U.S. Department 
 

of Transportation http://www.nhtsa.dot.gov
 

National Highway 

Traffic Safety 

Administration 

DOT HS 809 441 April 2002 

NHTSA Technical Report 

Preliminary Report: 
 

The Incidence Rate of Odometer Fraud 
 

This document is available to the public from the National Technical Information Service, Springfield, Virginia 22161. 
The United States Government does not endorse products or manufacturers. Trade or 

manufacturers’ names appear only because they are considered essential to the object of this 

report. 
TABLE OF CONTENTS 

TABLE OF CONTENTS.............................................................................................................III
 

EXECUTIVE SUMMARY ..........................................................................................................V 
 

CHAPTER 1 ..................................................................................................................................1 
 

INTRODUCTION AND BACKGROUND...................................................................................1 
 

RESULTS OF EARLIER STUDIES.......................................................................................................................3
 

CHAPTER 2 ..................................................................................................................................5 
 

THE INCIDENCE RATE OF ODOMETER ROLLBACK IN PASSENGER VEHICLES.........5 
 

NATIONAL SAMPLE............................................................................................................................................5
 

CARFAX.................................................................................................................................................................6
 

RESULTS..............................................................................................................................................................10
 

LIKELIHOOD OF ROLLBACK DURING THE FIRST 11 YEARS OF A VEHICLE=S LIFE...........................18
 

CONFIDENCE BOUNDS.....................................................................................................................................31
 

CHAPTER 3 ................................................................................................................................35 
 

THE INCREASED PRICE CONSUMERS PAY FOR PASSENGER VEHICLES DUE TO 

ODOMETER ROLLBACK.........................................................................................................35 
 

N.A.D.A. OFFICIAL USED CAR GUIDE ...........................................................................................................35
 

METHOD FOR AN INITIAL ESTIMATE...........................................................................................................37
 

RESULTS..............................................................................................................................................................43
 

ADJUSTMENT OF THE INITIAL ESTIMATE BASED ON KNOWN ROLLBACKS.....................................47
 

CONFIDENCE BOUNDS.....................................................................................................................................48
 

CHAPTER 4 ................................................................................................................................51 
 

STATE EFFORTS TO DETER ODOMETER FRAUD .............................................................51 
 

RESULTS..............................................................................................................................................................52
 

SUMMARY...........................................................................................................................................................65
 

CHAPTER 5 ................................................................................................................................67 
 

FEDERAL EFFORTS TO DETER ODOMETER FRAUD........................................................67 
 

ODOMETER FRAUD STAFF..............................................................................................................................67
 

FEDERAL INVESTIGATIONS............................................................................................................................68
 

ASSISTANCE TO STATES AND COMMUNITIES...........................................................................................70
 

ASSISTANCE TO THE PUBLIC .........................................................................................................................71
 

SUMMARY...........................................................................................................................................................72
 

RECOMMENDATIONS.............................................................................................................75 
 

iii 
iv 
 
EXECUTIVE SUMMARY 

Odometer fraud is the illegal practice of rolling back odometers to make it appear that vehicles 

have lower mileage than they actually do. This has historically been considered a significant 

problem for the American consumer. While any vehicle sold on the used car market could have 

been the object of odometer tampering, the problem has been considered to be most prevalent 

among late model vehicles which have accumulated high mileage in a relatively short period of 

time. Vehicles in fleets, such as lease fleets, rental fleets, or business company fleets typically 

fall into this category. When sold on the used car market, vehicles whose odometers have been 

rolled back, or "spun," can obtain artificially high prices, since a vehicle's odometer reading is a 

key indicator of the condition, and hence the value, of the vehicle. 

Consider, for example, 3-year-old cars whose odometers were rolled back from 80,000 to 30,000 

miles. Unwary consumers pay top dollar for such cars, believing that they are in prime condition, 

likely to give several years of nearly trouble-free service, and still have some resale value. 

Instead, they get a car with a lot of wear-and-tear, likely to experience irritating breakdowns and 

incur costly repairs over the next several years, and have little more than scrap value after that. 

If they had known the cars’ true mileage, they would, of course, not have been willing to pay 

nearly as much for them, and probably would not have bought them at all. 

In order to reduce the incidence of odometer fraud, Congress has enacted several laws to prohibit 

odometer tampering and to protect consumers. The most recent law (Public Law 99-579) is the 

Truth in Mileage Act (TIMA) of 1986. It requires the transferor (seller) to disclose the vehicle=s 

mileage on the title when a vehicle=s ownership is transferred. The regulations apply when a 

vehicle is sold or leased to auto auctions, car dealerships, and individuals. The title must be 

printed by a secure process, or if not printed, be set forth by a secure system, to decrease the 

possibility of counterfeiting or altering titles. These provisions help create a permanent record or 

“paper trail” on the vehicle=s title. In addition, the TIMA requires that auction companies 

establish and maintain records for at least four years following the date a vehicle is sold at 

auction. This provides law enforcement investigators with a better means to track the vehicle=s 

course from seller to consumer. The TIMA required all vehicle transfers to conform with the 

new disclosure requirement on April 29, 1989, unless NHTSA granted a time extension or 

approved an alternate motor vehicle mileage disclosure requirement if it was consistent with the 

purposes of the new law. NHTSA granted time extensions to most states. It took some states 

several years to comply with the new regulations. By April 18, 1994, all states were in 

compliance. 

The Congress specifically requested “a nationwide assessment of odometer fraud. This study, to 

be conducted by National Highway Traffic Safety Administration=s (NHTSA) Office of 

Programs and Policy, will determine the extent of used car dealer compliance with odometer 

disclosure requirements and the effectiveness of state enforcement activities.” (House Report 

103-190 of July 27, 1993). The Government Performance and Results Act of 1993 and 

v 
Executive Order 12866 (October 1993) also require agencies to review their existing programs 

and regulations from time to time. This report consists of the three components: 

(1) estimation of the incidence rate of odometer fraud and economic loss due to its 

inflation of the purchase price of passenger vehicles, 

(2) a survey of the states= efforts to combat odometer fraud, 

(3) an assessment of the Federal efforts to investigate and deter odometer fraud. 

However, this report is not an evaluation of the effectiveness of the Truth in Mileage Act in that 

it does not estimate how well the regulations reduced odometer rollback or helped catch 

criminals. Data to estimate rollback rates before the Truth in Mileage Act were not available. 

Thus, a typical evaluation, comparing the odometer rollback rate before the regulation to the rate 

after the regulation took effect, was not possible. This report estimates the current incidence of 

odometer fraud. 

The report estimates the probability of an odometer rollback during the first 11 years of a 

passenger vehicle=s life to the extent it can be detected in title transfer and other odometer 

reading data. The analysis uses a nationally representative sample of 10,000 passenger cars, 

pickup trucks, vans and sport utility vehicles and a national vehicle history database (Carfax) to 

identify vehicles with odometer discrepancies that suggest rollback - i.e., odometer readings on 

two separate occasions, and the later reading has the lower mileage. These data are used only for 

statistical purposes to estimate rollback rates for the overall vehicle population. No claim is 

made that these data alone, without a follow-up investigation, are sufficient to prove or disprove 

fraud in individual vehicle cases. 

The rate of odometer fraud over the life of the vehicle is 3.47 percent (confidence bounds from 

2.68 to 4.26 percent). That is a 3.47 percent chance that a vehicle would have its odometer 

rolled back at any point during the first 11 years of its life. This rate includes, but is not limited 

to the types of rollback that can be detected in title histories such as Carfax. An odometer may 

be rolled back and not identified as such in Carfax as long as the subsequent mileage is not lower 

than the previous mileage. This could happen in several ways. The most common way is to 

alter the mileage on the title to reflect the rolled-back odometer reading that is lower than the 

true mileage, although higher than any previously titled mileage. The incidence of such 

“hidden” rollbacks was estimated with a case-by-case analysis of a large file of known rollbacks. 

There are approximately 452,000 cases of odometer fraud per year in the United States based on 

the fraud rate and number of registered vehicles by vehicle age. 

This study also estimates the increased price consumers pay for odometer rollback at the time 

they purchase a vehicle: the difference between the inflated prices that consumers actually paid 

vi 
for the rolled-back vehicles and the prices they would have been willing to pay if they had 

known the true mileage. Those costs average $2,336 per case of odometer fraud. Given 452,000 

cases per year in the United States, that amounts to $1,056 million per year (confidence bounds 

from $737 million to $1,376 million). That sum does not include inflated financing, insurance 

and tax costs; additional amounts consumers pay for vehicle repairs; other consequential 

damages; the decreased resale value due to the vehicle having an altered odometer; or the many 

indirect or intangible costs of odometer fraud: time spent waiting for vehicle repairs and road 

service, consumers’ anger and frustration at being cheated and getting a car they wouldn’t have 

wanted, and costs of government programs to detect and deter odometer fraud. 

The increased cost consumers pay to purchase passenger vehicles with odometer rollback of 

$1,056 million per year makes odometer fraud one of the top crimes against property in the 

United States. By comparison, the Federal Bureau of Investigations estimated that in the year 

2000, auto theft resulted in direct losses of $2,900 million, arson $760 million, burglary $3,000 

million, and shoplifting $200 million.1 

To assess the states= efforts to combat odometer fraud, a questionnaire was sent to state 

Department of Motor Vehicle offices in October 1997. The major focus of the questionnaire was 

on the odometer disclosure requirements imposed on states by Federal Regulations. Forty-six 

states, the District of Columbia and Puerto Rico returned completed questionnaires. The 

questionnaires showed: 

$ 	 Most states had to make extensive changes to meet the new odometer disclosure 

requirements. Only 8 states met all the requirements before the April 29, 1989 deadline. 

All states met the new requirements by April 18, 1994. 

$ 	 Although all states met the minimum Federal regulatory requirements, very few states 

appeared to have a comprehensive detection program in place to identify cases of 

suspected odometer fraud. Only four states had taken all three of the following steps to 

detect and deter fraud: (1) routinely verify odometer readings submitted by title 

applicants, (2) alert the titling office or applicant when a vehicle is being titled with a 

lower mileage than indicated on a previous title, and (3) keep records of odometer 

readings at any time other than titling, such as at annual emissions or safety inspections. 

$ 	 Fewer than ten states routinely notified law enforcement agencies when the odometer 

reading shows signs of alterations on the title being surrendered. 

$ 	 Most applicants do not request a check of odometer reading or title history, which is an 

inexpensive service. 

1 Crime in the United States - 2000 Uniform Crime Reports, Federal Bureau of Investigations, 

U.S. Department of Justice, Washington, DC. 

vii 
$ 	 Almost 65 percent of the states were aware of odometer fraud investigations being 

conducted in the last year. But only seven states had information indicating that the new 

disclosure requirements are deterring odometer fraud. 

• 	 Federal regulations require dealers to maintain records systems that include odometer 

readings of vehicles sold in the last five years. However, NHTSA did not specifically 

evaluate how completely dealers actually comply with the regulations. 

Although odometer fraud is not a top criminal priority in most states, states have some detection 

programs in place to identify cases of suspected odometer fraud and law enforcement agencies to 

investigate such cases. Data are not available to compare current and previous enforcement 

activities so changes in state enforcement activities cannot be calculated. 

Since 1978, NHTSA has maintained at its headquarters location, in Washington, D.C., an 

Odometer Fraud Enforcement Program. The staff consists of eight employees, four of them field 

investigators. Each field investigator covers approximately one-quarter of the United States. 

For the most part, this program has concentrated on the investigation of specific cases of alleged 

odometer fraud, primarily in small geographical areas suspected of being (or known to be) 

"hotbeds" for such practice. Cases investigated by NHTSA are usually turned over to the U. S. 

Department of Justice (DOJ), or to state enforcement authorities for prosecution or further legal 

action. 

NHTSA=s prime weapon to deter odometer fraud is its power to investigate cases. NHTSA 

refers most completed and substantiated odometer fraud cases to the DOJ for prosecution. The 

DOJ has prosecuted more the half of the NHTSA cases and has convicted 138 defendants in 

these cases over the last 11 years. 

NHTSA=s odometer fraud program also helps the states to deter odometer fraud. NHTSA assists 

with state investigations, trains state titling clerks and investigators, and funds states to initiate or 

enhance their odometer fraud programs. The budget for these grants has been $150,000 in each 

of the last two years. 

NHTSA is also deterring odometer fraud by notifying victims that they have been defrauded. 

NHTSA sends letters to victims advising them that they have been defrauded and how to recover 

their losses, and letting them know that when they sell their vehicle they must disclose to the 

buyer that the odometer reading is not the true mileage. This ensures that future owners of these 

vehicles will not be defrauded and helps victims recover their losses mostly from the retailers. 

This in turn makes the retailers leery of purchasing vehicles from wholesalers who have sold 

them vehicles with rolled back odometers, so the retailers make more of an effort to ensure that 

the odometers have not been rolled back in the vehicles they are purchasing from wholesalers. 

viii 
ix 
 

CHAPTER 1 

INTRODUCTION AND BACKGROUND 

Odometer fraud is the illegal practice of rolling back odometers to make it appear that vehicles 

have lower mileage than they actually do. This has historically been considered a significant 

problem for the American consumer. While any vehicle sold on the used car market could have 

been the object of odometer tampering, the problem has been considered to be most prevalent 

among late model vehicles which have accumulated high mileage in a relatively short period of 

time. Vehicles in fleets, such as lease fleets, rental fleets, or business company fleets typically 

fall into this category. When sold on the used car market, vehicles whose odometers have been 

rolled back, or "spun," can obtain artificially high prices, since a vehicle's odometer reading is a 

key indicator of the condition, and hence the remaining value, of the vehicle. 

The Congress specifically requested “a nationwide assessment of odometer fraud. This study, to 

be conducted by National Highway Traffic Safety Administration=s (NHTSA) Office of 

Programs and Policy, will determine the extent of used car dealer compliance with odometer 

disclosure requirements and the effectiveness of state enforcement activities.” (House Report 

103-190 of July 27, 1993). The Government Performance and Results Act of 1993 and 

Executive Order 12866 (October 1993) also require agencies to review their existing programs 

and regulations from time to time. This report consists of the three components: 

(1) the incidence rate of odometer fraud and economic loss due to its inflation of the 

purchase price of passenger vehicles, 

(2) the states= efforts to combat odometer fraud, 

(3) an assessment of the Federal efforts to investigate and deter odometer fraud. 

This study attempts to estimate the incidence rate of odometer rollback based on nationally 

representative data. None of the previous studies on odometer fraud produced a comparable 

national estimate. Most of the previous studies estimated the rollback rate for leased vehicles. 

One previous study estimated the rollback rate on auction vehicles but only auction vehicles 

bought and sold in Pennsylvania. Vehicles auctioned to the highest bidder by large wholesalers 

are known as auction vehicles. Auction companies sell only a subset of cars. Some cars are 

never sold, are sold privately, or are sold by the original dealer and never get involved with 

auction companies. This evaluation provides national data on the incidence rate of odometer 

fraud, not only to provide an accurate assessment of the magnitude of the problem, but also to 

provide information on which to base future Federal and state programs aimed at deterring this 

illegal practice. 

1 
Typically, the rollback artist initially purchases the vehicle legitimately on the wholesale market 

from an auction house. The artist picks out a fleet car, two or three years old, showing mileage 

higher than “average” for a vehicle of that age. The odometer is rolled back to a mileage that is 

considered “average” or “low” for a vehicle of that age, increasing its resale value according to 

the “blue book.” The interior is cleaned thoroughly, new brake or gas pedals are installed if 

necessary, and the vehicle is sold at an inflated price to an unsuspecting dealer or auctioneer. 

In order to reduce the incidence of odometer fraud, the Congress enacted a 1972 law (Title IV, 

Motor Vehicle Information and Cost Savings Act) to prohibit odometer tampering and to provide 

certain other consumer protections against these deceptive practices. To implement this statute, 

the NHTSA promulgated a Federal regulation which required a written statement, from the 

transferor to the transferee, attesting to the vehicle's odometer reading whenever ownership of a 

vehicle was transferred (49 C.F.R. Part 580, March 1, 1973). Subsequent amendments in 1978 

and 1988 strengthened the regulation by requiring: (1) that odometer disclosure be a condition 

of the transfer of title (of ownership) of a vehicle, and (2) that dealers, distributors, and other 

marketers of motor vehicles maintain specific records of odometer readings in order that a "paper 

trail" of the history of the vehicle be available to facilitate the carrying out of investigations in 

cases where odometer tampering is suspected. The most recent amendment to Regulation 580 

was issued in response to the Truth in Mileage Act of 1986 (Public Law 99-579). Prior to the 

1990-1991 period when most states began to issue titles in conformance with the 1988 

amendment to Part 580, states generally did not require odometer readings to be recorded on the 

title. 

However, this report is not an evaluation of the effectiveness of the Truth in Mileage Act in that 

it does not estimate how well the regulations reduced odometer rollback or helped catch 

criminals. Data to estimate rollback rates before the Truth in Mileage Act were not available. 

The report estimates the current (2001) incidence of odometer fraud. 

Federal regulations (49 CFR Part 580, Appendix A) also require the vehicle title form and the 

odometer disclosure forms to be produced by a secure printing process to help deter or detect 

counterfeiting and/or unauthorized reproduction. Secure printing processes may involve intaglio 

printing, high-resolution printing, micro-line printing, holograms, security paper, erasure 

sensitive printing, etc. All dealers and distributors of motor vehicles are required to retain for 

five years a copy of each odometer statement they issue and receive. In addition to the odometer 

reading, other information in the records includes the name and address of the most recent 

owner, the name and address of the buyer, and the Vehicle Identification Number (VIN), and the 

date of transfer. Auction companies and fleet lessors are required to maintain similar records for 

vehicles they handle. The records are to be kept in an order that is appropriate to business and 

that permits systematic retrieval. The requirements of 49 CFR Part 580 apply to motor vehicles 

that are less than 10 years old and less than 16,000 pounds Gross Vehicle Weight Rating 

(GVWR). 

2 
Before these laws and regulations took effect, the rollback artist could easily obtain a new title 

for the car. Even after the laws, they still had ways to obtain new titles, despite the existence of 

a “paper trail” showing earlier mileage readings: For example, before the sale, the rollback artist 

could doctor the title to match the mileage on the rolled-back odometer. Many rollback artist use 

stencils, glue or nail polish remover to change the numbers on the title. The number “eight” is 

doctored to look like a “three” on the vehicle that had originally 80,000 miles. Then the 

doctored title is taken to a state=s Department of Motor Vehicles for a new title. In some states, 

the Department of Motor Vehicles issues same-day, over-the-counter titling without checking the 

mileage against prior out-of-state titling. In some instances, the seller may not have recorded the 

mileage reading before selling the vehicles, allowing the buyer to record a lower mileage without 

altering the title. 

RESULTS OF EARLIER STUDIES 

Most of the previous studies on odometer fraud estimated the odometer rollback rate in one-time 

lease vehicles. A 1985 study by the Illinois Attorney General=s Consumer Protection Division1 

tracked 5,000 randomly chosen vehicles sold in a one year period by a large lease car company. 

The lease company provided the VIN, year, make, mileage, sale date, and purchaser. The 

vehicles were tracked in 23 states through the State of Illinois Department of Law Enforcement 

computer and National Law Enforcement Telecommunications Network (NLETS). NLETS 

directs computer inquires to each of the target states to locate the vehicle by the VIN. Twentythree states was “the maximum number of states which could be accessed without unduly 

loading down the (NLETS) switching system” at the time of the study. The Attorney General 

then requested the titling information from the respective states including the mileage readings. 

The mileage provided by the lease company and the subsequent mileage from states were used to 

identify rolled back odometers. The study found a overall rollback rate of 49.8 percent among 

one-time lease vehicles for which subsequent mileages were reported. 

A more recent study (1992) by the Pennsylvania Office of Attorney General2

 also tracked 

vehicles sold by two major leasing companies. A systemic random sample of 4,368 cars was 

selected for further review from 49,229 vehicles sold by the leasing companies during a six 

month period, but only 3,630 vehicles were studied. These vehicles were tracked in all 50 states 

in order to determine if their odometers were rolled back prior to resale to a consumer. The 

study found that 5.07 percent of the leased vehicles resold had their odometers rolled back. The 

average rollback was 53,123 miles. The estimated direct consumer loss (inflation of the resale 

1

Synder, P., A Study and Statistical Analysis of Odometer Tampering by Subsequent 

Purchasers of One-Time Lease Vehicles, NHTSA Report No. DOT HS 806 859, Washington, 

DC, 1985. 

2

Kelly, J., A Study & Statistical Analysis of Odometer Tampering by Purchasers of OneTime Lease Vehicles, NHTSA Report, Washington, DC, 1992. 

3 
price) was $.10 per mile for high mileage full size vehicles. The average consumer damage for 

each rollback amounted to $6,653 when excess sales tax, excess finance charges, and higher 

collision insurance costs were included. 

In order to obtain results directly comparable to the earlier Illinois study, Pennsylvania also 

limited their analysis to a single lease company that also participated in the Illinois study, and 

tracked its vehicles only in the 23 states considered by Illinois. This limited study produced a 

3.91 percent rollback rate, substantially lower than the 49.8 percent rate found in the 1985 study. 

The report credits this apparent reduction to the Truth in Mileage Act of 1986 and increased 

criminal prosecutions, but recommended the creation of a nationwide odometer data base to 

further deter odometer tampering. 

The only known estimate of the odometer fraud incidence rate from a sample that included nonlease vehicles comes from a 1982 study3

 of vehicles sold at auction in the state of Pennsylvania. 

According to NHTSA's 1988 Regulatory Evaluation which implemented the Truth in Mileage 

Act, this study estimated a rollback rate of 20 percent. There was no breakout as to the source of 

vehicles auctioned. Presumably, they could have included lease vehicles that were returned to 

the dealer at the end of the lease, vehicles from rental fleets, privately owned vehicles, etc. 

Although this study includes vehicles other than lease vehicles, it certainly does not contain a 

nationally representative sample of all vehicles. The study covered vehicles sold at auction in 

Pennsylvania, more than one time, and consequently was not able to detect cases where rollback 

may have occurred for vehicles which came from other states. 

None of these studies have been designed to obtain nationally representative results. The two 

NHTSA-sponsored studies by the Attorneys General Offices in Illinois and Pennsylvania do not 

permit inferences to be made about the actual incidence rate of odometer fraud in the national 

population of vehicles. The Pennsylvania auction house study could not estimate the rollback 

rate of vehicles that came from other states. 

3

Kelly, J., Odometer Tampering Involving Vehicles Sold at Pennsylvania Auctions, 

Pennsylvania Office of Attorney General, Bureau of Consumer Protection, 1982. 

4 
CHAPTER 2 

THE INCIDENCE RATE OF ODOMETER ROLLBACK IN PASSENGER VEHICLES 

Odometer rollback may have occurred when the mileage for a given vehicle on a later date is less 

than the mileage recorded on an earlier date. Other events that could result in a lower odometer 

reading at a later date include: (1) passing 100,000, when the odometer only goes up to 100,000; 

(2) a malfunctioning odometer. One way to identify rollback is to compare the odometer reading 

at different points in time. Federal regulations require the odometer reading or mileage be 

recorded when vehicle=s ownership is transferred. These regulations apply when a vehicle is 

sold or leased to auto auctions, car dealerships, and individuals. 

The odometer reading is most commonly documented on the Vehicle Title itself. The Separate 

Disclosure Form, Power of Attorney Form, or Disclosure Form for Leased Vehicles are also 

used to document the odometer reading. The Separate Disclosure Form is used when there is no 

title or the title has no space to record this information. The Power of Attorney Form is used 

when the transferor title is held by a lienholder. The Disclosure Form for Leased Vehicles is 

what its name implies. 

There are two other possible sources of odometer reading data, although not required by federal 

regulations. State vehicle inspection stations may record the odometer reading when a vehicle is 

inspected. Dealerships and automobile manufacturers may record the odometer reading when 

the vehicle is serviced under warranty. 

The purpose of this analysis is to obtain a best estimate of the incidence rate of odometer fraud in 

the United States to the extent it can be detected in title transfer and other odometer reading data. 

This analysis uses a nationally representative sample of 10,000 passenger cars, pickup trucks, 

vans, and Sport Utility Vehicles (SUVs) and a national vehicle history data base to identify 

vehicles with rolled back odometers. These data are used only for statistical purposes to estimate 

rollback rates for the overall vehicle population. No claim is made that these data alone, without 

a follow-up investigation, are sufficient to prove or disprove fraud in individual vehicle cases. 

This analysis determines the probability that a passenger vehicle would have its odometer rolled 

back at any point during the first 11 years of its life. The rate of odometer fraud in this analysis 

is 3.47 percent (confidence bounds from 2.68 to 4.26 percent). 

NATIONAL SAMPLE 

Budget constraint and time constraints limited the size of the nationally representative sample of 

passenger vehicles studied to identify odometer fraud. R. L Polk provided a random sample of 

10,000 Vehicle Identification Numbers (VINs) for passenger cars, pickup trucks, vans and SUVs 

5 
from a census of these vehicles registered in the United States. The sample contained 1989 

through 2001 model year vehicles (11 years old or less in 2000). 

CARFAX 

In this analysis, a national data base called Carfax was used to identify which of the 10,000 

vehicles in the sample experienced a reduction in its odometer reading from one date to the next 

one, possibly indicating a rolled back odometer. Carfax1

 is a comprehensive vehicle history 

database. The vehicle histories in Carfax include the date and number of title transactions, title 

number, type of title, odometer reading, city and state in which the title was issued. The vehicle 

histories also include if the vehicle was salvaged, junked, and/or damaged by flood. Carfax 

collects this information from State title records, State registration records, auto auctions, 

salvage auction, and rental/fleet vehicle companies. Most states regularly supply this 

information to Carfax, normally weekly or monthly depending on the state. All state agencies 

are supplying information to Carfax at the time of this analysis. Carfax maintains a complete 

historical data file back to 1992. 

Title transfers supply most of the odometer reading data in Carfax. At the time of the study, 18 

states were also providing odometer reading data collected when the vehicle was inspected for 

emissions. In eight of these states, the odometer reading at emission inspections is rounded to 

the nearest thousand. In two of these states, the odometer reading is missing most of the time. 

Carfax does have a few readings when service contracts were issued on vehicles and when these 

vehicles were serviced. But Carfax does not include the majority of the readings from vehicle 

maintenance records at dealers= service departments, the only other major untapped source of 

odometer readings. 

The information in Carfax is classified by the VIN. Figure 2-1 shows an example of a simple 

vehicle history from Carfax. 

NHTSA requires that two problems be reported on the title: “Exceeds Mechanical Limit” and 

“Not Actual Mileage.” When a vehicle is transferred to a new owner, the transferor must certify 

that the odometer reading reflects the actual mileage, or that it reflects the amount of mileage in 

excess of the designed mechanical odometer limit, or that the odometer reading does not reflect 

the actual mileage. “Exceeds Mechanical Limits” occurs in earlier model year vehicles when the 

odometer was only five digits and not able to record mileage over 100,000 miles. “Exceeds 

Mechanical Limits” and “Not Actual Mileage” information was valuable to us. It helps us to 

decide if a mileage decrease was odometer rollback. 

Carfax flags a vehicle with “Potential Odometer Rollback” if on two sequential odometer 

readings less than a year apart, the later reading is at least 3,000 miles lower than the earlier 

1

Carfax is owned by R. L. Polk, Inc. and is located in Fairfax, VA. 

6 
---------------------------------------------------------------------------- 

---------------------------------------------------------------------------- 

reading. Anything less than that Carfax determine to be within a tolerable period of time where 

records coming from more than one data source might be affected by some type of time lag. 

Carfax also flags vehicles with “Potential Odometer Rollback” if on two sequential odometer 

readings more than a year apart, the later reading is at least 1 mile lower than the earlier reading. 

On records more than a year apart, it is entirely possible for the vehicle's mileage to have gone 

up significantly and rolled back to a mileage 1 mile lower than the earlier reading. 

FIGURE 2-1: SIMPLE TITLE HISTORY WITHOUT ODOMETER ROLLBACK 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1G1JC1441R7XXXXXX 
 

Yr/Mfg: 1994 Chevrolet 
 

Model: Cavalier 
 

Body: 2D Cpe. Compact car 
 

Engine: 2.2L L4 MPI OHV 8V 
 

Fuel: Gasoline 
 

Driveline: Front-wheel Drive 
 

Aspiration: Normal 
 

Country Mfg. United States 
 

Exceeds Mechanical Limits Title----------> Checked. No Problem Title Found. 
 

Not Actual Mileage Title-----------------> Checked. No Problem Title Found. 
 

SECTION 3 ODOMETER ROLLBACK CHECK 
 

RESULT: No odometer rollback detected in the Carfax database. 

DATE ODOMETER INFORMATION GENERAL 

REPORTED READING SOURCE COMMENTS 

08/15/1994 11 Missouri Title issued 

Motor Vehicle Dept. First lien reported 

XXXXXXXXXX, MO 

Title #XXXXXXXX 

06/19/2000 78,154 	 Missouri Title issued 

Motor Vehicle Dept. 

XXXXXX, MO 

Title #XXXXXXXX 

The history shown in Figure 2-1 is for a 1994 Chevrolet Cavalier. This vehicle was originally 

bought and titled in Missouri on August 15, 1994 with 11 miles. A new title was issued on June 

19, 2000 when the vehicle had 78,154 miles. There is no evidence of odometer rollback here. In 

addition, neither of these readings “exceeded mechanical limits” or were “not actual mileage.” 

Figure 2-2 shows another example of a more complex vehicle history from Carfax. This 

example has three interstate transfers and two emissions inspections. The state title transactions 

7 
provide more information than the emission inspections, but both provide the information this 

analysis requires: odometer reading and date. Since mileage increased with each transaction, 

there is no evidence of odometer rollback. 

Figure 2-3 is an example of a vehicle with likely odometer rollback. In May 1996, this one-year 

old rental car had 42,085 miles. The odometer reading was 12,086 miles a month later when this 

car was titled or registered in New Mexico. This is a mileage decrease of almost 30,000 miles. 

Indeed, Figure 2-3 is what we would expect to see in a “classic” case of odometer rollback: a 1-

year old rental car transformed from high mileage (42,085) to low mileage (12,086). These data 

are not absolute proof that odometer fraud occurred (e.g., it is theoretically possible that a 

mileage was incorrectly recorded, or that the odometer malfunctioned). But based on the 

information contained in the vehicle history, the mileage discrepancy, vehicle age, and mileage, 

the most probable explanation is that the odometer was rolled back. 

8 
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FIGURE 2-2: MULTIPLE RESALES WITHOUT ODOMETER ROLLBACK 
 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: JH4DA9352LSXXXXXX 
 

Yr/Mfg: 1990 Acura 
 

Model: Integra LS 
 

Body: 2D H/B Compact car 
 

Engine: 1.8L L4 PFI DOHC 
 

Fuel: Gasoline 
 

Driveline: Front-wheel Drive 
 

Aspiration: Normal 
 

Country Mfg. Japan 
 

DATE ODOMETER INFORMATION GENERAL 
 

REPORTED READING SOURCE COMMENTS 
 

01/14/1992 24,520 	 Washington Title or registration 

Motor Vehicle Dept. issued 

Title #XXXXXXXXXX First lien reported 

05/25/1993 24,943 	 Washington Title or registration 

Motor Vehicle Dept. issued 

XXXXXX, WA 

Title #XXXXXXXXXXXXXXX 

03/24/1994 43,017 	 Nebraska Title issued 

Motor Vehicle Dept. 

XXXXX, NE 

Title #XXXXXXXXXXX 

11/03/1994 55,727 	 Colorado Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXX, CO 

Title #XXXXXXXXX 

12/06/1994 	 Washington Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXX, CO Duplicate title issued 

Title #XXXXXXXXXXXXXXX 

11/06/1996 82,661 	 Colorado Passed emissions inspection 

Inspection Station 

12/02/2000 128,673 	 Colorado Passed emissions inspection 

Inspection Station 

9 
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FIGURE 2-3: LIKELY ODOMETER ROLLBACK 
 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 2G4WB52M8S1XXXXXX 
 

Yr/Mfg: 1995 Buick 
 

Model: Regal Custom 
 

Body: 4D Sedan Mid-size car 
 

Engine: 3.1L V6 SFI OHV 12V 
 

Fuel: Gasoline 
 

Driveline: Front-wheel Drive 
 

Aspiration: Normal 
 

Country Mfg. Canada 
 

DATE ODOMETER INFORMATION GENERAL 

REPORTED READING SOURCE COMMENTS 

02/01/1995 Texas Registered as 

Motor Vehicle Dept. rental vehicle 

XXXX XXXXXXXXXX, FL (major car rental company) 

03/30/1995 5 	 Texas Title or registration 

Motor Vehicle Dept. issued 

XXXX XXXXXXXXXX, FL First lien reported 

Title #XXXXXXXXXXXXXXXXX 

05/22/1996 42,085 	 Auto Auction Vehicle Sold 

Mountain Region 

06/15/1996 12,086 	 New Mexico Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXXXX, NM POTENTIAL ODOMETER 

Title #XXXXXXXXXXXXXXX ROLLBACK 

RESULTS 

Out of the random sample of 10,000 VINs, Carfax provided vehicle histories for 9,836 VINs. 

Only 164 vehicles in the Polk sample were not found in Carfax Therefore, Carfax is missing 

only 1.6 percent of the registered passenger cars, pickup trucks, vans, and SUVs. Carfax flagged 

165 of the 9,836 vehicles as having a “potential odometer rollback” defined as a lower reading 

on a subsequent date, without any statement that the lower reading was due to “exceeding 

mechanical limits” or a malfunction. But a further case-by-case examination suggests that many 

of these cases are unlikely to have involved odometer rollback. Clerical errors, unrealistic 

odometer readings, or odometer readings possibly over 100,000 miles and not indicated as such 

may account for the discrepancy in the odometer readings. 

10 
A four-person NHTSA panel reviewed all the 165 flagged cases to identify which cases most 

likely involved odometer fraud. The panel classified the “potential odometer rollback” cases as 

likely odometer fraud, possible odometer fraud, or no odometer fraud. The cases the panel 

classified as “likely” or “possible” odometer fraud are the panel=s best guess based on their 

interpretation of the information in Carfax. The panel has no proof that any of these were 

actually odometer fraud. They have not seen these vehicles or investigated them individually. 

The panel classified many of the cases as no odometer fraud. As shown in Table 2-1, the panel 

believes that 97 of 165 cases most likely did not involve odometer fraud. 

TABLE 2-1 

Classification of Potential Odometer Fraud 

Cases 

Likely Odometer Fraud 37 

Possible Odometer Fraud 31 

No Odometer Fraud 97 

Total 165 

Below is a summary of reasons why the panel classified a case as not involving odometer fraud. 

Cases are presented to illustrate each reason. 

$ 	 The mileage appears to be over 100,000 miles. In some of the cases, not all the entries 

after the vehicle goes over 100,000 miles are listed as such. Auction houses are not 

required to report if the mileage exceeds mechanical limits so auction houses report the 

actual mileage on the odometer. Auto auction transactions do not report “Exceeds 

Mechanical Limits.” 

11 
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FIGURE 2-4: MILEAGE UNDOUBTEDLY OVER 100,000 
 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1FACP36X5KXXXXXX 
 

Yr/Mfg: 1989 Ford 
 

Model: Tempo GL 
 

Body: 4D Sedan Compact car 
 

Engine: 2.3L L4 TBI HSC OHV 
 

Fuel: Gasoline 
 

Driveline: Front-wheel Drive 
 

Aspiration: High Swirl Combustion 
 

Country Mfg. United States 
 

DATE ODOMETER INFORMATION GENERAL 
 

REPORTED READING SOURCE COMMENTS 
 

04/12/1989 10 	 North Carolina Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXXXX, IL 

Title #XXXXXXXXXX 

04/17/1995 50,055 	 Virginia Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXXXX, VA 

Title #XXXXXXXX 

07/23/1997 20,132 Auto Auction Vehicle Sold 

Eastern Region POTENTIAL ODOMETER 

ROLLBACK 

08/22/1997 20,138 	 Virginia EXCEEDS MECHANICAL LIMITS 

Motor Vehicle Dept. TITLE ISSUED 

XXXXXXXX, VA 

Title #XXXXXXXX 

In Figure 2-4, the mileage on July 23, 1997 was undoubtedly 120,132, not 20,132 (but the auto 

auction house did not report it as such). A month later when this car was titled or registered in 

Virginia the odometer reading is classified as “Exceeds Mechanical Limit” so the mileage was 

probably 120,138. It is most unlikely that the car was rolled back 29,923 miles and then driven 

100,006 miles in the next month. 

$ 	 The odometer readings from emission inspections are not federally required. It is strictly 

up to the state. Some states do a better job of capturing this data than other states. Even 

in states that do a good job, it appears that in some cases the actual mileage on the 

12 
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odometer is recorded even if the odometer reading exceeds the mechanical limit of the 

odometer. 

FIGURE 2-5: EMISSIONS INSPECTION MILEAGE UNDOUBTEDLY OVER 100,000 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1FACP5742LAXXXXXX 

Yr/Mfg: 1990 Ford 

Model: Taurus GL Wagon 

Body: 4D Sedan Mid-size S.W. 

Engine: 3.8L V6 TBI OHV 

Fuel: Gasoline 

Driveline: Front-wheel Drive 

Aspiration: Normal 

Country Mfg. United States 

10/18/1990 12,787 California Passed emissions inspection 

Inspection Station 

XXXXXXXXX, CA 

09/23/1993 52,527 California Passed emissions inspection 

Inspection Station 

XXXXXXXXX, CA 

03/10/1995 72,418 Auto Auction Vehicle Sold 

Pacific SW Region 

04/11/1995 72,526 California Passed emissions inspection 

Inspection Station 

XXX XXXXX, CA 

04/12/1995 72,563 California 

Motor Vehicle Dept. 

02/01/1997 92,114 California Passed emissions inspection 

Inspection Station 

XXX XXXXX, CA 

02/03/1999 18,137 California Passed emissions inspection 

Inspection Station POTENTIAL ODOMETER 

XXX XXXXX, CA ROLLBACK 

In Figure 2-5, the mileage on February 3, 1999 was probably 118,137 although the odometer had 

18,137. This car did not change owners; the owner just had the scheduled emissions inspection. 

13 
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$ 	 The odometer readings appear to contain clerical errors such as missing a digit, adding an 

extra digit, transposing digits, or replacing a digit. 

FIGURE 2-6: LIKELY CLERICAL ERROR 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1B7GL26X6KSXXXXXX 
 

Yr/Mfg: 1989 Dodge 
 

Model: Dakota 
 

Body: Pickup 2WD Large P/U 
 

Engine: 3.9L V6 TBI OHV 
 

Fuel: Gasoline 
 

Driveline: Rear-wheel drive 
 

Aspiration: Normal 
 

Country Mfg. United States 
 

02/16/1991 58,501 	 California Passed emissions inspection 

Inspection Station 

XXXXXX, CA 

03/11/1993 126,046 	 California Passed emissions inspection 

Inspection Station 

XXXXXX, CA 

01/28/1995 193,266 	 California Passed emissions inspection 

Inspection Station 

XXXXXX, CA 

04/01/1997 262,625 	 California Passed emissions inspection 

Inspection Station 

XXXXXX, CA 

07/31/1997 262,782 	 Auto Auction Vehicle Sold 

Pacific SW Region 

02/23/1999 284,334 	 California Failed emissions inspection 

Inspection Station 

XXXXXX, CA 

03/10/1999 28,560 	 California Passed emissions inspection 

Inspection Station POTENTIAL ODOMETER 

XXXXXX, CA ROLLBACK 

In Figure 2-6, it appears the 28,560 miles on March 10, 1999 is missing a digit. The truck failed 

the emissions inspection on February 23 and passed it two weeks later. It probable accumulated 

14 
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more mileage during that time frame, so that it had 284,560 or 285,560 miles on March 10, 1999. 

The truck did not change owners so it is highly improbable the odometer was rolled back 

255,774 miles. 

• ODOMETER READINGS THAT HAVE “NOT ACTUAL MILEAGE” RECORDED IN 

SOME TRANSACTIONS BUT OMITTED ON OTHERS. 

FIGURE 2-7: REPORTED MILEAGE IS NOT ACTUAL MILEAGE 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: JT2EL46B4N0XXXXXX 

Yr/Mfg: 1992 Toyota 

Model: Tercel 

Body: 2D Sedan Subcompact car 

Engine: 1.5L L4 EFI 

Fuel: Gasoline 

Driveline: Front-wheel Drive 

Aspiration: Normal 

Country Mfg. Japan 

01/23/1992 22 Louisiana Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXX, LA First lien reported 

10/26/1993 21,257 Louisiana Title or registration 

Motor Vehicle Dept. issued 

XXXXX, LA 

Title #XXXXXXXX 

07/17/1996 1,756 Louisiana NOT ACTUAL MILEAGE TITLE 

Motor Vehicle Dept. ISSUED 

XXXXX, LA 

07/17/1996 1,756 Louisiana Title or registration 

Motor Vehicle Dept. issued 

XXXXX, LA POTENTIAL ODOMETER 

Title #XXXXXXXX ROLLBACK 

07/17/1996 1,756 Louisiana NOT ACTUAL MILEAGE TITLE 

Motor Vehicle Dept. ISSUED 

XXXXX, LA 

Title #XXXXXXXX 

08/13/1999 56,688 Louisiana NOT ACTUAL MILEAGE TITLE 

Motor Vehicle Dept. ISSUED 

XXXXX, LA 

15 
In Figure 2-7, since two of the three transactions on July 17, 1996 declare that 1,756 is not the 

true mileage, this discrepancy with the previous reading (21,257) is not an attempt to defraud. 

Carfax flagged this case because one of the three transactions at 1,756 miles did not include the 

“Not Actual Mileage” disclaimer. 

The NHTSA panel found that 97 of the 165 flagged cases resembled the examples in Figures 2-4 

- 2-7 and were quite unlikely to have involved odometer rollback. The remaining 68 cases have 

odometer discrepancies that could well indicate rollback, and have no evidence that would 

disqualify them as rollbacks. These are further classified as “likely” odometer fraud (37 cases) 

and “possible” odometer fraud (31 cases) based on the age and mileage of the car. “Likely” 

cases resemble the “classic” example in Figure 2-3, where a high-mileage used car (42,000 miles 

in 1 year) is transformed into a car with below-average miles (12,000). The amount of rollback 

is enough to increase the resale value of the car substantially, but not so great as to strain the 

credulity of buyers. “Possible” cases are those where the reported odometer discrepancy is more 

unusual, and where the panel considered but eventually rejected the possibility they were 

looking at data in error rather than a rollback. 

Figure 2-8 is an example of a case the panel classified as possible odometer fraud. This 1995 

Dodge Intrepid had 56,000 miles on December 19, 1998 and a year later it had 26,111 miles. In 

this case, a 4-year-old car with mileage slightly lower than average is transformed into very low 

mileage. The average mileage for a 4-year-old car is between 60,001 and 65,000 miles 

according to the N.A.D.A. Official Used Car Guide. The panel decided in this case it was 

possible that someone rolled back the odometer to an unbelievably low mileage and found a 

gullible buyer. In Figure 2-3, a case the panel classified as likely odometer fraud, the car went 

from high mileage to a reasonable low mileage for a 1 year old car, slightly less than NADA=s 

average mileage. 

From here throughout the rest of this report, the likely odometer fraud and possible fraud cases 

will be considered together as odometer fraud. The possible fraud cases are included so as not to 

underestimate the rate of odometer fraud. But if some of the possible cases are not odometer 

fraud then our estimate will be inflated. 

16 
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FIGURE 2-8: POSSIBLE ODOMETER ROLLBACK 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1B3HD46T4SFXXXXXX 

Yr/Mfg: 1995 Dodge 

Model: Intrepid 

Body: 4D Sedan Large car 

Engine: 3.3L V6 SMPI OHV 12V 

Fuel: Gasoline 

Driveline: Front-wheel Drive 

Aspiration: Normal 

Country Mfg. United States 

DATE ODOMETER INFORMATION GENERAL 

REPORTED READING SOURCE COMMENTS 

12/09/1994 6 Ohio Title issued 

Motor Vehicle Dept. 

XXXXXXXXXX, OH 

Title #XXXXXXXXXX 

03/25/1997 Auto Auction Vehicle Sold 

Central Region 

03/27/1997 25,961 Ohio Title issued 

Motor Vehicle Dept. 

XXXXX, OH 

Title #XXXXXXXXXX 

04/14/1997 Ohio Title issued 

Motor Vehicle Dept. First lien reported 

XXXXX, OH 

Title #XXXXXXXXXX 

05/02/1997 28,000 Ohio Passed emissions inspection 

Inspection Station 

12/19/1998 56,000 Ohio Passed emissions inspection 

Inspection Station 

12/08/1999 26,111 Ohio Title issued 

Motor Vehicle Dept. First lien reported 

XXXXX, OH POTENTIAL ODOMETER 

Title #XXXXXXXXXX ROLLBACK 

17 
LIKELIHOOD OF ROLLBACK DURING THE FIRST 11 YEARS OF A VEHICLE=S LIFE 

The Carfax data indicate 68 cases of likely or possible odometer rollback in a sample of 10,000 

vehicles. At first glance, it is a rate of 0.68 percent per vehicle. But that grossly understates the 

probability of an odometer rollback over the life of a vehicle. Many of the vehicles in the 

sample are so young that they have not yet experienced the prime years of odometer rollback 

(vehicles less than two years old rarely have their odometer rolled back.) Others are so old that 

Carfax was not fully operational during their early years, and their rollbacks are unreported in 

Carfax. The estimation procedure described here will adjust for both of those factors and obtain 

the rate that would be seen if vehicles were tracked by Carfax over their lifetimes. This report=s 

objective is to estimate the probability of an odometer rollback during the first 11 years of a 

vehicle=s life. Whereas odometers could also be rolled back even in vehicles that are more than 

twelve years old, those rollbacks can be safely disregarded in our study because they have little 

impact on consumers= pocketbooks: the vehicles have greatly depreciated; their net value is low, 

and so is any proportional increase or decrease for low or high mileage. Moreover, the value of 

old vehicles is influenced more by their appearance or condition than by their mileage, so the 

cost effect of high or low mileage is low even in relative terms. 

Table 2-2 shows the 68 cases of odometer fraud by vehicle model year and calendar year. 

Carfax was not complete before 1992. The shaded section of Table 2-2 shows not one case of 

odometer fraud in our sample during calendar years 1989-1991. The rate of fraud is 

underestimated for model year 1989-1991 vehicles during the first years of their lives because 

these data are not in Carfax. 

At this point, a much simpler way to proceed would be to use only the 13 fraud cases in the 

“2000” column of Table 2-2 and just discard the other cases. During calendar year 2000, there 

were 13 cases of fraud in a nationally representative sample of 10,000 vehicles up to 11 years 

old. In other words, the fraud rate is 13/10,000 = .13 percent per vehicle year. This 

straightforward computation would have been the method of choice if, say, 100,000 or more 

VINs had been run through Carfax. With our limited data, we are obligated to develop a 

procedure that makes use of all 68 fraud cases, even if it is more cumbersome. This procedure 

will now be described. 

18 
TABLE 2-2 

Odometer Fraud by Vehicle Model Year and Calendar Year of the Fraud 

Model Calendar Year of Rollback

Year 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 Total 

2001 0 

2000 0 0 

1999 0 1 0 1 

1998 0 0 0 0 0 

1997 0 1 0 0 0 1 

1996 0 0 1 0 0 0 1 

1995 2 10 

1994 1 7 

1993 4 8 

1992 3 0 0 10 

1991 0 0 0 0 8 

1990 3 0 0 0 0 8 

1989 0 0 0 0 0 14 

Total 13 13 17 10 68 

3 2 0 2 1 0

0 4 1 1 0 0 0

0 1 1 0 2 0 0 0

1 0 4 1 1 0 0

2 3 2 0 0 1 0

2 1 0 0 0 2 0

3 5 2 1 1 0 2

5 5 3 2 0 0 0 0

Although Carfax is a comprehensive vehicle history database, Carfax does not necessarily 

identify all forms of odometer rollback. An odometer may be rolled back and not identified as 

such in Carfax as long as subsequent mileage is not lower than the previously mileage. This 

could happen in several ways. 

For example, an individual who owns a vehicle for several years and accumulates more miles 

than normal may personally roll back the odometer to a reasonable level before selling it. The 

rolled back odometer is recorded on the title and there is no record of the higher mileage. A 

second way this might happen is the owner of a car with high mileage may not record the 

mileage on the title when he or she sells the car. The buyer rolls back the odometer and fills in 

the lower mileage on the title. The buyer then sells the car again to make a profit. The higher 

mileage is never recorded on the title and there is no record of it in Carfax. A third way is that 

the seller fills in the correct mileage but the buyer alters the title to show a different mileage. A 

fourth way is roll back the odometer to a level above the mileage in the vehicle’s previous title 

history (if the mileage is known). We will estimate the incidence rate of such practices and 

inflate the 68 fraud cases found in Carfax by using vehicles that had their odometers rolled back. 

NHTSA’s Odometer Fraud Office provided a file that contained vehicles that had their 

odometers’ rolled back. These vehicles were investigated by the Odometer Fraud Staff (OFS) 

and were proven to have had their odometers’ rolled back. The file contained 8,176 passenger 

cars, pickup trucks, vans, and Sport Utility Vehicles (SUVs). Besides the Vehicle Identification 

19 
Number (VIN) which can uniquely identify the vehicle, the file contained the odometer reading, 

the date, and the price that was paid for the vehicle before the odometer was rolled back; and the 

odometer reading, the date, and the price that was paid for the vehicle after the odometer was 

rolled back. 

Only a sample of these known rollback cases were sent to Carfax. The sample included all 

vehicles with a good VIN and model year 1993 or newer; all vehicles with a good VIN, model 

year 1989-1992, and the price before and the price after the odometer was rolled back; and a 

random sample of vehicles with good VIN and model year 1989-1992 without price data. All 

vehicles with good VIN and model year 1993 and newer were kept because Carfax is complete 

back to 1992 and it should have the full history for these vehicles. Carfax may not have full 

vehicle histories for model year 1989-1992 vehicles. But all older vehicles (model year 1989-

1992) with good VINs and price information were kept because the price data will be used later 

to estimate the cost of odometer fraud. Of the remaining older vehicles the sample was drawn to 

equal number of vehicles by model year. There were 6,846 cases in the known rollback sample. 

NHTSA submitted the VINs for these cases along with the VINs from the Polk random sample 

to Carfax1

. Ninety-eight percent of the known rollback vehicles (6,692/6,846) were found in 

Carfax. Carfax did not have records for only 154 of them. Table 2-3 shows the known rollback 

vehicles by model year and calendar year of rollback. This table includes vehicles not found in 

Carfax. The calendar year of the rollback in Table 2-3 is based on the data in the OFS file. The 

calendar year of rollback is the year in the date after the odometer was rolled back when the date 

is known (82.5 percent of the cases). When the date after the rollback is unknown, the calendar 

year is based on the date before the rollback. This is a good estimate for the calendar year of the 

rollback because the time difference between the dates is within 3 months in 96 percent of the 

cases when the date before and the date after the odometer was rolled back are both known. In 

the remaining cases, none of the dates are more than 11 months apart. 

NHTSA’s Odometer Fraud Staff (OFS) gave us the known rollback file in January 2001. It did 

not have any rollbacks occurring in 2001 and very few occurring in 2000 because investigations 

take a long time to complete. The OFS investigate mainly fleet vehicles because they are likely 

candidates for odometer fraud. They usually accumulate high mileage in the first four or five 

years and are sold before the vehicle requires extensive maintenance. Therefore, some cells in 

the table have a small number of known rollbacks. The highlighted cells in the table have cell 

totals less than 30. 

1

Only 6,384 known rollback VINs were submitted to Carfax with the 10,000 random 

Polk VINs. These were run through Carfax on March 13, 2001. The 462 remaining known 

rollback VINs were submitted to Carfax later and were run on April 19, 2001 because they were 

inadvertently left out of the first batch. 

20 
21 

TABLE 2-3 

Known Rollback Vehicles 

by Model Year and Calendar Year of Rollback 

Model Calendar Year of Rollback 

Year 2000 1999 1997 1996 1995 1991 1990 1989 Total 

1998 13 46 1 0 60

1997 20 277 0 0 405 

1996 3 136 11 1 0 611 

1995 1 57 113 37 1 0 640 

1994 0 18 182 210 0 0 536 

1993 0 1 93 146 285 3 1 667 

1992 0 4 49 39 63 7 0 939 

1991 0 2 10 48 54 64 1 0 992 

1990 0 0 11 43 65 79 62 13 0 960 

1989 0 0 3 15 44 236 199 279 121 2 1,036 

Total 37 541 1348 620 1147 342 134 2 6,846 

Of the 6,692 vehicles found in Carfax, 2,780 were flagged in Carfax as having a potential 

odometer rollback. odel year and calendar 

year of the rollback that were found in Carfax and flagged as potential odometer rollback in 

Carfax. 

TABLE 2-4 

Known Rollback Vehicles Flagged as Rollbacks in Carfax 

by Model Year and Calendar Year of Rollback 

Model Calendar Year of Rollback 

Year 2000 Total 

1998 2 18 1 0 21 

1997 5 99 34 0 0 138 

1996 1 34 116 2 0 0 153 

1995 0 16 92 21 17 0 0 146 

1994 0 127 0 0 233 

1993 0 0 145 1 1 323 

1992 0 1 125 164 0 0 403 

1991 0 1 143 188 0 0 489 

1990 0 0 5 194 0 0 447 

1989 0 0 0 138 0 427 

Total 8 79 26 0 2,780 

1998 1994 1993 1992 

108 

460 

431 

65 61 

58 80 

223 389 165 

147 274 392 

170 351 166 

52 85 

392 848 998 437 

Table 2-4 shows the known rollback vehicles by m

1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 

11 34 28 33 

27 18 94 37 

20 12 26 55 

10 23 30 77 17 

19 35 34 97 52 11 

10 26 30 48 81 68 26 

180 339 133 355 444 489 576 151 
We compared the first 100 cases of the known rollback file that Carfax flagged as potential 

odometer rollback to see if the Carfax identified rollback was the same rollback found by 

NHTSA’s OFS. Twenty cases had an exact match. The date and mileage in Carfax before the 

odometer was rolled back and the date and mileage in Carfax after the odometer was rolled back 

exactly match the dates and mileages found by the Odometer Fraud Staff. In seventy-two cases, 

the rollbacks identified in Carfax appear to be the same as the rollbacks identified by OFS, but 

not all dates and mileages matched exactly. For example, the OFS found a vehicle to have 

92,726 miles on August 14, 1991 and 30,428 miles on September 9, 1991. For the same vehicle, 

Carfax had 92,726 miles on August 14, 1991, 29,840 miles on August 16, 1991 (this transaction 

is flagged as potential odometer rollback), and 30,428 on September 4, 1991. In this example, 

the date and mileage after the rollback did not match because Carfax had a subsequent date and 

mileage after the rollback but prior to the one found by the OFS. 

In some of these cases, the Carfax dates and mileages are not as close to the OFS ones, but they 

appear to be identifying the same odometer rollback. For example, the OFS found 76,330 miles 

on May 18, 1992 and 46,431 miles on May 26, 1992. Carfax had 64,800 miles on November 21, 

1990 and 46,854 miles on September 3, 1992. Based on the four dates, the mileage sequence 

appears logical with the rollback occurring sometime between May 18 and May 26. 

There were 8 cases where the rollback flagged in Carfax was different than the rollback found by 

the OFS. The two dates flagged in Carfax were after the dates found by the OFS. Carfax 

appears to identify a second rollback in these cases. In 4 of the 8 cases, the vehicle history in 

Carfax also has a record of the rollback found by the OFS, but only the most recent odometer 

rollback is flagged in Carfax. In the other 4 cases, the vehicle history has no record of the 

rollback found by the OFS. 

Table 2-5 shows the percent of missing rollbacks in Carfax by model year and calendar year of 

rollback based on the data in Table 2-3 and 2-4. The values in this table are essentially inflation 

factors that can be used to inflate the 68 fraud cases in Carfax. But the percent missing in some 

of the essential cells (cells where the 68 fraud cases are located) could not be computed because 

of division by zero (designated by ?). 

The next step is to find a model that best fits our data and use that model to estimate the percent 

missing in the “?”. The percent missing tends to decrease as the vehicle ages. (The percent 

missing decreases as you look down a column.) Or in other words, the percent of rollback found 

in Carfax is increasing as the vehicles get older. Consider the data in calendar year 1993 

column, one and two year old vehicles have 67 percent missing, three year olds have 52 percent, 

four year olds 45 percent, and five year old vehicles have only 41 percent missing. 

One would expect the percentage of missing rollbacks for two-year-old vehicles to be constant or 

decreasing by calendar year (i.e. the percent missing along the diagonal.) But there doesn’t 

appear to be any pattern across calendar year. If anything the newer calendar years have higher 

percentage of missing rollbacks than older calendar years. The decline of known rollbacks 

22 
found in Carfax in recent years may be attributed to shift in the type of rollbacks such as: 

alteration of the mileage written on the title, or a more cautious rollback to a level above the 

mileage recorded in the previous title. Thus, Carfax will not identify this vehicle as a potential 

odometer rollback even after it is sold. 

TABLE 2-5 

Percent of Missing Rollbacks in Carfax by Model Year and Calendar Year of Rollback 

Model Calendar Year of Rollback

Year 2000 

1998 60.9% 0.0% ? 

1997 75.0% ? ? 

1996 66.7% 100.0% ? 

1995 100.0% 100.0% ? 

1994 ? 38.9% ? ? 

1993 ? 100.0% 0.0% 

1992 ? 75.0% 100.0% 

1991 ? 50.0% 0.0% 

1990 ? ? 54.5% 

1989 ? ? 100.0% 

1999 1998 1997 1996 1995 1994 1993 1992

84.6% 

64.3% 68.5%

75.0% 74.8% 81.8%

71.9% 78.7% 81.4% 54.1%

81.3% 56.9% 39.5% 45.9%

71.0% 69.0% 35.6% 49.1% 53.8% 66.7%

59.2% 69.2% 58.7% 43.9% 57.8% 66.7%

52.1% 44.4% 47.6% 47.8% 52.0% 73.4%

55.8% 46.2% 57.0% 42.9% 44.7% 68.7%

33.3% 40.9% 42.3% 43.5% 41.5% 59.3%

We estimated the percent missing using the logistic regression model in the SAS procedure 

PROC LOGISTIC2

. The independent variables are vehicle age and calendar year at the time of 

the rollback. Vehicle age at the time of rollback is a linear variable because the percent missing 

tends to decrease as the vehicle ages. The calendar year of the rollback is a non-linear 

(categorical) variable because there did not appear to be a linear pattern across calendar year. 

The estimated values are in Table 2-6. 

Table 2-7 shows the inflated rollback cases by model year and calendar year of rollback. The 

inflation factor is 1/ (1 – the percent missing). For example, the inflation factor for model year 

1999 vehicles rolled back in 1999 is 1/(1-.800) = 5.00. There was 1 model year 1999 vehicle 

rollback in 1999 in Carfax. So there were 1 * 5.00 = 5.00 model year 1999 vehicles rolled back 

in 1999. Therefore, the 68 fraud cases found in Carfax based on the Polk sample inflate to 

170.53 cases. 

2 SAS/STAT User’s Guide: Volume 2, GLM-VARCOMP, Version 6, Fourth Edition, SAS 

Institute Inc., Cary, NC 1990. 

23 
TABLE 2-6 

Estimated Percent of Missing Rollbacks in Carfax by 

Model Year and Calendar Year of Rollback 

Model Calendar Year of Rollback

Year 2000 

2001 82.2% 

2000 80.0% 82.2% 

1999 77.6% 80.0% 82.2% 

1998 75.1% 

1997 72.3% 

1996 69.4% 

1995 66.3% 

1994 63.0% 

1993 59.7% 

1992 56.2% 

1991 52.7% 

1990 49.1% 

1989 45.6% 

1999 1998 1997 1996 1995 1994 1993 1992

77.6% 80.0% 80.0%

75.1% 77.6% 77.7% 58.2%

72.3% 75.1% 75.1% 54.7% 63.1%

69.4% 72.3% 72.4% 51.1% 59.7% 63.1%

66.3% 69.4% 69.4% 47.6% 56.2% 59.7% 70.2%

63.0% 66.3% 66.3% 44.1% 52.7% 56.2% 67.2% 70.2%

59.7% 63.0% 63.1% 40.6% 49.1% 52.7% 63.9% 67.2%

56.2% 59.7% 59.7% 37.2% 45.6% 49.1% 60.6% 63.9%

52.7% 56.2% 56.3% 33.9% 42.1% 45.6% 57.2% 60.6%

49.1% 52.7% 52.7% 30.8% 38.7% 42.1% 53.7% 57.2%

24 
 
TABLE 2-7 

Inflated Rollbacks by Model Year and Calendar Year of Rollback 

Model Calendar Year of Rollback

Year 2000 Total 

2001 0.00 0.00 

2000 0.00 0.00 0.00 

1999 0.00 5.00 0.00 5.00 

1998 0.00 0.00 0.00 0.00 0.00 

1997 0.00 0.00 4.01 

1996 0.00 0.00 4.01 

1995 5.93 2.48 29.53 

1994 2.71 13.07 0.00 20.95 

1993 9.92 0.00 20.08 

1992 6.85 10.84 0.00 23.82 

1991 0.00 18.94 

1990 5.90 16.08 

1989 0.00 10.57 28.09 

Total 31.31 9.13 5.64 4.32 0.00 170.53 

1999 1998 1997 1996 1995 1994 1993 1992

4.01 0.00 0.00 

0.00 4.01 0.00 0.00 

9.80 7.23 0.00 4.09 0.00 

0.00 3.27 1.91 0.00 0.00 

0.00 2.97 2.97 0.00 4.23 0.00 0.00 

2.48 0.00 1.68 1.97 0.00 0.00

4.57 7.44 4.96 0.00 0.00 1.97 0.00 0.00

4.23 2.28 0.00 0.00 0.00 3.68 0.00 0.00

5.90 4.23 1.45 1.63 0.00 4.32 0.00

35.99 47.57 26.27 10.31 

Next, we need a table of denominators corresponding to the fraud incidence counts in Table 2-7: 

the vehicle years of exposure of the 10,000 vehicles in the sample, by model year and calendar 

year. 

Table 2-8 shows the distribution of vehicles in the sample by model year. Of these vehicles, we 

need to estimate how many were registered in the preceding years (1992-1999). In general, one 

year old and older vehicles registered in the current year are also registered in the previous year. 

Minus one year old vehicles registered in the current year are not registered in the previous year 

because they are introduced in the fall of current year. But that is not true for zero year old 

vehicles. For example, one would expect a 1998 model year vehicle registered in 2000 would 

also be registered in 1999. A 2001 model year vehicle registered in 2000 can not be registered in 

1999, because it was not for sale until fall of 2000. Only some model year 2000 vehicles 

registered in 2000 are also registered in 1999, because 2000 model year vehicles are not 

available for sale until fall of 1999. Thus, the same number of model year 1989-1999 vehicles 

registered in 2000 are also registered in 1999 and none of model year 2001 vehicles are 

registered in 2000. 

25 
TABLE 2-8 

Vehicles in the Sample by Model Year 

Model Year Number Percent 

2001 1.83% 

2000 7.70% 

1999 8.27% 

1998 7.85% 

1997 7.26% 

1996 7.27% 

1995 8.11% 

1994 9.46% 

1993 8.97% 

1992 7.69% 

1991 8.09% 

1990 8.39% 

1989 9.11% 

Total 100.00% 

183 

770 

827 

785 

726 

727 

811 

946 

897 

769 

809 

839 

911 

10,000 

The next step is to estimate the percentage of the zero year old vehicles registered in the current 

year that are also registered in the previous year. From Table 2-8, there are 770 model year 2000 

registered in 2000 (zero year old vehicles) and 183 model year 2001 vehicles registered in 2000. 

So there are 183 / 770 = 23.8 percent model year 2000 vehicles registered in 2000. 

Table 2-9 shows the registered vehicle years in the sample by model year and calendar year. The 

data in Column 2 are copied directly from Table 2-8. The data in Column 3 are estimated from 

Column 2, the data in Column 4 are estimated from Column 3, and so on through Column 10. 

For example, the Column 3 data for model years 1989-1999 is copied directly from Column 2 (1 

year old vehicles and older in Column 3). The 1999 data for model year 2000 (-1 year old 

vehicles) are estimated from the model year 1999 in 1999 data using the factor developed above. 

There are 827 * 23.8% = 197 model year 2000 vehicles registered in 1999. Next, the Column 4 

model year 1998-1989 values are copied from Column 3 and model year 1999 are estimated 

from model year 1998. This process is repeated through Column 10. Exposure data for 

calendars years 1991 and earlier are omitted since Carfax has no fraud data for those years. 

26 
TABLE 2-9 

Vehicle Years in the Sample by Model Year and Calendar Year 

Model Calendar Year

Year 2000 

2001 183 

2000 770 197 

1999 827 827 187 

1998 785 785 785 173 

1997 726 726 726 726 173 

1996 727 193 

1995 811 225 

1994 946 213 

1993 897 183 

1992 769 

1991 809 

1990 839 

1989 911 

Total 10,000 9,244 

1999 1998 1997 1996 1995 1994 1993 1992

727 727 727 727

811 811 811 811 811

946 946 946 946 946 946

897 897 897 897 897 897 897

769 769 769 769 769 769 769 769

809 809 809 809 809 809 809 809

839 839 839 839 839 839 839 839

911 911 911 911 911 911 911 911

8,407 7,608 6,882 6,175 5,396 4,438 3,511

27 
 
The rate of odometer fraud for vehicles of a specific age is calculated from the various diagonals 

in Table 2-7 and Table 2-9. For example, the values in the highlighted diagonal line in Table 

2-7 are added together to get the number of odometer fraud cases that occur when the vehicle is 

zero years old. The values in the highlighted diagonal line in Table 2-9 are added together to get 

the number of vehicle years that are zero years old. The values for each specific age from the 

diagonals lines are compared in Table 2-10. Column 2 in the table is the sum of the values along 

the diagonal lines in Table 2-7 for vehicles -1-11 years old. Column 3 is the sum of the values 

along the diagonal lines in Table 2-9 for vehicles -1-11 years old. The rate of odometer fraud for 

zero year old vehicles is 7.48 / 7,258 = 0.10 percent. 

Intuitively, one expects the rate of odometer fraud by vehicle age to be low initially, rise and 

peak, for 3-6 year old vehicles then decline and drop to zero for older vehicles. The observed 

rate by vehicle age follows this pattern expect for older vehicles (7-10 year old). It appears that 

fraud rate in older vehicles does not decline as we expected but remains constant until the value 

of a vehicle is not dependent on the mileage. The mileage for the older vehicles has less of an 

effect on the value of these vehicles than the mileage on newer vehicles (Chapter 3). As a result, 

these incidents in the 7-10 year old vehicles, even if they are actually fraud, will contribute 

negligibly to overall consumer loss. 

TABLE 2-10 

Rate of Odometer Fraud by Vehicle Age 

Vehicle Age Inflated 

Rollbacks 

Vehicle 

Years Rate 

-1 1725 0.00% 

0 7258 0.10% 

1 7297 0.06% 

2 7309 0.19% 

3 7435 0.19% 

4 6709 0.53% 

5 5982 0.33% 

6 5171 0.18% 

7 4225 0.50% 

8 3328 0.54% 

9 2559 0.58% 

10 1750 0.67% 

11 911 0.00% 

0.00 

7.48 

4.09 

14.16 

14.43 

35.51 

19.74 

9.30 

21.28 

17.93 

14.79 

11.80 

0.00 

The rate of odometer fraud over the first 11 years of a vehicle’s life is estimated in Table 2-11. 

The fraud rates, by vehicle age, from Table 2-10 are multiplied by the percentage of vehicles that 

28 
survive to reach that age. These products are summed up for ages –1 to 11. A vehicles has 3.47 

percent chance of having its odometer rolled back sometime within its first 11 years. 

The number of odometer frauds in the United States during calendar year 2000 is estimated in 

Table 2-12. The fraud rates, by vehicle age, from Table 2-10 are multiplied by the number of 

registered vehicles (as of 7/1/2000) in each age group. These products add up to 452,000 

rollbacks. 

With only 68 fraud cases in the sample, it is impossible to determine whether the fraud rate 

changed from 1992 to 2000. It might be desirable to run another sample of vehicles through 

Carfax in about 2003 or so. This would allow a comparison of the 1992-2000 fraud rates with 

the later fraud rates. It is also impossible to determine the fraud rate separately in passenger cars 

and pickups, vans and SUVs. 

29 
TABLE 2-11 

Rate of Odometer Fraud Over the First 11 Years of a Vehicle’s Life 

Vehicle Age Odometer Rollback Rate Survival Factor Rate * Survival 

-1 1.00 0.00% 

0 1.00 0.10% 

1 1.00 0.06% 

2 0.99 0.19% 

3 0.98 0.19% 

4 0.95 0.50% 

5 0.93 0.31% 

6 0.91 0.16% 

7 0.90 0.45% 

8 0.88 0.47% 

9 0.85 0.49% 

10 0.80 0.54% 

11 0.75 0.00% 

Rate Over the First 11 Years of a Vehicle’s Life 3.47% 

TABLE 2-12 

Estimated of Odometer Rollbacks in Calendar Year 2000 

Model Year Odometer Rollback 

Rate 

Vehicles Registered 

as of 7/1/2000 

Number of 

Rollbacks 

2001 299,992 0 

2000 12,324,551 12,709 

1999 15,366,755 8,619 

1998 13,903,267 26,938 

1997 13,857,576 26,896 

1996 12,383,809 65,555 

1995 14,072,643 46,427 

1994 12,529,605 22,537 

1993 11,726,378 59,073 

1992 10,362,227 55,836 

1991 10,310,481 59,608 

1990 10,073,363 67,897 

1989 10,730,981 0 

Rollbacks in Calendar Year 2000 452,095 

0.00% 

0.10% 

0.06% 

0.19% 

0.19% 

0.53% 

0.33% 

0.18% 

0.50% 

0.54% 

0.58% 

0.67% 

0.00% 

0.00% 

0.10% 

0.06% 

0.19% 

0.19% 

0.53% 

0.33% 

0.18% 

0.50% 

0.54% 

0.58% 

0.67% 

0.00% 

30 
 
CONFIDENCE BOUNDS 

A jackknife procedure is used to obtain confidence intervals for the rate of odometer fraud over 

the life of the vehicle. This section describes this procedure step-by-step. This relatively 

complicated procedure was used because simpler formulas based on p * q / n will not work -- the 

rate of odometer fraud over the life of the vehicle is not a simple rate. 

Even so, a still relatively simple procedure might have estimated the variance as follows: take all 

the vehicles in the order they were inputted to Carfax, number them sequentially to create a case 

number (CASE), split the cases into 10 groups according to the last digit of the case number 

(CASE), and estimate the rate of odometer fraud within each of the 10 subsamples using the 

method developed in the preceding section. This gives 10 independent estimates of rate, ε 1 , ε 2 , 

. . . , ε 10 , each based on a tenth of the cases. Let 

10 10 

∑ε i ∑(ε − εi )

2 

ε = 1 s 

2 = 1 

10 9 

Then s2

 is an estimate of the variance of rate based on a tenth of the cases. The variance of the 

rate using all of the cases is s2 / 10. 

Unfortunately, this approach is not advisable. It requires estimating the rate separately for each 

tenth of the cases. A tenth of the cases is so sparse a sample that it might contain only a few 

cases of odometer fraud, making it impossible to calculate a meaningful rate over the life of the 

vehicle using the multi-celled method developed in the preceding section. 

The jackknife procedure circumvents that problem. Instead of the rate being calculated for one 

tenth of the cases, it is computed for the nine tenths of the cases that remain after removing a 

tenth of the file. Nine tenths of the data contain enough cases with odometer rollback to 

calculate the rate using the method of the preceding section. Let ε (1) , ε (2) , . . . , ε (10) be the 

estimates of the rate, each based on 9/10ths of the cases i.e., all of the cases except the 1st, 2nd, . . 

., 10th subsample, respectively i.e. using the fraud cases in that 9/10ths of the sample, inflating 

the cases based on the missing in a 9/10 sample of known rollbacks, and dividing by 9/10 of 

vehicle years in Table 2-9. Let ε = 3.47 % be the rate estimated based on all case (i.e., rates of 

odometer fraud over the life of the vehicle). Let 

ε *i = 10ε − 9ε ( )i 

Then ε *i is a surrogate for ε i , the rate within the removed tenth of cases: ε *i is called a pseudo 

estimate of ε i . 

31 
10 10 

∑ε *i ∑(ε *i −ε * )

2 

Let ε * = 1 s 

2 = 1 

10 9 

Then s2 / 10 is an approximation to the variance of the rate using all of the cases. It is called a 

jackknife estimate of variance. The standard deviation of the rate is s / 10 . 

The rates were obtained as follows: The 10,000 cases in the Polk sample were numbered 

consecutively in the order they were submitted to Carfax. The cases whose identification 

number (CASE) ends with the digit I were removed, where I is an integer between 0 and 9. The 

odometer fraud cases in the each subsample were identified. The 6,846 cases in the known 

rollback sample were numbered consecutively in the order they were submitted to Carfax. The 

cases whose identification number (CASE) ends with the digit I were removed, where I is an 

integer between 0 and 9. The inflation factors were calculated in each subsample similar to the 

method used in the full sample. The rate of odometer fraud over the life of the vehicle was 

calculated in each subsample similar to the method used in the full sample. The 2nd column of 

Table 2-13 shows the subsample rates. 

TABLE 2-13 

Estimates and Pseudo Estimates of the Odometer Fraud Rate over the 

Life of the Vehicle for Jackknife Procedure 

in which Tenths of Cases are Removed 

Estimates Estimates 

Cases Except 

Those with Case # 

Rate of Odometer 

Fraud 

Cases with Case # 

Ending in 

Rate of Odometer 

Fraud 

1 3.35% 1 4.57% 

2 3.68% 2 1.60% 

3 3.36% 3 4.47% 

4 3.55% 4 2.75% 

5 3.54% 5 2.84% 

6 3.66% 6 1.75% 

7 3.38% 7 4.28% 

8 3.30% 8 4.97% 

9 3.27% 9 5.23% 

0 3.60% 0 2.33% 

All Cases 3.47% 

Pseudo 

32 
The next task is to obtain the pseudo estimates ε *i by subtracting the respective rates for 9/10 of 

the sample from the estimates from the full sample using the equation below. These pseudo 

estimates are surrogates for the results that would have been obtained if only the removed tenth 

of the sample had been used for the calculations. 

ε *i =10ε − 9ε ( ) =10(3.47%) − 9ε i ( )i
 

The 10 values of ε i are shown in the 4th column of Table 2-13. These values are used to 

calculate: 

1 2
 

10  10
 

∑ε *i  ∑ (ε *i −ε *)

2 

 s  1  ε * = 1 10 = 0.434%

10 = 3.478% = 10 9  

 



The standard deviation, s / 10 , is T distributed with 9 degrees of freedom. Therefore, 90 
 

percent confidence bounds around the rate of odometer fraud (i.e. with α = .05 on each side) are 
 

3.47% ± (0.434% * 1.833). Table 2-14 shows the estimate and the confidence bounds. 
 

TABLE 2-14 

The Rate of Odometer Fraud over the Life of the Vehicle and the Confidence Bounds 

Lower Bound Estimate Upper Bound 

Rate of Odometer Fraud 2.68% 3.47% 4.26% 

33 
 
34 
 
CHAPTER 3 

THE INCREASED PRICE CONSUMERS PAY FOR PASSENGER VEHICLES DUE TO 

ODOMETER ROLLBACK 

This chapter will estimate the additional cost consumers pay to purchase vehicles with rolled 

back odometers. Buyers of vehicles with spun odometers will, on the average, pay more for the 

vehicles than they are actually worth, since the value of a vehicle is to a substantial extent based 

on the total miles a vehicle has been driven. Other monetary costs of odometer fraud are not 

estimated in this report. They include inflated financing, insurance, and tax costs; additional 

amounts consumers pay for vehicle repairs; other consequential damages; the decreased resale 

value due to the vehicle having an altered odometer; the funding of Federal and state regulatory, 

investigative, and other efforts to detect and deter tampering; dealer (seller) "buyback" costs and 

restitution fees which may be imposed as a result of detected and successfully prosecuted cases 

of odometer tampering. For example, NHTSA provides $150,000 annually to states to promote 

and assist their odometer fraud enforcement efforts. We do not know the costs incurred by states 

to fund their odometer fraud enforcement efforts. Legal and court costs may also be involved. 

These costs ultimately become taxes which are passed on to the consumer. Also not estimated 

are “intangible” costs such as the lost time and frustration of repairing a vehicle that’s much 

more worn-out than its buyer had anticipated, and the psychological pain consumers must feel 

when they realize they have been cheated. 

In this analysis, a vehicle=s value is initially determined based on its mileage using the N.A.D.A. 

Official Used Car Guide and Official Older Used Car Guide. A vehicle with high mileage, 

mileage higher than average, is less valuable than the vehicle with average or low mileage. The 

difference in price is calculated for vehicles with “likely” and “possible” odometer rollback to 

estimate (with adjustments) the national cost of odometer rollback at the time of purchase. This 

analysis estimates that odometer fraud annually costs consumers at the time of purchase $1,056 

million for passenger cars, pickup trucks, vans and sport utility vehicles (confidence bounds 

from $737 million to $1,376 million). 

N.A.D.A. OFFICIAL USED CAR GUIDE 

The N.A.D.A. Official Used Car Guide1

 is published monthly in nine regional editions, and 

includes trade-in, loan, and retail values for vehicles up to seven years old. The N.A.D.A. 

Official Older Used Car Guide2 is published three times a year. It also includes trade-in, loan, 

1

This book is published by N.A.D.A. Official Used Car Guide Company. N.A.D.A. 

Official Used Car Guide Company is a unit of NADA Services Corporation (NADASC), a 

for-profit subsidiary of National Automobile Dealers Association (NADA). 

2

This book is published by N.A.D.A. Appraisal Guides Company. 

35 
and retail values, but for twelve years or older model year vehicles. All values contained in 

these Guides are developed by N.A.D.A.=s editors, based upon many sources of information 

including actual transactions occurring throughout the country. 

N.A.D.A. estimates the Acceptable Mileage Range, the amount of mileage a vehicle is expected 

to accumulate through normal use. N.A.D.A. bases its mileage ranges on averages derived from 

information received from the automotive marketplace. If mileage falls outside of the average 

range, then a deduction or addition should be made to the value of the vehicle. 

The effect of high or low mileage will vary according to the class (size) and value of the vehicle. 

High or low mileage on an inexpensive compact vehicle will have less absolute impact than it 

will on a larger or luxury vehicle. In general, since the value of a vehicle depreciates as it ages, 

so will the effect of high or low mileage. The N.A.D.A. books contain high mileage tables 

which show the values that should be deducted from the base value of the vehicle by mileage, 

class, and model year. The low mileage tables show the values that should be added to the base 

value of the vehicle. By comparing the values from these tables, we estimate the difference in 

price for vehicles in our sample that the panel classified as likely or possible odometer fraud. 

The analysis derived cost estimates from the Eastern edition, October 2001 version of the 

N.A.D.A. Official Used Car Guide for vehicles aged 7 years old or less and from the National 

edition, September through December 2001 version of the N.A.D.A. Official Older Used Car 

Guide for vehicles more than 7 years old. They were the latest editions available at the time of 

the analysis (December 2001). Use of different editions and/or versions might have produced 

different estimates. 

The additional costs, calculated in this chapter, that consumers pay at time of purchase for 

vehicles whose odometers have been rolled back are only estimates. They should not be 

considered absolute. It is possible to have either a high mileage vehicle in very good condition 

or a low mileage vehicle in very poor condition. In these cases, the overall condition of the 

vehicle should also be considered when adjusting the vehicle value. But since this analysis did 

not investigate any of the individual vehicles, the overall condition of the vehicle is unknown. 

The estimates of loss are based on book values and are averages for vehicles of this type. In 

none of these cases, do we know the actual prices paid by the people who bought the vehicles. 

36 
METHOD FOR AN INITIAL ESTIMATE 

The method used in this chapter will estimate the value of a vehicle at two different mileages for 

each of the 68 vehicles we believed were rolled back. The value of the vehicle will be estimated 

based on the mileage before the odometer was rolled back and the mileage after the odometer 

was rolled back. The vehicle=s value is determined at the two different mileages by its age and 

class using the N.A.D.A. books. The consumer cost at the time of purchase will be the 

difference between the two values. 

Let us consider the “classic” case of odometer fraud. Figure 3-1 shows the history of a 1995 

Buick Regal. On May 22, 1996, this vehicle had 42,085 miles but on June 15, 1996 it had only 

12,086 miles. Even though the odometer was rolled back in June 1996, the latest N.A.D.A. 

guidebook was used. The 1995 car was 1996 - 1995 = 1 year old when the fraud occurred in 

1996. A one year old car in 2001 is a 2001 - 1 = 2000 model year car. Therefore, the 1995 

Buick Regal is translated into a 2000 model year car and the value of a 2000 Buick Regal is 

estimated from the October 2001 version of the Car Guide. 

As stated above, all the estimates are based on the October 2001 Official Used Car Guide or the 

September - December 2001 Official Older Used Car Guide. The advantage to using the latest 

guidebooks, besides using only two books for all of the estimates, is that the losses are updated 

to current (2001) prices. Using the latest guidebooks occasionally creates a problem: a model in 

question may translate into a model year when the model was discontinued. When this occurred, 

the model that essentially replaced the discontinued model is used (e.g. Pontiac Sunfire for 

Pontiac Sunbird). 

The N.A.D.A. guidebook classifies Buick Regal as a class II vehicle. Table 3-1 shows excerpts 

from the High Mileage Table and Table 3-2 shows excerpts from the Low Mileage Table in the 

N.A.D.A. Official Used Car Guide. (The Official Used Car Guide is used in this case because the 

vehicle is less than 7 years old.) The shaded areas in Table 3-1 indicate the average mileage 

range. For a 2000 model year car, the average mileage is between 25,001 and 30,000 miles. A 

2000 model year, class II car with 42,085 miles is worth $500 less than the base value of the car 

according to the high mileage table (bolded cell in Table 3-1). This car with 12,086 miles is 

worth $650 more than the base value of the car according to the low mileage table (bolded cell in 

Table 3-2). Therefore, a consumer would pay $500 + $650 = $1,150 more for this vehicle at the 

time of purchase than it was worth. In this “classic” case of odometer fraud, the mileage is 

rolled back 29,999 miles and the car=s value is increased by $1,150. 

37 
---------------------------------------------------------------------------- 

FIGURE 3-1: LIKELY ODOMETER ROLLBACK 
 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 2G4WB52M8S1XXXXXX 
 

Yr/Mfg: 1995 Buick 
 

Model: Regal Custom 
 

Body: 4D Sedan Mid-size car 
 

Engine: 3.1L V6 SFI OHV 12V 
 

Fuel: Gasoline 
 

Driveline: Front-wheel Drive 
 

Aspiration: Normal 
 

Country Mfg. Canada 
 

DATE ODOMETER INFORMATION GENERAL 

REPORTED READING SOURCE COMMENTS 

02/01/1995 Texas Registered as 

Motor Vehicle Dept. rental vehicle 

XXXX XXXXXXXXXX, FL (major car rental company) 

03/30/1995 5 	 Texas Title or registration 

Motor Vehicle Dept. issued 

XXXX XXXXXXXXXX, FL First lien reported 

Title #XXXXXXXXXXXXXXXXX 

05/22/1996 42,085 	 Auto Auction Vehicle Sold 

Mountain Region 

06/15/1996 12,086 	 New Mexico Title or registration 

Motor Vehicle Dept. issued 

XXXXXXXXXXX, NM POTENTIAL ODOMETER 

Title #XXXXXXXXXXXXXXX ROLLBACK 

TABLE 3-1 

Excerpt from the High Mileage Table in the N.A.D.A. Official Used Car Guide, October 2001 

Model Year 

Mileage Class 2001 2000 1999 1998 1997 1996 1995 1994 

I 

II 

III 

25001 

to 

30000 IV 

I 700 375 

II 950 500 

III 1425 750 

40001 

to 

45000 IV 1675 875 

275 

375 

575 

675 

38 
Next, let us consider another “likely” odometer rollback case. In this case, a 1995 Mazda Miata 

had 51,162 miles on March 28, 2000 and 45,000 on March 30, 2000. This is a 5-year-old car 

when the mileage was rolled back (2000 - 1995 = 5 years old), so we need to consider a 1996 

model year car when we use the 2001 guide. N.A.D.A. classifies Mazda Miata as a class II 

vehicle. This car=s initial mileage (51,162) is below the average range. The average mileage for 

a 5-year-old car is 70,001 to 75,000 miles. Based on the N.A.D.A. low mileage table, this 1996 

vehicle with 51,162 miles is worth $650 more than the base value but is worth $975 more than 

the base value with 45,000 miles (Table 3-2). In this case, a consumer would pay $975 - $650 = 

$325 more for this vehicle than it was worth. Here, the mileage goes from a low mileage to a 

very low mileage. For vehicles whose mileage goes from a very high mileage to high mileage, 

the cost would have been estimated by subtracting the high mileage reduction from the very high 

mileage reduction. 

TABLE 3-2 

Excerpt from the Low Mileage Table in the N.A.D.A. Official Used Car Guide, October 2001 

Mileage Class 

Model Year 

2001 2000 1999 1998 1997 1996 1995 1994 

7501 

to 

15000 

I 250 550 875 1150 1400 1650 1775 1850 

II 275 650 1025 1350 1650 1925 2050 2150 

III 350 825 1325 1700 2100 2475 2650 1775 

IV 400 925 1450 1900 2325 2750 2950 3075 

40001 

to 

45000 

I 275 575 825 950 1050 

II 325 675 975 1125 1225 

III 400 825 1250 1450 1575 

IV 450 925 1375 1600 1750 

50001 

to 

50000 

I 275 550 675 775 

II 325 650 800 900 

III 400 825 1025 1175 

IV 450 900 1150 1300 

This method assumes the mileage recorded in the first of the two pertinent transactions was the 

mileage just before the odometer was rolled back, the mileage in the second transaction was the 

mileage just after the odometer was rolled back, and the car=s trade-in value with average 

mileage is the same at these two points in time. If the time difference between the two 

transactions is minimal then these assumptions are valid. In the two examples presented above, 

39 
the time difference is minimal, so the amount of additional mileage, if any, was small, not 

substantially affecting the consumer cost. 

But if the time difference was more than a few months, then these assumptions may not be valid. 

A car could accumulate a substantial amount of miles before and/or after the odometer was 

rolled back. Also a car=s trade-in value could decrease and the average mileage range could 

increase since the vehicle is older. All of these could affect the amount of loss. 

Figure 3-2 shows an example of possible odometer fraud with the two discrepant mileage 

readings occurring more than 3 months apart. On October 23, 1997, this vehicle had 109,569 

miles. On November 25, 1998, it had only 46,605. The time difference between these two dates 

is more than a year. The only way this car could have had 109,569 miles on it just prior to 

rollback and 46,605 just after rollback is if it had just sat still for a year (October 1997 -

November 1998). This is unlikely. 

For these cases, the vehicle=s value should be based on the date when the consumer bought the 

vehicle with rolled back odometer. In general, that will be the later date, because that is 

typically the date when the cheated consumer registers the vehicle. Let us call the dates, Date1 

and Date2, where Date1 is earlier than Date2. The mileage will be Mileage1 and Mileage2, 

where Mileage1 is bigger than Mileage2. The consumer thinks he or she is buying a vehicle 

with Mileage2 on Date2. But the true mileage is sometimes bigger than Mileage1. Let us call it 

Mileage1A. 

In cases where the time difference between the two discrepant mileage readings is more than 3 

months apart, the method will first estimate Mileage1A by 

Mileage1A = Mileage1 + AAM*(Date2-Date1), 

where AAM is Average Annual Miles of travel per year. In other words, Mileage1A is the 

expected mileage this car would have if it had Mileage1 by Date1 and it accumulated average 

mileage between Date1 and Date2. Then the method will estimate the consumer loss based on 

Mileage1A and Mileage2 on Date2 using the N.A.D.A. Used Car Guides. 

The variables have the following values for this case: 

Date1 = October 23, 1997 Date2 = November 25, 1998 

Mileage1 = 109,569 Mileage2 = 46,605 

(Date2 - Date1) = 1.08 years 

40 
---------------------------------------------------------------------------- 

FIGURE 3-2: POSSIBLE ODOMETER ROLLBACK WITH 
 

TWO DISCREPANT MILEAGE READING MORE THAN 3 MONTHS APART 
 

SECTION 1 VEHICLE SPECIFICATIONS 

Vehicle ID: 1FMEU15H4KLXXXXXX 
 

Yr/Mfg: 1989 Ford 
 

Model: Bronco 
 

Body: Utility 
 

DATE ODOMETER INFORMATION GENERAL 
 

REPORTED READING SOURCE COMMENTS 
 

12/13/1989 19,729 	 New Jersey Title issued 

Motor Vehicle Dept. 

XXXXXXX, NJ 

Title 

#XXXXXXXXXXXXXXXXX 

03/26/1994 93,001 New York Title issued 

Motor Vehicle Dept. 

XXXX XXXXXX XXXX, NY 

10/23/1997 109,569 New York Title issued 

Motor Vehicle Dept. 

XXX XXXX XXXX, NY 

03/16/1998 New York Title issued 

Motor Vehicle Dept. 

XXX XXXX XXXX, NY 

11/25/1998 46,605 	 New York Passed emissions inspection 

Inspection Station Passed safety inspection 

XXX XXXX XXXX XXXX POTENTIAL ODOMETER 

ROLLBACK 

12/03/1999 62,187 	 New York Passed emissions inspection 

Inspection Station Passed safety inspection 

XXX XXXX XXXX XXXX 

05/26/2000 136,737 	 New York Title issued 

Motor Vehicle Dept. 

XXXXX XXXXX, NY 

41 
Table 3-3 shows the average annual miles of travel per vehicle by vehicle age3

. This information 

is from the 1995 Nationwide Personal Transportation Survey, a Federal Highway Administration 

effort to collect information on travel in the United States by households. 

TABLE 3-3 

Average Annual Miles per Vehicle 

by Vehicle Age 

Vehicle Age Average Miles per Year 

0 to 2 years 16,092 

3 to 5 years 14,004 

6 to 9 years 12,608 

10 or more years 8,758 

All 12,226 

In October 1997, this 1989 model year vehicle is 1997 - 1989 = 8 years old and in November 

1998, this vehicle is 9 years old. Table 3-3 shows 6 to 9 year old vehicles accumulate an 

additional 12,608 miles per year (AAM = 12,608). Therefore, Mileage1A = 109,569 + (12,608 * 

1.0833) = 123,228 miles. 

N.A.D.A. classifies Ford Bronco as class III vehicle. A 9-year-old SUV (the age of the vehicle 

on Date2) translates into a 1992 model year vehicle in 2001. A 1992 model year, class III 

vehicle with 123,228 miles is worth $1,450 less than the base value of the vehicle according to 

the high mileage table in the September through December 2001 version of the Older Used Car 

Guide. The guide estimates the average mileage is between 90,0001 and 100,000 miles for 1993 

and older model year vehicles. The high mileage table in this guide is similar to the one in the 

Official Used Car Guide. It shows the values that should be deducted from the base value of the 

vehicle by mileage, class, and model year. 

The Low mileage table in the Official Older Used Car Guide is different than the one in the 

Official Used Car Guide. The low mileage table contains percentages that are to be used to 

estimate the added value of the vehicle based on the trade-in value by mileage and model year. 

Vehicle class is not a factor in the low mileage tables. Table 3-4 shows an excerpt from the low 

3

Hu, P. & Young, J., Draft Summary of Travel Trends 1995 Nationwide Personal 

Transportation Survey, January 1999. 

42 
mileage table in the N.A.D.A. Official Older Used Car Guide, September through December 

2001 version. 

A 1992 model year vehicle with 46,605 miles is worth 10 percent more than the trade-in value of 

a similar vehicle with average mileage (Table 3-4). The trade-in value of a 1992 Ford Bronco 

with average mileage is $5,920. (Trade-in values in the N.A.D.A. guide are listed by model 

year, make, model, series, and body style.) This vehicle is worth 0.10 * $5,950 = $595.00 more 

than this vehicle with average mileage. Therefore, a consumer would pay $1,450 + $595.00 = 

$2,045.00 more for this vehicle at the time of purchase than it was worth. 

TABLE 3-4 

Excerpt from the Low Mileage Table in the 

N.A.D.A. Official Older Used Car Guide, 

September through December 2001 Version 

Mileage 

Model Year 

1993 1992 

30001 to 60000 10% 10% 

60001 to 90000 5% 5% 

90001 to 100000 Average Mileage Range 

The NADA guidebooks state the high mileage deduction should not exceed 40 percent of the 

vehicle=s trade-in value. In a few cases, the high mileage deduction exceeded 40 percent of the 

trade-in value. For these cases, 40 percent of the vehicle=s trade-in value replaced the high 

mileage deduction in the calculations. 

RESULTS 

Table 3-5 shows the cost of odometer fraud at the time of purchase and the miles rolled back by 

vehicle age, model year, make, and model for the vehicles in our sample identified as likely or 

possible odometer fraud. This table shows that the odometer is rolled back an average of 42,000 

miles per vehicle, costing an additional $1,300 per vehicle at the time of purchase. Therefore, 

odometer roll back costs at the time of purchase an average of 3 cents for every mile rolled back. 

43 
TABLE 3-5 

Model Year, Make, Model, Additional Cost, and Miles Rolled Back 

by Vehicle Age for Odometer Fraud Cases 

Vehicle 

Age 

Model 

Year Make Additional Cost 

Miles Rolled 

Back 

0 Saab 9-3 S $0.00 3,698 

0 Mazda 626 $0.00 3,897 

1 Buick Regal $1,150.00 29,999 

1 Toyota Tercel $550.00 20,406 

2 Pontiac Grand Prix $1,950.00 53,978 

2 Toyota 4Runner $1,125.00 28,474 

2 Dodge Intrepid $2,400.00 45,433 

2 Mazda 626 $500.00 15,702 

2 Oldsmobile Delta 88 $3,375.00 65,113 

3 Ford Escort $1,025.00 36,279 

3 Chevrolet Sport Van $625.00 13,086 

3 Volvo 850 $1,050.00 22,239 

3 Ford Bronco $4,350.00 82,413 

3 Ford Ranger $1,000.00 27,243 

4 Chevrolet Corsica $650.00 27,303 

4 Ford F150 $350.00 7,800 

4 Mercury Cougar $1,150.00 35,082 

4 Pontiac Bonneville $650.00 17,108 

4 Dodge Intrepid $2,100.00 43,893 

4 Saturn SCI $1,175.00 38,219 

4 Dodge Spirit $1,950.00 65,470 

4 Dodge Intrepid $1,050.00 24,535 

4 Volkswagen Jetta $975.00 30,883 

4 Lincoln Town Car $2,025.00 32,918 

4 Ford Bronco $2,600.00 45,553 

4 Oldsmobile Achieva $1,650.00 43,200 

4 Jeep Wrangle $2,125.00 61,344 

5 Mazda Miata $325.00 6,162 

5 Ford Explorer $2,500.00 99,906 

5 Jeep Cherokee $400.00 7,757 

5 Ford Tempo $1,550.00 55,372 

5 Chevrolet C1500 $2,675.00 45,923 

5 Oldsmobile Cutlass $800.00 20,004 

5 Lexus LS400 $1,825.00 39,133 

Model 

1999 

1995 

1995 

1995 

1993 

1997 

1993 

1996 

1994 

1995 

1992 

1995 

1991 

1994 

1990 

1994 

1994 

1993 

1995 

1994 

1992 

1995 

1989 

1989 

1990 

1995 

1994 

1995 

1992 

1992 

1992 

1993 

1992 

1995 

44 
 
TABLE 3-5 Continued 

Model Year, Make, Model, Additional Cost, and Miles Rolled Back 

by Vehicle Age for Odometer Fraud Cases 

Vehicle 

Age 

Model 

Year Make Additional Cost 

Miles Rolled 

Back 

6 Oldsmobile Calais $650.00 22,203 

6 Jeep Cherokee $875.00 26,109 

6 Plymouth Voyager $1,175.00 37,047 

6 Ford Explorer $1,900.00 57,283 

7 Mazda 929 $1,550.00 24,040 

7 Hyundai Excel $650.00 33,805 

7 GMC Jimmy $500.00 17,292 

7 Chevrolet Lumina $650.00 18,143 

7 Mitsubishi Eclipse $800.00 22,068 

7 Chevrolet Cavalier $1,600.00 55,396 

7 Jaguar XJ6 $1,375.00 27,075 

7 Ford Taurus $2,250.00 69,482 

7 Ford F150 $2,775.00 78,346 

8 Chevrolet Caprice $2,977.50 99,851 

8 Mazda 323 $0.00 26,811 

8 Toyota Celica $2,130.00 113,288 

8 Volvo 240DL $1,383.75 22,918 

8 Isuzu Trooper $285.00 43,557 

8 GMC Safari $1,825.00 101,717 

8 Mazda MX6 $1,052.50 70,672 

8 Ford Mustang $753.75 62,520 

9 Mitsubishi Mirage $58.75 22,686 

9 Oldsmobile Cutlass $0.00 10,378 

9 Dodge Daytona $628.75 33,355 

9 Ford Bronco $2,045.00 76,623 

9 Buick Reatta $1,275.00 20,709 

9 Chevrolet Cavalier $325.00 21,388 

9 GMC V3500 $2,797.50 89,556 

10 Oldsmobile Cutlass $871.25 70,192 

10 Acura Legend $1,375.00 59,609 

10 Buick Regal $450.00 62,524 

10 Ford Festiva $625.00 70,747 

10 Chevrolet C1500 $322.50 33,578 

Model 

1991 

1994 

1989 

1991 

1992 

1991 

1989 

1993 

1991 

1993 

1991 

1993 

1993 

1989 

1989 

1992 

1991 

1991 

1992 

1990 

1992 

1989 

1989 

1990 

1989 

1989 

1989 

1990 

1989 

1989 

1989 

1990 

1990 

45 
 
TABLE 3-5 Continued 

Model Year, Make, Model, Additional Cost, and Miles Rolled Back 

by Vehicle Age for Odometer Fraud Cases 

Vehicle 

Age 

Model 

Year Make Additional Cost 

Miles Rolled 

Back 

10 Ford Ranger $292.50 58,393 

Total $85,848.75 2,854,886 

Average $1,262.48 41,984 

Model

1990 

Table 3-6 shows the average additional cost per vehicle, average number of miles the odometer 

is rolled back per vehicle, the additional cost per mile, the rate, and the cost times rate by vehicle 

age. The information in Table 3-6 is calculated from the data in Table 3-5. The average cost per 

vehicle is slightly less for older vehicles than for newer vehicles. The average number of miles 

rolled back is slightly larger for older vehicles than newer vehicles. These two cause the average 

cost per mile to decrease as vehicles age. The cost per mile is 4 cents per mile for 2 through 5-

year-old vehicles, 2 or 3 cents per mile for 8 and 9-year-old vehicles, and 1 cent per mile for 10-

year-old vehicles. It is appropriate that the cost per mile decreases more or less proportionally 

with the depreciation of the overall value of the vehicle. 

TABLE 3-6 

Average Cost per Vehicle, Average Miles Rolled Back per Vehicle, and 

Cost per Mile, and Rate by Vehicle Age and Cost of the Life of the Vehicle 

Vehicle Age Average 

Cost/Vehicle 

Average Miles Rolled 

Back/ Vehicle Cost/Mile Cost*rate 

-1 0 $0.00 0.00% $0.00 

0 3,798 $0.00 0.10% $0.00 

1 25,203 $0.03 0.06% $0.48 

2 41,740 $0.04 0.19% $3.59 

3 36,252 $0.04 0.19% $3.06 

4 36,408 $0.04 0.50% $7.10 

5 39,180 $0.04 0.31% $4.42 

6 35,661 $0.03 0.16% $1.87 

7 38,405 $0.04 0.45% $6.10 

8 67,667 $0.02 0.47% $6.14 

9 45,782 $0.03 0.49% $5.86 

10 59,174 $0.01 0.54% $3.54 

11 0 $0.00 0.00% $0.00 

Total $42.16 

Rate 

$0.00 

$0.00 

$850.00 

$1,870.00 

$1,610.00 

$1,419.23 

$1,439.29 

$1,150.00 

$1,350.00 

$1,300.94 

$1,188.33 

$656.04 

$0.00 

3.47% 

46 
The 5th column in Table 3-6 is the rate of odometer fraud after adjustment for vehicle scrappage, 

as calculated in Table 2-11. The 6th column is the cost times the rate calculated from column 2 

and 5. The total in column 6, $42.16 is the average cost (at the time of purchase) of odometer 

fraud pro-rated over the life of the vehicle. 

In the last three years, sales of new passenger vehicles have averaged slightly above 15 million. 

Given that odometer fraud costs consumers an average of $42.16 over the life of the vehicle, the 

annual cost of odometer fraud is $42.16 * 15 million = $632 million for passenger cars, pickup 

trucks, vans, and sport utility vehicles (initial estimate). 

ADJUSTMENT OF THE INITIAL ESTIMATE BASED ON KNOWN ROLLBACKS 

NHTSA’s file of known rollback cases was used in Chapter 2 to adjust upwards the incidence 

rate of rollback, by identifying how many of these rollbacks were not reported in Carfax. Now, 

this file will also be used to adjust the cost estimate, since the actual losses at the time of 

purchase are reported on the file, and they can be compared to the estimates obtained using the 

NADA books. 

There are 924 vehicles on the known rollback file that have both a purchase and sale price on the 

known rollback file and were also found in Carfax with a potential mileage rollback. The 

purchase price is cost the rollback artist paid for the vehicle. In most cases, the wholesaler who 

sold the vehicle to the rollback artist supplies this information. The sale price is the cost the 

person paid for the vehicle from the rollback artist. In most cases, the wholesaler who purchased 

the vehicle from the rollback artist supplies this information. For these vehicles, we will 

calculate the cost using the NADA method and the Carfax mileages and compare that cost to the 

actual cost on the known rollback file. The ratio of the two will be the amount our method 

underestimates the cost of odometer rollback. 

The vehicle’s “book” values before and after the rollback were determined using the NADA 

method described above. The two critical mileages and dates flagged in Carfax as potential 

odometer rollback were used. If the dates were more than 3 months apart, the mileage was 

adjusted to account for additional miles driven during the time period. The total cost of 

odometer fraud at the time of purchase for these 924 vehicles was $1,747,051.25 based on the 

NADA method. Since the 2001 guidebooks were used, the cost is already in 2001 dollars. 

The purchase and sale prices on the known rollback file for these vehicles are not in 2001 

dollars. They are based on the year the vehicle was purchased (before the odometer was rolled 

back) and the year the vehicle was sold (after the odometer was rolled back). Both the purchase 

price and sales price were inflated to 2001 dollars using the Gross Domestic Product price 

47 
index1

. The difference in the purchase price and sales price is the cost of odometer fraud. The 

total cost of odometer fraud at the time of purchase for these 924 vehicles is $2,916,078.93 based 

on the purchase and sales price on the known rollback file. Therefore, the NADA method 

underestimates the cost of odometer fraud by a factor of $2,916,078.93/$1,747,051.25 = 1.67. 

Therefore, the annual increased purchase price consumers pay due to odometer fraud is $632 * 

1.67 = $1,056 million for passenger vehicles. The estimated average increased purchase price 

per rollback is $1,056 million/452,000 = $2,336.28. The lifetime cost (at the time of purchase) 

of odometer fraud is $42.16*1.67 = $70.71. 

The NADA method may underestimate the purchase price increase because it does not consider 

the condition of the vehicle. Typically, late model vehicles that have accumulated high mileage 

in a relatively short period of time are targeted for odometer rollback. These vehicles probably 

look well used when initially purchased by the rollback artist. The vehicle is dirty, the carpet 

looks worn and the upholstery may have stains. But when the rollback artist sells these vehicles 

they probably look very sharp. They probably have new carpet, cleaned upholstery, and are 

washed and waxed. The bad condition of the vehicle when it is purchased by the rollback artist 

reduced the cost even more than the high mileage deduction from the NADA guidebooks. The 

good condition when it is sold increased the cost even more than the addition from low mileage. 

These extra reductions and additions are not included in the NADA method but are included in 

the purchase and sales price from the known rollback file. 

The NADA method probably also underestimates the purchase price increase when the dates of 

the mileage readings are more than 3 months apart. In these cases, the high mileage is estimated 

based on the average annual miles driven. But these vehicles probably accumulate more than the 

average annual miles since they are mostly fleet vehicles. 

The sales price on the known rollback file may include some of the rollback artist expenses. The 

cost for new carpet and the labor to install the carpet and thoroughly clean the interior and 

exterior of the vehicle may be included. These expenses are not included in the NADA method 

and may account for some of the cost differences. 

CONFIDENCE BOUNDS 

The jackknife procedure will be used to produce confidence intervals for the annual cost of 

odometer fraud. This is the same procedure that was used in Chapter 2 to obtain confidence 

bounds for the rate of odometer fraud. The jackknife procedure allows us to estimate the 

variance and standard deviation of the cost of odometer fraud in nine tenths of the data, instead 

of a procedure using one tenth of the data. Nine tenths of the data will contain enough cases to 

estimate the cost of odometer fraud using the method in the preceding section, whereas one tenth 

would not produce valid estimates. 

1 U.S. Department of Commerce, Economics and Statistics Administration, Bureau of Economic 

Analysis 

48 
The Carfax cases were split into ten different subsamples to calculate the confidence bounds in 

Chapter 2. Each subsample contained nine tenths of the data. The multi-celled method in 

Chapter 2 produced the rate of odometer fraud for each subsample. Using the same subsamples 

and the subsample=s rate of odometer fraud, the method described in this chapter produced cost 

estimates in each subsample. Let ε (1) , ε (2) , . . . , ε (10) be the cost of odometer fraud over the life 

of the vehicle in each of the 9/10ths subsample. Let ε = $42.16 be the lifetime cost of odometer 

fraud estimated by using all cases. Let ε *i be the pseudo estimate of ε i , the cost using only onetenth of the cases. The second column of Table 3-7 shows the cost of odometer fraud over the 

life of the vehicle in each subsample. The fourth column shows the Pseudo estimates, ε *i . 

TABLE 3-7 

Estimates and Pseudo Estimates of the Consumer Cost of 

Odometer Fraud over the Life of the Vehicle for Jackknife Procedure 

Estimates Pseudo Estimates 

Cases Except 

Those with Case # 

Cost of Odometer 

Fraud 

Cases with Case # 

Ending in 

Cost of Odometer 

Fraud 

1 $39.99 1 $61.70 

2 $44.61 2 $20.11 

3 $41.22 3 $50.63 

4 $42.57 4 $38.50 

5 $39.89 5 $62.61 

6 $44.95 6 $17.01 

7 $37.83 7 $81.09 

8 $38.25 8 $77.32 

9 $41.01 9 $52.48 

0 $42.98 0 $34.82 

All Cases $42.16 

Here, the pseudo estimates are calculated by solving: 

ε * i =10ε − 9ε( )i =10(42.16) − 9ε( )i . 

49 
These values are used to calculate: 

10 (

1 

10 

1 

* *

2 









∑ ε i −ε )

2 �

∑ε * i 



ε * = 1

10 = 49.63 

10 

10 , is T distributed with 9 degrees of freedom. 

s = 



9 �



 



 

10 = 6.96 

The standard deviation, s / Therefore, 90 �

percent confidence bounds around the cost of odometer fraud (i.e. with α = .05 on each side) is 

$42.16 " (6.96 * 1.833) = $29.40 and $54.92. Therefore, odometer fraud cost $1,056 million 

with confidence bounds from $737 million to $1,376 million, assuming 15 million new 

passenger vehicles annually and using the 1.67 inflation factor. 

50 �
CHAPTER 4 

STATE EFFORTS TO DETER ODOMETER FRAUD 

This chapter presents the revisions the states made to implement the Truth in Mileage Regulation 
 

and their efforts to deter and detect odometer fraud. In October 1997, a questionnaire was sent 
 

to the Department of Motor Vehicle (DMV) offices in each state, the District of Columbia, 
 

Puerto Rico, and American Samoa. The major focus of the questionnaire was on the odometer 
 

disclosure requirements (i.e., “mileage on title requirements”) under 49 CFR 5801

, which was 
 

promulgated in response to the Truth in Mileage Act of 19862

. 
 

The final rule implementing the truth in mileage act required states to use a secure printing 
 

process for their title documents and reassignment documents and to obtain mileage disclosure 
 

on title documents when ownership is transferred. Specifically, the disclosure requirements are: 
 

$ the odometer reading at the time of transfer, 
 

$ the date of transfer, 
 

$ the transferor=s name and current address, 
 

$ the transferee=s name and current address, 
 

$ the make, model, year, body type, and Vehicle Identification Number (VIN), 
 

$ the transferor=s signature and his/her printed name, and 
 

$ the transferee=s signature and his/her printed name. 
 

The title must include a citation referring to the Federal odometer law and state that incorrect 
 

information may result in fines and/or imprisonment. The title must also contain a certification 
 

by the transferor that either the odometer reading reflects the actual mileage, or the reading 
 

reflects the amount of mileage in excess of the designed mechanical limit, or the reading does 
 

not reflect the actual mileage. In most states, this rule required revisions to the title documents 
 

and reassignment documents. 
 

Forty-six states, the District of Columbia and Puerto Rico returned completed questionnaires by 
 

January 1998. Four states and American Samoa did not respond. Below is a summary of 
 

responses to each question on the questionnaire. In the Results section, the term “states”@ refers 
 

to the 48 respondents of the questionnaire. 
 

1

Code of Federal Regulations, Title 49, Government Printing Office, Washington, 1998, 

Part 580. 

2

Truth in Mileage Act of 1986, Public Law 99-579. 

51 
RESULTS 

1. On what date did the DMV offices in your state begin implementing the 

requirements for the odometer disclosure statement to be recorded on the vehicle title, as 

specified by 49 CFR, Part 580 (Enclosed)? (Date) 

The rule required all vehicle transfers to conform with the new disclosure requirement on 

April 29, 1989. The new law authorized NHTSA to provide assistance to any State to conform 

its laws to the new requirements and to provide extensions of time in the event that any state 

required additional time to revise its laws to meet the new Federal criteria. It also authorized the 

agency to approve of an alternate state mileage disclosure requirement if it is consistent with the 

purposes of the new law. NHTSA granted time extension to most states. Eight states (16.6 

percent) began implementing the new requirements before the deadline. It took some states 

several years to comply with the new regulations. Fifteen states started implementing them 

before the first anniversary of the deadline, 16 states by second anniversary and six states before 

the third anniversary. Three states begin implementing the requirement after the third 

anniversary of the deadline. By April 18, 1994, all states complied. In any case, only some of 

the states were meeting all of the requirements before the regulation took effect, unlike many 

NHTSA safety regulations, such as backseat outboard lap/shoulder belts, which were widely 

installed before the regulation took effect. 

2. What changes were made in DMV procedures in order to institute the 

requirements? 

a. New paper (secured printing) 

b. Revised odometer disclosure statement 

c. New procedures (specify) 

d. Other (specify) 

Figure 4-1 shows the types of changes the states had to make to meet the requirements. The 

respondents checked all that applied to their state. Therefore, the total in this table is more than 

48, total number of states responding. Almost all of the states (85 percent) had to revise their 

odometer disclosure statement. More than half of the states had to use new paper to ensure a 

secure printing process (65 percent) and implement new procedures (58 percent) to meet the 

requirements. 

Table 4-1 shows the combination of changes required. Most states had to make many changes to 

meet the new requirements. Twenty-three percent of the states had to use new paper, revise their 

odometer disclosure statement and implement new procedures. Twenty-one percent of the states 

had to make other changes to meet the requirements in addition to the ones stated above. 

52 
FIGURE 4-1 

Type of Change by Percent of States 

0% 

20% 

40% 

60% 

80% 

100% 

Paper Statement Procedure Other 

Type of Change 

Percent of States 

TABLE 4-1 

Changes Required by Number of States 

Response Number Of 

States Percent 

New Paper 4 8% 

Revised Odometer Disclosure Statement 5 10% 

New Procedures 1 2% 

Other 1 2% 

New Paper and Revised Odometer Disclosure Statement 5 10% 

New Paper and Other 1 2% 

Revised Odometer Disclosure Statement and New Procedures 6 13% 

Revised Odometer Disclosure Statement and Other 3 6% 

New Paper, Revised Statement and New Procedures 11 23% 

Revised Statement, New Procedures, and Other 1 2% 

New Paper, Revised Statement, New Procedures, and Other 10 21% 

53 
 
The most common Anew procedures@ listed were restricting the use of Power of Attorney and 

using secure Power of Attorney procedures. Also listed were training employees and dealerships 

about new requirements, and publicizing the new requirements to their citizen. 

The most common “other” listed changes were to the state=s computer system. Some states had 

to reconfigure the computer system to capture additional information, others had to modify their 

data entry systems, and a few had to increase computer storage capacity. A few states had to 

publish new state rules, regulations, and\or statues to implement the new requirements. 

The number of changes and amount of time needed to implement the changes appears to vary by 

state. Seven of the 8 states that met the implementation deadline had only one or two changes to 

make. But the other state that met the deadline had to use new paper, revise their statements and 

implement new procedures. Most of the other states that had to use new paper, revise their 

statements and implement new procedures and even the states that also had other changes to 

make needed a year or two to meet the requirements. The states taking the longest time to meet 

the requirement only needed to make one or two changes. 

The next three questions concern states= practices before the Federal Regulation took effect. 

3. Were any requirements of 49 CFR, Part 580 already in place in your state prior to 

the issuance of this regulation? Yes No 

and 

4. If the answer to question no. 3 is “yes” please specify the nature of the requirements 

that were in place, example, “specific block on title for odometer reading.” 

Eighty-three percent of the states (40 states) had at least one of the requirements in place before 

the regulation was issued. The most common requirement met was odometer reading block on 

the title. In most of the states, that was the only requirement met. Table 4-2 shows the number 

of states by type of requirement met. 

54 
TABLE 4-2 

Number of States by Type of Requirement Met 

Requirement met Number of States 

Certification Statement 7 

Date of Transfer 2 

Odometer Reading on Title 34 

Records Retention Requirements 1 

Secure Paper 9 

Transferor=s Signature 2 

Transferee Signature 2 

5. If an odometer block existed on the prior title document, was it an “enforced data 

item” --i.e., required before issuance of title? Yes No 

Thirty-one states (67 percent) enforced the odometer block if it existed on the prior title 

document. Fifteen states do not. An “enforced data item” means the item (in this case the 

odometer reading) is required before the title is processed. 

The questionnaire returns to the states= current practices. 

6. Do the state DMV offices check, either routinely or on a “spot-check” basis, to 

verify odometers submitted by title applicants? Yes 

(routinely) 

Yes (spot-check) Don=t check 

More than half of the state Department of Motor Vehicles offices check the odometer reading 

submitted by title applicants. Figure 4-2 shows 42 percent routinely check and 15 percent spot 

check. 

55 
FIGURE 4-2 

Percent of States that Check Mileage 

Routinely 

42% 

Spot 

Check 

15% 

No 

43% 

7. Does your system alert the titling offices, or title applicant, when a vehicle is being 

titled with lower mileage than indicated on a previous title? Yes (alert titling 

office) Yes (alert applicant) No alert given 

Most states alert the titling offices and/or applicant when a vehicle is being titled with lower 

mileage than indicated on a previous title. But surprisingly 19 percent of the states neither alert 

the title office or applicant when a vehicle is being titled with lower mileage than indicated on a 

previous title. Table 4-3 shows how the states responded to this question. 

TABLE 4-3 

How States Respond When a Vehicle Is Being Titled with Lower Mileage than 

Indicated on a Previous Title 

Response Number Of 

States Percent 

Yes - alert titling office 12 25% 

Yes - alert applicant 14 29% 

Yes - alerts titling office and applicant 13 27% 

No alert given 9 19% 

56 
8. Does your state capture odometer readings at any time other than titling --i.e., 

annual registration, safety or emissions inspections? Yes No 

If “yes”, are the readings entered into the title records? Yes No 

Slightly fewer than half of the states (46 percent) capture odometer readings other then when the 

vehicle is titled. But only 18 percent of the states who capture other readings enter the readings 

into the title records. 

Questions 6, 7, and 8 list three different ways to detect odometer fraud. Very few states use all 

three ways listed in these questions to detect odometer fraud. Sixteen states (33 percent) 

routinely verify odometer readings submitted on title applications and alert the titling office or 

the applicant when a vehicle is being titled with lower mileage than indicated on a previous title. 

Only four of those sixteen states also capture and automate odometer readings at any time other 

than titling. 

9. Do you take any action when odometer readings show signs of alterations on the 

title being surrendered with the application for a new title? Yes No 

If “yes”, are the readings entered into the title records? Yes No 

If “yes”, please describe action taken. 

Most states (94 percent) take action when the odometer readings show signs of alterations on the 

title being surrendered. Table 4-4 summarizes the actions taken. Of those states that take action, 

65 percent do not enter the reading into the title records. The action most commonly taken by 

these states is to process the title only after subsequent documents explain the alteration. In 

some states, the cases are referred to law enforcement officials if odometer fraud is suspected. 

Only a handful of states routinely refer the cases to law enforcement officials for investigation. 

Thirty-one percent of the states that take action do enter the reading into the title record. But in 

most of these states, the correct reading is entered or the reading is branded as unknown or not 

actual mileage. In some of these states, the cases are also forwarded to law enforcement 

agencies for investigation. 

Only the true odometer reading should be entered into the title record. It appears that it is 

irrelevant whether a state enters or does not enter an altered odometer readings. In either case, 

the states enter what they believe is the true mileage or the mileage is branded as incorrect or 

unknown. 

57 
TABLE 4-4 

States That Do and Do Not Enter an Apparently Altered Reading 

into the Title Records by Actions Taken and Number of States 

States that do not enter the reading into the title records 

Action taken Number of 

States 

The title is not processed until subsequent documents explaining the 

alteration are obtained. 

13 

The case is investigated unless subsequent documents explaining the 

alteration are obtained. The case is always investigated if DMV has 

reason to suspect illegal intent. 

7 

DMV notifies law enforcement agency for investigation. 5 

Do not issue a new title. 3 

The discrepancies must be resolved, otherwise title is branded and 

odometer discrepancy is noted or mileage is recorded as not known. 

2 

Obtain verification from inspection station. 1 

States that enter the reading into the title records 

DMV notifies law enforcement agency for investigation. 4 

Title application is suspended pending receipt of supplemental 

assignment documents showing correct mileage. Copies of altered 

documents may be sent to the odometer enforcement area. 

4 

Title is branded. 2 

Background check and possible brand on title. 1 

Refused if noticed, otherwise branded “not actual mileage”. 1 

Conduct investigation if reading is incorrect on title. Correct title to 

reflect mileage, if known. Otherwise, true mileage is not known. 

1 

10. How frequently do applicants request a DMV check of odometer readings, 

(i.e., title/odometer history)? Estimate percent of title applicants. 

58 
More than half of the states (58 percent) estimate that less than 5 percent of the applicants 

request an odometer reading check. Six states estimate that 5-10 percent of the applicants 

request a check. Four states estimate 15-25 percent and one state estimates 40 percent. Three 

states estimate that more than 50 percent of the applicants request a check. (Six states did not 

answer this question.) For the 42 states that answered the question, the average is approximately 

9 percent. 

11. What is the fee for a title history check? $ per check, or 

$ per title/record 

Most fees are $5.00 or less per check or per title/record. Figure 4-3 shows the cost per check and 

per title/record by percentage of states. The cost per check varies moderately by state from 

$1.00 to $17.50. The cost per title/record also varies by state from $.075 to $35.00. Eleven 

states provided fees for both per check and per title/record. In four of the 11 states, the fee per 

title/record was at least twice the fee per check. In the other seven states, the fee was the same 

per check and per title/record. The average cost per check is $4.86 weighted by the percentage 

of applicants requesting a check and the average cost per title check is $3.98 weighted by the 

percentage of applicants requesting a check. 

FIGURE 4-3 

Fee by Percent of States 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

<=$5.00 $5.01 to 

$10.00 

> $10.00 

Percent of States 

Check Title/Record 

As expected, the state with the lowest fee per title/record check ($0.75) has one of the highest 

percentage (60 percent) of applicants requesting a check. The states with the highest fees 

($15.00 or more) per check or per title/record have a very low percentage (0-2 percent) of 

59 
applicants requesting a check. But 61 percent of the states that have 0-2 percent of the applicants 

requesting a check charge a modest fee ($5.00 or less) per check or per title/record. 

To estimate the total spent by applicants for odometer checks, we need to estimate the number of 

title transaction a year, specifically the number of older vehicle title transactions a year. There 

are 15 million new vehicles sold annually, so there are 15 million new vehicle transactions 

annually. There are approximately 190 million passenger vehicles registered, so there are 

approximately 190 - 15 = 175 million older vehicles registered. If we assume an older vehicle 

changes hands twice during its lifetime (14 years), then there are approximately 175 * 2/14 = 

25 million older vehicle title transfers a year for a total of 15 + 25 = 40 million transactions. 

Thus, 40 * 9% = 3.6 million applicants request a title check per year. Therefore, it cost these 

applicants 3.6 * $4.86 = $17 million for odometer reading checks or 3.6 * $3.98 = $14 million 

for title/record checks. This is inexpensive when compared to the annual cost of odometer fraud 

($235 million) estimated in Chapter 3. 

12. Has the rate of title/odometer history checks changed since the implementation of 

the new odometer disclosure requirement? Yes, increased Yes, decreased 

No change 

More than half of the states (53 percent) did not see a change in the rate of title/odometer history 

checks since the implementation of the new odometer disclosure requirements. In 36 percent of 

the states, the rate of title/odometer history check increased and in 4 percent of the states, the rate 

decreased. 

13. Was the change to the new requirement accompanied by any special publicity, 

(i.e., news bulletin, media announcement)? Yes No If Ayes@, please 

specify. 

Sixty-seven percent of the states announced the new requirements with special publicity. The 

most common type of publicity was directed toward the general public with press releases, 

public service announcements, and/or newspaper ads. Some states also notified dealers with 

direct mailings or articles in trade publications. Other states offered seminars to dealers. A few 

of the states also notified title agents, lienholders, and/or attorneys about the changes with 

bulletins or seminars. 

14. Was the title fee increased as a result of the requirements of 49 CFR, Part 580? 

Yes No If increased, please state: Old fee 

New fee 

60 
Most of the states (46) did not increase the title fee because of the requirements. Only two states 

did increase the title fee as a result of the requirements. In one state, the fee went from $3.50 to 

$5.00 and in the other state the fee went from $5.00 to $10.00. 

15. Does your state operate any independent consumer protection office(s) which can 

assist consumers in the area of odometer fraud? Yes No 

Don=t know 

More than half of the states (58 percent) have independent consumer protection offices that can 

assist consumers in the area of odometer fraud. Twenty-nine percent of the states do not have an 

independent consumer protection office and 12 percent of the state DMV=s did not know if their 

state has an independent consumer protection office. 

16. If the answer to question no. 15 is Ayes@, please provide address/phone number, if 

known. 

States listed the address and phone number of the independent consumers protection office. 

Responses to this question are not included in this report. 

17. If your state has a consumer protection office(s), do they interact with the DMV in 

cases of suspected odometer fraud? Yes No If Ayes@, please 

explain. 

More than 80 percent of the states with consumer protection offices do interact with the DMV in 

cases of suspected odometer fraud. In most states, the DMV office will provide information and 

other assistance to the consumer protection office. In a few states, the consumer protection 

office is part of the DMV. 

18. Are you aware of any odometer fraud investigation cases that have been conducted 

in your state in the past year? Yes No 

Sixty-three percent of the states are aware of an odometer fraud investigation being conducted in 

the past year. 

19. If the answer to question no. 18 is Ayes@, please cite the investigating agency, (name, 

address) if known. 

61 
States listed the name and address of their state=s investigating agency. Responses to this 

question are not included in this report. 

20. Are the DMV offices in your state familiar with the National Law Enforcement 

Telecommunication System (NLETS) operated by the United States Department of 

Justice? Yes No 

and 

21. Do the DMV offices in your state utilize the NLETS for assistance in odometer 

fraud investigations? Yes No Don=t know 

Sixty-nine percent of the states are familiar with NLETS. NLETS is a computer tracking system 

that directs computer inquiries to each state to locate the vehicle by the VIN. Almost half of the 

states familiar with NLETS use it in odometer fraud investigations. The remaining states 

familiar with NLETS either do not use it or do not know if they use it. Figure 4-4 shows the use 

of NLETS by the states that are familiar with NLETS. 

FIGURE 4-4 

Percent of States that use NLETS 

No 

30% 

Don't Know 

21% 

Yes 

49% 

22. Do you have any information to indicate that the new odometer disclosure 

requirement is helping to deter odometer fraud? Yes No If Ayes@, 

please explain. 

Only seven states (15 percent) do have information that indicates the new disclosure requirement 

is helping to deter odometer fraud. One state saw a decline in odometer fraud from 1987-1995, 

but now sees a rise because there are no funds available to investigate odometer fraud cases in 

their state. The other states that responded Ayes@ to this question explained that the new 

disclosure requirements make it easier to follow a vehicle=s history and mileage or to make 

buyers more aware of the odometer fraud problem. The courts in one state have become stricter 

on enforcement of odometer fraud. The majority of states do not have any information to 

indicate the new requirement is deterring odometer fraud. 

62 
23. Are you aware of any studies or articles in your state which have dealt with 

odometer fraud? Yes No If “yes”, please cite. 

Only five states were aware of articles in their state on odometer fraud. None of the other states 

knew of any articles. None of the 48 states were aware of any studies on odometer fraud. 

24. Please provide any comments you would like to make concerning odometer fraud, 

(its extent, effectiveness of efforts to combat, additional actions that should be taken, etc.) 

Nineteen states provided comments concerning odometer fraud. Most of the comments were 

recommendations to reduce and detect odometer fraud. The following is a summary of their 

recommendations: 

$ Increase penalties for odometer fraud. (4 states) Below are some of the specific 

comments received on this topic: 

1) “State laws is only a misdemeanor and should be upgraded to a felony.” 

2)  “Make odometer fraud a predicate offense3

 so forfeiture of assets could be 

possible.” 

3)  “No Federal or State Attorney from the Attorney General=s Office will represent a 

consumer who has purchased a vehicle with an odometer roll-back. The Federal 

Information and Cost Saving Act, 15 USC SS 1981-1991, allows three time=s 

actual damages or $1500, whichever is greater. Unfortunately, since no AG=s will 

take these cases, the consumer ends up being stuck since they cannot afford a 

lawyer. The only way to stop odometer fraud is for these individuals to be 

prosecuted.” 

$ Implement the National Motor Vehicle Title Information System (NMVTIS). (3 states) 

The Anti-Car Theft Act of 1992 mandated this. It is supposed to be a system similar to 

Carfax but run by the states. One state believes “NMVTIS will allow additional outlets 

to deter odometer fraud.” Another state says “If used properly, NMVTIS will further aid 

efforts to combat odometer fraud.” 

3

A predicate offense in this state=s criminal code appears to be a conviction of a prior 

odometer fraud offense or conviction of another offense such as a homicide committed while 

rolling back an odometer. 

63 
$ Require uniform titling procedures across the U.S. (3 states) One state wants “detailed 

rules, regulations, policies from NHTSA.” Another state is “often criticized for 

enforcing and requiring what other states do not.” 

$ Increase resources. (3 states) The states want more staff to detect and investigate 

suspected odometer fraud cases and to prosecute criminals. One state would like “help 

with enforcement of small cases; 1-25 vehicles from the federal government.” 

$ Increase public awareness. (2 states) 

$ “Make odometer reading blank with each disclosure instead of having a box to check.” 

(1 state) 

$ Require mileage reading more frequently. (1 state) This state says, “Odometer fraud is 

almost impossible to stop since it usually involves late model vehicles with one title 

issued, the initial title.” This state “requires vehicle owners to provide mileage at each 

registration renewal; the mileage is verified by DMV vehicle inspectors and is loaded 

into DMV=s database. This makes it extremely difficult for an individual to roll back 

mileage and not be caught.” 

Several states had comments about the Power Of Attorney (POA)4

. 

1)  “Many states do not have or provide secure reassignment documents and/or POA. This 

creates a hardship on citizens and industry when involved in inter-state vehicular 

commerce.” 

2)  “It is possible that common use of the secure POA forms may extend beyond the use 

intended.” 

4

Disclosure of odometer information is done on a power of attorney form when the 

transferor title is held by a lienholder, and therefore not physically in the possession of the 

transferor. It is also used in cases where a vehicle title has been lost. In such cases, the 

transferor gives power of attorney to the transferee for purposes of mileage disclosure. POA 

forms are issued by the state to the transferor. The transferor discloses the odometer at the time 

of transfer on the POA form. The transferee signs and prints his/her name. Upon receipt of the 

transferor=s title, the transferee completes the mileage disclosure on the title exactly as it 

appeared on the POA form. In some cases, the transferee may give power of attorney to his/her 

transferor to review the title and any reassignment documents for mileage discrepancies. 

Whoever exercises the power of attorney must also complete a certification that he/she has 

disclosed on the title document the mileage provided on the POA form and the mileage is greater 

than previously stated mileage on the title and reassignment documents. If the mileage is less 

than that previously stated on the title and any reassignment documents, then the power of 

attorney is void. 

64 
3)  “The use of the secure POA has not been used properly and has added an additional step 

for automobile dealers. Dealers do not understand its use.” 

4) “Stricter guidelines on POA for dealers and lienholders.” 

5)  The state “was contacted earlier this year by the [state] Auto Dealers Association 

concerning the restrictive nature of statutory requirements associated with the secure 

POA forms. This association advises that [state] dealers need relief and may seek 

legislation to amend statute or petition to amend current rules.” 

The following is a summary of the other comments: 

$ The requirement for printed names is the most beneficial feature of odometer laws. It is 

“valuable for investigating complaints.” 

$ “Consumer and vehicle dealers are more aware of odometer fraud. Interest by dealers in 

checking vehicle title mileage information has increased.” 

$ One state “investigates approximately 100 consumer complaints/inquiries about 

odometer fraud each year. The DOT also conducts large odometer fraud cases with a 

total of approximately 500-700 vehicles each year. Approximately 50 percent of [the] 

vehicles are found “spun” and approximately 85 percent of the vehicles are spun if they 

were leased vehicles.” 

$ “Close coordination between states re: exchange of titles and related vehicle records.” 

$ “NHTSA has failed to oversee compliance by the states with the regulations contained in 

49 CFR, Part 580, and consequently there are states that are not in complete compliance.” 

SUMMARY 

The new odometer disclosure requirements contained in 49 CFR, Part 580 were extensive. None 

of the states met all the requirements before the regulation was issued and only 8 states met all 

the requirements before the April 29, 1989 deadline. By April 18, 1994, all states complied. 

Since all states comply and require odometer disclosure for all vehicle transfers, all used car 

dealerships are also complying. They are disclosing the odometer reading for all vehicle 

transfers, although the reading disclosed may not be the true mileage on the vehicle. 

Most of the states had many changes to make to meet the new requirements. Even though most 

of the states already had an odometer reading block on their title, most states had to revise their 

65 
odometer disclosure statement and more than half of the states had to use new paper and/or 

implement new procedures. 

As of late 1997, very few states appeared to have a comprehensive detection program in place to 

identify cases of suspected odometer fraud. Only four states took all three of the following steps 

to detect and deter fraud: (1) routinely verify odometer readings submitted by title applicants, (2) 

alert the titling office or applicant when a vehicle is being titled with a lower mileage than 

indicated on a previous title, and (3) capture and automate odometer readings at any time other 

than titling. However, a much larger number of states had implemented at least two of the steps. 

Sixteen states routinely verified odometer readings submitted on title application and alerted the 

titling office or the applicant when a vehicle is being titled with a lower mileage than previously 

indicated on the title. Most states had implemented at least one of these steps. 

Fewer than ten states notify law enforcement agencies when the odometer reading show signs of 

alterations on the title being surrendered. Most states allow the applicant to provide additional 

documents to explain the apparent alteration first. If the additional documents are not acceptable 

then in some states the case is referred to the law enforcement agency. 

Most applicants do not request a check of odometer reading or title history. Only three states 

estimate that more than 50 percent of the applicants request a check. The average frequency of 

applicants requesting a check of odometer readings is 9 percent. This is an inexpensive service. 

The weighted average fee per check is $4.86 and the weighted average fee per title/record check 

is $3.98, weighted by the percentage of applicants requesting a check. 

More than half of the states have independent consumer protection offices and most DMV 

offices interact with these offices in cases of suspected odometer fraud. Almost seventy percent 

of the states are familiar with NLETS and almost half of those states know that their state uses 

NLETS. Almost 65 percent of the states are aware of odometer fraud investigations being 

conducted in the last year. But only seven states have information indicating that the new 

disclosure requirements are deterring odometer fraud. 

66 
CHAPTER 5 

FEDERAL EFFORTS TO DETER ODOMETER FRAUD 

Since 1978, NHTSA has maintained at its headquarters location, in Washington, an Odometer 

Fraud Enforcement Program. For the most part, this program has concentrated on the 

investigation of specific cases of alleged odometer fraud, primarily in small geographical areas 

suspected of being (or known to be) "hotbeds" for such practice. Cases investigated by NHTSA 

are usually turned over to the U. S. Department of Justice (DOJ), or to state enforcement 

authorities for prosecution or further legal action. 

ODOMETER FRAUD STAFF 

NHTSA odometer fraud staff (OFS) consists of 8 employees. There are two headquarters staff 

members, four regional investigators and two regional staff assistants. Each one of the regional 

investigators is responsible for one-fourth of the country: Northeast, Southeast, Midwest, or 

Western. Figure 5-1 shows the states in each region. 

Figure 5-1 NHTSA's Odometer Fraud Regions 

Western Midwest Northeast Southeast 

67 
The Southeast region also includes Puerto Rico and the Western Region also includes Guam. 

The Northeast and Southeast regional offices are in Washington, DC, the Midwest office is in 

Kansas City, MO, and the Western office is in Denver, CO. 

FEDERAL INVESTIGATIONS 

NHTSA’s prime weapon to deter odometer fraud is its power to investigate cases and refer them 

to the DOJ for prosecution. Table 5-1 shows the investigations conducted for the last 12 years 

and the total investigations since the OFS was established. The third column, investigations 

completed, represents the investigations completed where odometer fraud was substantiated. 

The average odometer fraud investigation takes about a year to complete. So not all the 

investigations opened in a particular year are closed in that same year. The 69 investigations 

opened in 1990 did not all close in 1990. Some of the 38 closed and substantiated investigations 

in 1990 could have started the year before. Therefore, the percentage of completed 

investigations by year is inappropriate and not included in the table. 

TABLE 5-1 

NHTSA’s Odometer Fraud Investigations by Year 

Year Investigations Vehicles 

Involved 

Vehicles 

Per case 

Referred 

to DOJ 

Percent 

Referred 

Cases 

Prosecuted 

Defendants 

Opened Completed Convicted*

1990 69 38 320 8.4 21 55% 13 16 

1991 63 25 717 28.7 23 92% 18 18 

1992 36 22 1,563 71.0 20 91% 12 17 

1993 22 12 105 8.8 9 75% 5 6 

1994 37 39 2,274 58.3 34 87% 23 23 

1995 38 26 1,468 56.5 21 81% 16 26 

1996 26 14 852 60.9 9 64% 9 16 

1997 26 9 730 81.1 9 100% 3 3 

1998 33 14 1,006 71.9 9 64% 7 7 

1999 17 14 1,707 121.9 14 100% 4 3 

2000 20 17 1,831 107.7 14 82% 1 1 

2001 5 3 233 77.7 2 67% 1 2 

Total 

90-01 

392 233 12,806 185 112 138 

Total 

78-01 

2,038 997 16,538 352 230 265 

* Convictions are under the year of case completion, not the year conviction was obtained. 

68 
The number of vehicles involved per case appears to be increasing. This probably accounts for 

the declining number of cases opened in recent years. Since each case involves more vehicles, it 

takes more time to investigate but the number of investigators has remained constant. Therefore, 

fewer new cases are opened. NHTSA has no specific evidence that the declining number of 

opened cases is due to a decline in odometer fraud. Over the last twelve years each case 

involved approximately 12,806 / 233 = 55 vehicles per case or 12,806 / 138 = 92 vehicles per 

convicted defendant. 

The DOJ will only prosecute certain cases. The cases must involve at least 100 vehicles or show 

a pattern of fraud by the defendant. NHTSA consistently refers a high percentage of completed 

and substantiated cases to the DOJ. The average over the 12-year period is 80 percent. DOJ 

takes about one to two years to prosecute a case. So only some of the referred cases in recent 

years have been fully prosecuted. The remaining cases are still pending at the DOJ. DOJ 

prosecuted about 15 cases a year between 1990 and 1995. During that same time frame, about 

18 defendants a year were convicted of odometer fraud. Prison sentences for odometer fraud 

convictions range from 2 to 6 years. 

The 2001 case totals are low because the majority of the investigators' time was devoted to 

supporting DOJ to get some of the backlogged cases prosecuted. Even though the table shows 

cases closed and referred to DOJ in 2001, the OFS had to devote a lot of support time to DOJ 

once DOJ starts grand jury proceedings. One case went to a lengthy trial that tied up an 

investigator for almost 5 months. 

Table 5-2 shows the amount of criminal fines and restitution ordered for odometer fraud cases by 

year. The Victims Rights and Restitution Act of 19901

 required the courts to order restitution 

from the convicted criminal before assessing fines. Therefore, if there are remaining assets after 

the ordered restitution is collected, it can be collected for fines. But in most cases, the assets of 

convicted criminals are insufficient to provide for the total restitution ordered, o the courts 

impose modest or no fines. 

This act shifted the money previously ordered for fines to restitution. Prior to 1990, the courts 

ordered an insignificant amount of restitution: approximately $156,500 was ordered for 

restitution and $2,516,500 was ordered for fines. Since 1990, the total amount of federal fines 

imposed for odometer fraud is $846,000 and the total amount of restitution ordered for odometer 

fraud is $4,029,300. The average fine per defendant from 1990-2001 is about $6,130 and the 

average restitution ordered per defendant in the 1990's is $29,198. Since the average case 

involved 92 vehicles, the restitution per vehicle is $29,198/92 = $230, well below the estimated 

$2,336 actually lost by consumers per rollback (Chapter 3). The restitutions ordered might not 

be covering the additional cost consumers paid at the time of purchase for vehicles with rolled 

back odometers (probably because defendants do not have sufficient assets to pay full 

restitution). 

1

Victims Rights and Restitution Act of 1990, Public Law 101-647. 

69 
TABLE 5-2 

Fines and Restitution for Odometer Fraud Cases by Year 

Cases 

Completed & 

Substantiated 

Cases 

Prosecuted 

Defendants 

Convicted* 

Criminal Fines 

Federal* 

Restitution 

Ordered* 

1990 38 13 16 $71,100 $37,300 

1991 25 18 18 $6,200 $22,000 

1992 22 12 17 $139,500 $65,000 

1993 12 5 6 $6,000 $34,000 

1994 39 23 23 $21,000 $187,000 

1995 26 16 26 $130,700 $294,500 

1996 14 9 16 $63,000 $1,611,500 

1997 9 3 3 $10,000 $162,000 

1998 14 7 7 $80,000 $1,532,000 

1999 14 4 3 $232,500 $41,000 

2000 17 1 1 $1,000 $0 

2001 3 1 2 $85,000 $43,000 

Total 90-01 233 112 138 $846,000 $4,029,300 

Average per 

Defendant 

$6,130 $29,198 

Total 

78-01 

997 230 265 $3,368,100 $4,385,200 

* Convictions, fines, and restitution ordered are under the year of case completion, not the year 

of conviction. 

ASSISTANCE TO STATES AND COMMUNITIES 

Besides their own investigations, the OFS provide much needed assistance to state and local law 

enforcement agencies in their investigations. The interstate nature of odometer fraud, and the 

used car industry as a whole, creates many problems for these agencies since they have no 

authority to compel the production of evidence from outside of their state. Because NHTSA has 

nationwide authority, OFS assists the state and local agencies in obtaining the evidence 

necessary to complete their investigations. In many cases, the investigators have formed and 

provide leadership to multi-state teams to enhance enforcement efforts in specific geographical 

areas where odometer fraud is widespread. 

The OFS investigators are considered to be the national experts in odometer fraud. Therefore, 

they are called upon to provide training to state and local agencies. During the past few years, 

OFS has trained more than 3,000 titling officials in state motor vehicle departments in detecting 

70 
altered and fraudulent motor vehicle title documents. The investigators also meet with members 

of the new and used car industry to advise them of their investigative activities and garner their 

support for NHTSA's law enforcement program. 

In the 1980's, the enforcement program was augmented with funding in the form of state grants. 

These funds have primarily been used to promote and assist odometer fraud enforcement efforts 

at the state level. The funding in the form of cooperative agreements allows states to initiate or 

enhance their odometer fraud programs. In some cases, the funding provides in-depth training 

for state investigators. This enhances the state's capability of investigating and deterring 

odometer fraud and increases NHTSA's capability for investigating odometer fraud for federal 

prosecution. Table 5-3 shows the amount of funding available by fiscal year to states for their 

odometer fraud program. 

TABLE 5-3 

State Odometer Fraud Funding Available by Fiscal 

Year 

Fiscal Year Amount 

1996 $60,000 

1997 $60,000 

1998 $135,000 

1999 $150,000 

2000 $150,000 

2001 $150,000 

2002 $150,000 

2003 $150,000* 

* Amount requested. 

ASSISTANCE TO THE PUBLIC 

Since 1993, OFS has been notifying all victims of odometer fraud identified during their criminal 

investigations as required by the Victims Rights and Restitution Act. During the past three 

years, more than 4,600 victims have been notified. The notification serves two purposes. The 

first is to advise them that they have been defrauded and how to recover their losses, and the 

second is to let them know that when they sell their vehicle they must disclose to the buyer that 

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the odometer reading is not the true mileage. This ensures that subsequent purchasers of the 

vehicle do not also suffer financial losses. Victims also are given documented evidence of the 

high mileage and information outlining various methods of determining their losses. 

The victim notification process has not only been successful in deterring odometer fraud, but has 

been extremely beneficial to the consumers who purchased the vehicles. Since the majority of 

the tampering occurs in the wholesale market, retail dealers are making more of an effort to 

ensure that odometers in the vehicles they are purchasing from wholesalers have not been rolled 

back. When victims receive a notification letter, they normally return to the dealer where they 

bought the car and demand satisfaction. Although the retail dealers are not usually responsible 

for tampering, they will normally settle with the consumer in order to protect their reputation in 

the community. Recently, OFS completed an investigation in New Jersey and Pennsylvania. The 

four defendants pleaded guilty and received sentences ranging from probation to 64 months in 

prison. As a result of the victim notification letters in that case, the auto auction that sold the 

vehicles to the retail dealers settled with all 398 consumers for a total of $1.4 million. The 

auction, although not responsible for the tampering, made the settlements to show good faith to 

their customers, the retail dealers. In another investigation in Colorado, OFS identified and 

notified 74 consumers. As a result of this case, the defendant was sentenced to 30 months in 

prison and was ordered to pay $429,000 in restitution to the consumers and an auto auction. 

Even though there is no provision in the Federal odometer law for NHTSA to take an action on 

behalf of a defrauded consumer, OFS has established a successful program to respond to 

consumer problems. Each week the staff responds to an average of 25 complaints from 

consumers who believe they have bought a used car with an odometer that has been rolled back. 

The consumers are provided with instructions as to what evidence is necessary to prove the 

rollback, how to obtain the evidence, what action to take to recover their losses, and how to 

determine the losses. Some of the consumer complaints lead to OFS investigations. 

SUMMARY 

NHTSA’s odometer fraud program is deterring odometer fraud. NHTSA refers most of their 

completed and substantiated odometer fraud cases to the DOJ for prosecution. The DOJ has 

prosecuted more the half of the NHTSA cases and has convicted 138 defendants in these cases 

over the last 12 years. NHTSA odometer fraud program is also helping states to deter odometer 

fraud. NHTSA assists with state investigations, trains state titling clerks and investigators, and 

funds states to initiate or enhance their odometer fraud programs. 

NHTSA is also deterring odometer fraud by notifying victims that they have been defrauded. 

NHTSA advises the victims that when they sell their vehicle they must disclose that the 

odometer reading is not the true mileage so the next owner is not defrauded. The notification 

also helps victims recover their losses mostly from the retailers. This in turn makes the retailers 

leery of purchasing vehicles from wholesalers, so the retailers make more of an effort to ensure 

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that the odometers have not been rolled back in the vehicles they are purchasing from 

wholesalers. 

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RECOMMENDATIONS 

More States should keep annual odometer readings either from vehicle registrations, emission 

inspections, or safety inspections. More frequent odometer readings would limit the value of 

rolling back the odometer by taking some of the profit out of it. More States should check title 

histories and annual odometer reading information when registering vehicles to deter and detect 

odometer fraud. 

Additional funding for NHTSA’s enforcement program could 

• Provide grants or technical assistance to States for computerized searches of title 

histories to identify vehicles that may have had their odometer rolled back. 

• Develop a standardized training program for titling clerks and train all state titling clerks 

to check titles for odometer roll back. The program would illustrate the common 

practices used by criminals to alter odometer readings on titles so that the clerks would 

know what to look for and where to look for altered readings. 

• Increase the state grant program that promotes and assists state odometer fraud efforts 

and provides in-depth training to state investigators. 

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