Watch out for the 'use' in that used car Rolling back odometers in popular models is a thriving business

August 24, 1996|By Marcia Myers | Marcia Myers,SUN STAFF

Mark Utz thought he was getting a sweetheart deal when he plunked down $18,000 at a Bel Air dealership for a 1991 Ford Explorer with only 36,000 miles. Problem was, the car had a secret past -- 56,000 miles he knew nothing about.

because as soon as you roll it off the lot, the value drops," said Utz, a Bel Air resident who bought the vehicle in October 1994.

"But what does this do to the used-car industry? I'm going to have to think twice."

The cost of a new car -- on average more than $20,000 -- has produced record high demand for used cars, and the temptation for large-scale odometer fraud, according to NHTSA.

"For most people, the alternatives are either to lease or buy used," said Richard Morse, chief of NHTSA's odometer fraud team.

In the past three years, complaints about odometer fraud have quadrupled at the Maryland Motor Vehicle Administration. At NHTSA, complaints nationwide have tripled since 1994.

The rollbacks are particularly prevalent in the heavily populated Washington-New York corridor, said Morse. Lax rules in New Jersey and Virginia on recording mileage on car titles contribute to the problem in this region, he said.

Maryland issued this month a new type of car title, which is harder to alter and should make the work of rollback artists more difficult, but that is little consolation to car buyers such as Mary Hesse.

In January 1995, the Ellicott City woman went to a local dealership and bought a 1990 Chevy Blazer that appeared to have been driven only 43,000 miles. The $12,700 car actually had been driven 130,404 miles.

It began falling apart almost immediately. The wheel bearings wore out, a window fell off its track and the transmission began to fail.

Hesse spent more than $700 in repairs before receiving a letter from a federal prosecutor in North Carolina, informing her that the car's odometer had been rolled back by a multistate fraud ring.

At about the same time, Dennis Miller, of Baldwin, spent $10,000 on a '92 Ford Taurus he thought had 43,000 miles. Later, after repair bills that included $1,400 for a transmission overhaul, he received a similar notice from federal authorities and discovered that the car had been driven at least 115,000 miles when he bought it.

"I thought, gee, this explains a lot," Miller said. The car now sits undriven in front of his home as he negotiates a settlement with the dealership.

In the past, buying from dealers has given car buyers an extra layer of security against odometer rollbacks, said Charles Schaub, an investigator for the Maryland Motor Vehicle Administration.

"They know where to find the dealership if they have problems with the car," he said.

But with fewer trade-ins and greater demand for used cars, dealers are buying more and more from wholesalers. Where the cars come from often is not easy to determine.

The fraud rings often snap up desirable models from leasing companies or at car auctions and give them a quick clean-up. Sophisticated operations not only alter odometer records on car titles by removing the original ink, they "launder" the titles and hide behind phony companies.

Even professional investigators can have a tough time retracing the path.

Protection against the scheme means extra care is necessary on the part of car buyers.

"The best thing you can do is to take the car to a good, reliable mechanic and see if the wear and tear is consistent with the odometer reading," said Morse from NHTSA.

Normal mileage is 12,000 to 15,000 miles a year.

"Some dealers are under the impression that as long as they didn't do it, it's not a problem," said Schaub of the MVA. But dealer mechanics should be able to quickly catch many inconsistencies and better protect their customers, he said.

"We're becoming more aware of the problem," said Ray Hollinger, general manager of Davis Buick-GMC Truck in Westminster, which sold a tainted car unknowingly to one of its customers.

"We seldom buy from wholesalers, but we're talking right now about ways to prevent this."

Late-model sports utility vehicles, such as Explorers, Broncos and Cherokees, are particularly vulnerable since they are popular and expensive when bought new.

NHTSA's priority is cracking the biggest fraud rings. Their investigators accept only cases involving 100 or more cars; they're working 70 such cases currently.

A law enforcement task force also is being formed to coordinate investigations throughout the mid-Atlantic region, with a possible headquarters in Baltimore.

One of the first big cases to come to trial recently ended in North Carolina with the convictions of numerous defendants, including two Towson men, who participated in a scheme spanning at least six states and costing North Carolina drivers an estimated $4 million.

They could receive up to three years in prison when they are sentenced next month.

"I want the word out," said Morse. "If you're under investigation, you're probably going to go to prison someday."

Tips for used-car buyers:

Check the vehicle for evidence of tampering -- marks on the odometer, misaligned numbers -- and check the mileage entered on oil stickers, inspection stickers, tire warranty cards.

Check the tires. If the odometer reading is less than 25,000 miles, the vehicle should have the original tires. All four tires should be the same brand, and will usually be radial tires.

If the odometer reading is entered on the title, check the reading on previous titles to determine if and when alterations occurred. Previous titles may be on file with the Motor Vehicle Administration.

Have a reliable mechanic inspect the car.

If you suspect odometer tampering, call the Attorney General's Office Consumer Protection Division, 528-8662, or investigators at the MVA, 768-7536.

Pub Date: 8/24/96

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