the auctioneer would not be permitted to state that mileage was not guaranteed. If the auctioneer is acting as consignee for a seller who is not present and who may have delivered the vehicle from hundreds of miles away, he will have to obtain some assurance from the seller concerning the mileage on the vehicle at the time it left the owner's premises before a disclosure is made. As owner, the seller is ultimately responsible for the disclosure statement, but he may have to rely on his driver or the auctioneer to make out the statement at the auction.

It is unclear from the Floyd Hauhe Auto Auction statement as to the capacity in which they are operating. The language on the face of the statement appears to indicate that they are not tranferors and thus are not responsible for issuing odometer statements. If however, they are requested to do so absent sellers, their form is in violation of the Act because it does not provide the transferor's name, address or signature, and because it states that mileage is not guaranteed.

I hope that this information clarifies your questions. If you have any further questions, please do not hesitate to write.