Don't Get Scammed: Avoid Odometer Fraud

April 20, 2009 — -- Odometer fraud is up 57 percent over the past four years, according to Carfax, the leading provider of vehicle history reports. And there's a good chance odometer fraud will leap again this year because, according to Carfax, nearly 3 million leased vehicles are expected to be turned in this year -- more than usual. Leased vehicles have a higher incidence of odometer fraud, presumably because many leases come with mileage limits and drivers may tamper with the odometers to avoid penalties.

While I'm throwing out stats to convince you to read on, bear in mind that Americans always buy more used cars than they do new ones, and that trend may also spike this year. After all, consumers are trying to save money in this tight economy and some are avoiding new American cars because they're worried about the future of the American car companies. So it's a perfect storm with a simple message: car buyer beware.

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By making a car appear to have lower mileage than it actually does, the seller can rake in thousands of extra dollars. The crooks call it "rolling back" or "spinning" an odometer.

Each year in America, bad guys tamper with the odometers on about half a million used cars. The typical rollback takes 30,000 miles off the life of a car. Since mileage is used as a gauge of how much wear and tear a used car has had, that translates into pure profit for the seller, pure misery for the buyer. AAA says the difference in value between a car with 40,000 miles and one with 70,000 miles is about $3,600. According to the National Highway Traffic Safety Administration, odometer fraud causes consumers to lose $4 billion a year.

So, how do crooks cover up odometer rollbacks? It's called "title washing." Crooks get the DMV to give them a new title for a vehicle and they lie about the mileage. Often they pose as mechanics or tow truck drivers, because some states allow these professionals to take possession of a vehicle if the owner fails to claim it. The state then issues a new title in the name of the mechanic or tow truck driver. The "washed" title can be used to cover up odometer fraud and other vehicle crimes.