Interpretation ID: nht79-4.28

DATE: 02/22/79

FROM: AUTHOR UNAVAILABLE; John Womack; NHTSA

TO: Maryland Department of Transportation

TITLE: FMVSR INTERPRETATION

TEXT: This is in response to your letter of January 19, 1978, asking whether the odometer statement is required for transfers between dealers which take place price to the sale of a vehicle to an individual. The answer is no. Exemption 580.5(b) (49 CFR @ 580.5(b)) states

A transferor of a new vehicle prior to its first transfer for purposes other than resale need not disclose the vehicle's odometer mileage.

This statement is intended to exclude all transfers of new vehicles prior to the first sale to a customer. For example, when the manufacturer transfers the vehicle to a dealer, no statement needs to be issued because the transfer is for resale purposes. If that dealer makes a trade with another dealer, no disclosure statement needs to be issued because this transfer is also for resale purposes. The second dealer is purchasing the vehicle merely to resell it. If that dealer then sells the vehicle to a customer, private or commercial, who is going to use that vehicle for some purpose other than reselling it immediately, then a disclosure statement needs to be issued. This transfer is the first transfer of the vehicle for a purpose other than resale. Beginning with this first transfer to a customer, each transfer of the vehicle from then on must be accompanied by a disclosure statement.

The Federal law does not, however, prohibit the State from requiring such disclosures. The National Highway Traffic Safety Administration supports all affirmative steps which the States take with regard to combating odometer misrepresentation.