Interpretation ID: nht80-1.2

DATE: 01/03/80

FROM: AUTHOR UNAVAILABLE; Frank Berndt; NHTSA

TO: Haynsworth

TITLE: FMVSR INTERPRETATION

TEXT: This is in response to your telephone conversation with Kathy DeMeter of my staff on Friday, December 21, 1979. You asked for the status of section 580.5(a)(1) of Title 49 of the Code of Federal Regulations. That section exempts from the odometer disclosure requirements anyone transferring a vehicle having a gross vehicle weight rating of more than 16,000 pounds. That exemption is part of the regulation, originally issued in January 1973, which prescribes rules requiring a transferor of a motor vehicle to make a written disclosure to the transferee concerning the odometer reading and its accuracy.

In January 1977, the exemption was declared void by the United States District Court for the District of Nebraska on the grounds that the National Highway Traffic Safety Administration (NHTSA) has exceeded its authority in fashioning the exemption. Notwithstanding the court's decision, the NHTSA believes that it has the authority to create exemptions for vehicles for which the odometer reading is not relevant. The exemption, consequently, remains a part of the odometer disclosure regulations.

For your information, I have enclosed copies of the statements submitted by Freightliner, White, and the National Association of Motor Bus Operators, which support the exemption for larger vehicles.

SINCERELY,

ENC.

FREIGHTLINER CORPORATION

January 8, 1973

Docket Section National Highway Traffic Safety Administration

Ref: Docket No. 72-31; Notice 1 Odometer Disclosure Requirements

Gentlemen:

Freightliner Corporation manufactures the White-Freightliner truck which is a cab-over vehicle generally used in over-the-road transportation. This vehicle is marketed by the White Motor Corporation. We represent 10% of the Class 8 diesel vehicles and over 25% of the Class 8 cab-over vehicles. 94% of our vehicles pull a semi-trailer; an additional 5% plus are full trucks pulling a pull trailer.

The basic intent of this proposed rule is to provide the purchaser with an accurate measure of the life already expended in a given vehicle so that he may judge the potential remaining life against the dollar value asked for the vehicle. It is apparent from the writing of this proposed rule that it is aimed primarily at the passenger car industry although there are no exclusions of vehicles of over 10,000 pounds weight rating.

There is a unique situation, however, involved in the original sale of this class of vehicle in that it is not normally handled by truck or train transport. The majority of vehicles, particularly in the Class 8 category, are delivered via driveaway and over 25% of our vehicles travel 2,000 or more miles before they reach the hands of the first purchaser. 2,000 miles may be significant mileage for a passenger car requiring reporting; however, in a commercial vehicle which will operate well in excess of 100,000 miles per year, the 2,000 delivery miles are insignificant, particularly since they are under a no-load condition or under a light load condition if a piggy back operation is used in delivery.

In our operation we have two title changes prior to the vehicle reaching the customer and this proposed regulation would put an undue burden on us as a manufacturer. Freightliner Corporation sells its vehicles to the White Motor Corporation who in turn sell them to the individual White Motor dealer who then sells the vehicle to the customer. The vehicle is given a road test by Freightliner which may be anywhere from 10 to 100 or more miles. The White-Freightliner Division of White Motor, in delivering the vehicle to the dealer, may put as much as 3,000 miles on the vehicle, for instance from Portland to Florida. The receiving dealer may put another 10 to 100 miles on the vehicle-in pre-delivery road testing, and then another 100 or so miles in making the actual delivery to the customer. The paperwork in keeping track of all of these incremental mileages in the normal process of delivering a vehicle seems burdensome and unnecessary, and certainly does nothing to influence the customer in deciding whether or not to purchase the vehicle. The customer has consumated the purchase with a downpayment or other financial arrangements prior to its manufacture (as is customary in this custom building industry) and fully recognizes the mileage difference between the point of manufacture and his planned point of use.

Even in dealing with the used truck, there is a serious question as to the need of this certified mileage since it refers to the chassis as a total and the engine and other major components of the vehicle are normally changed and serviced during the time of first ownership. It is more important for the potential used truck buyer to know when the engine was changed and overhauled and what work was done to the axles, transmissions and other major components rather than knowing how many miles were actually on the chassis.

Thus, we believe the total exclusion of vehicles over 10,000 pounds is warranted and that it be imperative to exclude this requirement on any vehicles to the first customer.

Norman B. Chew

WHITE MOTOR CORPORATION

January 5, 1979

Docket Section National Highway Traffic Safety Administration

RE: Docket No. 72-11, Notice 1 Odometer Disclosure Requirements

Gentlemen:

In response to the subject Notice, White Motor Corporation is (Illegible Words) submit its comments on the proposed requirements dealing with odometer disclosure. Since White manufactures and/or distributes heavy motor trucks with a gross vehicle weight of more than 24,000 pounds only, our comments are necessarily limited in their application to such vehicles.

Our comments on specific sections of the proposed requirements are as follows:

680.4 Disclosure of Odometer Mileage

(b) In many cases the transferer may not know that the odometer reading differs from the number of miles that the vehicles has actually traveled, but may have some reason to believe it is incorrect. It is believed that it would be desirable, therefore, to change the word "knows" to "has reason to believe".

(c) In the case of heavy trucks, many such vehicles are used in fleet operations and transferred from terminal to terminal. When traded (Illegible Word) they are often turned over to the vehicle manufacturer, distributor (Illegible Words) dealer at various locations. The (Illegible Words) kept at a central location and as a result a serious problem would be involved in obtaining the mileage (Illegible Word) shown on the vehicle odometer and adding this information to the (Illegible Words) (Illegible Lines)

Exactly the same problem as discussed under (Illegible Word) with respect to Certificate of Title would be encountered in requiring that the vehicle odometer reading be shown on the document transferring ownership to the transferee where no Certificate of Title is in effect for a motor vehicle.

1.5 Recommended Form for Disclosure

is our recommendation that consideration be given to a separate meter disclosure form at least in the case of heavy trucks. We commend that the wording "the odometer reading shown above is known to differ from the actual mileage" be changed to reflect the comments made above under Section 580.4 (b).

other problem that is presented is the determination of the "Transferor's present address" due to the fact that the odometer reading (Illegible Words) have to be added to the disclosure form at the truck's location rather than at the main address for the fleet operation. Therefore an indication would be given as to which address should be shown on the disclosure form.

our opinion, the proposed regulation is completely impractical for (Illegible Word) trucks. Many of these vehicles operate between 100.000 to (Illegible Word) les per year and the reliability of the highest quality odometers and odometer drive cables is such that failures are often experienced at (Illegible Word) substantially below the annual mileage operated. Our estimate that not more than 25% of the heavy trucks which we receive in trace (Illegible Word) the true vehicle mileage on the odometer. In fact, a retail buyer rely assumes that the odometer reading is the correct mileage, since in many cases a typical vehicle runs for months without a working odometer (Illegible Word) time during its useful life.

(Illegible Word) many cases, heavy trucks are equipped with hubodometers, particularly on vehicles are used in fleet operations. However, most such instruments are removed from the vehicle prior to trade in, and therefore cannot be (Illegible Word) to show the vehicle odometer reading, particularly when subsequently transferred.

(Illegible Words) our recommendation that the odometer disclosure requirements do not (Illegible Words) such vehicles due to the extremely high mileage (Illegible Word) (Illegible Words) by a very large percentage of such vehicles, which (Illegible Word) the (Illegible Words) of little value due to the fact that it probably (Illegible Words) indicate that there would be a greater variation (Illegible Lines)

NATIONAL ASSOCIATION OF MOTOR BUS OWNERS

January 10, 1973 (Illegible Text)

BEFORE THE DEPARTMENT OF TRANSPORTATIONS

National Highway Traffic Safety Administration

[49 CFR Part 580]

[Docket No. 72-31: Notice No. 1]

Odometer Disclosure Requirements

Notice of Proposed (Illegible Words)

STATEMENT OF NATIONAL ASSOCIATION OF (Illegible Words)

This statement is filed by the National Association of Motor (Illegible Words) (Illegible Words) (Illegible Lines) city motor bus industry (Illegible Words) all companies affiliated with the National Trailways Bus System and more than 400 other carriers not affiliated with either system. Collectively, these members of NAMBO provide more than 90 percent of the intercity motor bus transportation in the United States. In addition to its operator members, NAMBO has numerous associate members engaged in the manufacture of buses and other bus equipment.

For the reasons hereinafter stated, NAMBO is convinced that Title IV of the Motor Vehicle Information and Cost Savings Act, hereinafter referred to as the Act, does not apply to transfers of ownership of intercity coaches. Accordingly, intercity bus operators, in our opinion, would not be affected by the proposed odometer disclosure regulations even though transferors of intercity coaches are not specifically exempted.

Many motor carriers of passengers do not have odometers on their buses. Such carriers use an electronic speedometer which they feel has greater accuracy and durability. Obviously, Title IV of the Act and any odometer disclosure regulations issued thereunder would not apply to intercity bus operators who do not use odometers.

With respect to intercity bus operators who have odometers on their buses, such odometers are set to record mileage up to 99,999 miles. However, the typical intercity coach is operated more than one million miles prior to its sale as used equipment. When such buses are equipped with an odometer, the odometer would have made ten complete cycles. Obviously, purchasers of intercity buses are not entitled, in the language of Section 401 of the Act, "to rely on the odometer reading as an accurate reflection of the mileage actually travelled by the vehicle . . .". When the Congress found in Section 401 of the act that "an accurate [odometer] indication of the mileage travelled by motor vehicles assists the purchaser in determining its safety and reliability . . .", it could not have been thinking about purchasers of used buses who know that the odometer readings are usually at least ten times less than the actual mileage of the vehicles. Since the purpose of Title IV of the Act, as stated in Section 401, is "to establish certain safeguards for the protection of purchasers with respect to the sale of motor vehicles having altered or reset odometers . . .", and since that purpose is clearly inapplicable to transactions between buyers and sellers of intercity coaches, the National Highway Traffic Safety Administration should make clear in its proposed regulations that buyers and sellers of intercity coaches are not covered.

A further reason for excluding intercity buses from the proposed regulations is that the Congress did not intend to impose on the intercity bus industry requirements which it would be literally impossible to satisfy. For example, Section 407 of the Act provides that odometers which have been repaired or replaced --

"shall be adjusted to read zero and a notice in writing shall be attached to the left door frame of the vehicle by the owner or his agent specifying the mileage prior to repair or replacement of the odometer and the date on which it was repaired or replaced."

Intercity coaches, unlike passenger automobiles and trucks, have no left door frame to which the required notice could be attached.

Section 408(a) of the Act, pursuant to which the proposed odometer disclosure requirements would be issued, provides that the Secretary of Transportation shall prescribe rules requiring any transferor to give the following written disclosure to the transferee in connection with the transfer of ownership of a motor vehicle:

"(1) Disclosure of the cumulative mileage registered on the odometer;

(2) Disclosure that the actual mileage is unknown, if the odometer reading is known to the transferor to be different from the number of miles the vehicle has actually travelled."

Section 580.4(b) of the proposed regulations would implement Section 408(a) of the Act by requiring the transferor, if he knows that the odometer reading differs from the number of miles the vehicle has actually travelled, to inform the transferee by a notation on the document transferring ownership that the actual vehicle mileage is unknown. It is impossible for transferors of intercity coaches to comply with that provision of the statute and the implementing regulations, which is a further reason for concluding that intercity bus operators were not intended to be covered by the Act.

Compliance by intercity bus operators is impossible because in most instances the transferor of an intercity coach knows that the odometer reading differs from the number of miles the bus has actually travelled and because he also knows from his accounting and maintenance records the actual mileage the vehicle has accumulated. Thus, for an intercity bus operator to state that the odometer reading does not correspond with the actual mileage of the bus and that such actual vehicle mileage is unknown would be a false statement of a material fact.

Intercity bus operators maintain accurate records respecting accumulated mileage on vehicles. An operator's accounting department or bookkeeper collects and retains such information because of its importance in developing cost and other statistical data and also because the mileage data, which is derived from the trip reports of bus drivers, is the basis on which drivers are paid. Therefore, purchasers of used buses have no interest whatever in odometer readings but they are interested in the accounting and other records of the vendor which show the accumulated mileage on used vehicles.

In addition, intercity bus operators are required by Part 396 of the Motor Carrier Safety Regulations of the Bureau of Motor Carrier Safety to systematically inspect and systematically maintain buses and to keep records on such systematic inspection and maintenance. Accordingly, the maintenance departments or shop foremen of intercity bus operators also have accurate information respecting the actual miles travelled by a used bus.

"Motor vehicle," as used in Title IV of the Act, is defined in Section 2(15) thereof to include any vehicle "manufactured primarily for use on the public streets, roads, and highways . . .". Of course, intercity coaches are included within that definition of "motor vehicle." However, the term "odometer" as used in Title IV of the Act does not include odometers used on buses. Section 402(1) of the Act defines the term "odometer as an instrument for measuring and recording the actual distance a motor vehicle travels while in operation . . .". Congress' obvious intent was to require disclosure of the readings of odometers which are installed in vehicles for the purpose of informing owners, prospective purchasers, and others concerned about the accumulated mileage of the vehicle. Since odometers installed in intercity coaches are not intended to serve that purpose, they are not within the definition set forth in Section 402(1) of the Act.

Purchasers of intercity buses are sophisticated buyers and do not need the protection accorded by the Act to purchasers of automobiles and pick-up trucks. Accordingly, we believe the National Highway Traffic Safety Administration should amend its proposed regulations to state, in effect, that buses used in intercity service are not covered in the proposed regulations because such coverage clearly was neither authorized nor intended by the Congress.

On the other hand, if the Administration believes that the Congress intended to protect purchasers of intercity motor coaches and that such purchasers should be provided with information concerning the actual mileage of used buses, we suggest that such disclosure be the subject of a separate regulation. Intercity bus operators would be willing, if the Administration believes it necessary or desirable, to provide every purchaser of a used intercity bus with a statement of the actual accumulated mileage of the bus to be sold. Such information would be derived from accounting and maintenance records of the transferor. If for any reason, the transferor does not have accurate accounting or maintenance records concerning actual vehicle mileage, he could be required to advise the transferee that such records do not exist and that the actual mileage of the vehicle offered for sale is unknown.

In conclusion, we would be happy to consult with the National Highway Traffic Safety Administration in regard to the language of a proposed regulation applicable to sales of used intercity coaches if the Administration concludes that such a regulation is necessary or desirable

For the reasons set forth above, we do not believe Congress included intercity bus operators within the scope of Title IV of the Act and that any regulation on the subject which the Administration might adopt would not give purchasers of used buses any more information than they already receive from sellers of used buses.

CHARLES A. WEBB, President National Association of Motor Bus Owners

Due date: January 11, 1973