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Car dealership accused of not disclosing odometer discrepancy to customer

NHTSA: Estimated 450,000 cars sold yearly with false odometer readings
Posted at 8:00 AM, Nov 17, 2019
and last updated 2019-11-18 01:00:59-05

EL PASO COUNTY — A Colorado Springs woman says a local car dealership sold her a truck with a rolled back odometer.

The mileage discrepancy was documented in the vehicle's Carfax history report, but it was not disclosed on the "Bill of Sale" documents every dealership in the country is required to provide.

The law requires car dealerships (new and used) to disclose the actual mileage of a vehicle and inform the buyer if an odometer has been tampered with or destroyed, but there's a legal "loophole".

Cars 10 years or older are exempt from that disclosure rule, meaning dealerships can keep this information a secret from customers.

In July of this year, Chloe Chace bought a used 2000 Ford Ranger truck from Finishline Motors in Colorado Springs.

"We saw it sitting in the lot, we got in it, backed it out, and that was our test drive basically," she said.

Chace needed a truck for her landscaping business and this one appealed to her.

The truck had a sale price of $5,495 and an odometer reading of a little more than 90,000 miles.

The truck isn't new buy any means, but it was affordable.

Shortly after driving off the lot, Chace says the check engine light came on.

She says she also started noticing "popping" noises when turning the wheel.

Chace took the truck to a local mechanic who found a laundry list of problems.

"There's a rear main oil leak, timing gasket covers that need to be replaced and then that's not even looking into what the popping noises are," she said.

Chace provided News 5 with an estimate from a local auto repair shop. It shows more than $3,000 worth of work.

She started to question the truck's condition after experiencing problems.

"I sat down and looked over all the paperwork again and that's when I noticed that in the middle of the paperwork was the Carfax," Chace said.

The vehicle's history report revealed evidence that points to an odometer rollback.

In 2008, the truck had 80,000 miles on it during a state inspection report in Arizona.

5 years later in 2013, the truck only had 57,413 miles on it.

When the dealership sold Chace the truck, she claims the sales associate never told her about the mileage discrepancy.

"They shouldn't be misguiding people on things," Chace said. "They should give a clear case of what's going on from the beginning."

News 5 Investigates also discovered something odd in the paperwork the dealership provided Chace.

For example, she has two different "Bill of Sale" forms for the same vehicle, although neither has the VIN number written on the form.

The owner of Finishline Motors says he was unaware of the two Bill of Sale documents, and points out this may be a training issue with his staff.

The odometer disclosure statements on both forms aren't filled out. On that section, there's a "box" to check if the odometer has been tampered with or destroyed.

However, since Chace's truck is more than 10 years, the dealership legally does not have to disclose any information about the odometer.

The dealership also provided Chace with a separate odometer disclosure statement in which the dealership and Chace signed. The dealership said that the mileage on the car was 90,366 and did not check the box titled "I hereby certify that the odometer reading is not the actual mileage---WARNING ODOMETER DISCREPANCY."

"It was just boom, boom boom, here's all the paperwork," Chace said. "If you think there is something wrong with the odometer, let someone know that before they buy it."

News 5 Investigates discovered other cars sold by Finishline Motors with mileage issues.

For example, this 2001 Buick Century is flagged by Carfax for having a "NAM Title".

A NAM title is issued when an owner (past or current) notifies the DMV of mileage fraud, a broken odometer or that the actual mileage of the vehicle is unknown.

Nowhere on the vehicle's listing or description is the NAM Title/mileage issue reported. It's only listed in the vehicle's Carfax report.

A 2009 Honda Pilot and 2002 Ford Explorer listed by Finishline Motors were also flagged in the Carfax report as having "mileage inconsistencies".

If a vehicle is flagged as having a "mileage inconsistency", Carfax recommends verifying the mileage with the dealer or a qualified mechanic.

The National Highway Traffic Safety Administration estimates that more than 450,000 vehicles are sold each year with tampered odometer readings.

What did Finishline Motors have to say?

Mike Lopez, the owner of Finishline Motors told me via telephone that his staff provide and go over the Carfax report with every customer.

We'd like take him for his word, except for the fact that on the last page of the Carfax report provided for Chace's truck, there's a place for the buyer and seller to sign, acknowledging they reviewed and received a copy of the report.

Both signature lines on the Carfax report were left blank.

However, Finishline Motors does upload Carfax reports online for each of its vehicles. All a customer needs to do is click on the "Show me the Carfax" logo to view the report. Consumer experts recommend doing this research beforehand.

Chace's situation:

While Chace says she is upset about the dealership's sales tactics, she just wants her truck fixed.

After all, she paid nearly $1,700 for a 12-month extended warranty.

As of Friday, Nov. 15, 2019, Chace is still struggling to get the extended warranty department to honor repair work.

Tips to help buyers with the used car buying process:

-Always request maintenance records or the vehicle's history report from the dealership. It's not uncommon for a dealership to provide customers with a Carfax vehicle history report for free, so be sure to ask for it.

-If a dealership is not willing to provide a vehicle history report for free or doesn't have any service records available, it may be worth taking the vehicle to an independent mechanic first before agreeing to buy the car.

-You can always request a Carfax or Autocheck report on your own and compare the documents with the vehicle history report provided by the dealership.

-You can find used cars with low miles on the lot, but be skeptical if you see a really old vehicle (10+ years old) with extremely low miles. In Chace's case, if the 2000 truck she bought really only had 90,000 miles on it, that means the previous owner(s) would have driven less than 5,000 miles each year. Most drivers average 7,5000 to 15,000 miles/year.

-When looking at a Carfax report, look for the key words "mileage inconsistency", "NAM Title" or "potential odometer rollback". These issues should indicate that the buyer may want to do some additional research into the vehicle's history.

Common questions:

What is the benefit of rolling back an odometer?

It is illegal to rollback an odometer, but shaving miles off a car's odometer reading can significantly improve it's value. Penalties can include a civil fine and prison time. To report odometer fraud, click here.

Is it illegal for a dealership to sell a car with a rolled back odometer?

If the dealership is rolling back odometers and then selling cars, then yes, this would be a crime. However, it is NOT a crime for a dealership to simply sell a vehicle with documented odometer issues. The odometer disclosure statement must also be filled out for newer model cars. Again, used vehicles 10 years or older are exempt and therefore, the buyer will need to do his/her research before making a purchase.

Are the problems with the vehicle profiled in your report a direct result of an odometer rollback?

It's impossible to directly link a rolled back odometer with vehicle maintenance repairs. Typically speaking, the older the car is and the more miles you put on it, the more likely you are to have repair issues pop up sooner, rather than later.

Why did we not hear from the owner of Finishline Motors on-camera in this report?

News 5 Investigates sent certified mail seeking comment from Finishline Motors back in October. We did speak with the owner of Finishline Motors via telephone, twice. However, New 5 Investigates does not conduct phone interviews with local businesses for broadcast. We explained to the owner that we'd be happy to meet in person for a recorded, pre-taped interview or accept a written statement. News 5 maintains an open-door policy and at any time, should the owner of Finishline Motors agree to a recorded interview, we'll gladly update our story accordingly. Finishline Motors is a private business and therefore, they are under no requirement to talk with KOAA 5. The last correspondence we had with Finishline was last week. The owner indicated if Chace is not happy with her truck, she can attempt to file a claim with Autocheck's Buyer Protection Program.

If I have a problem with a car dealership, who should I contact?

News 5 Investigates rarely gets involved with civil matters involving car dealerships. Many civil disputes should be dealt with in a court of law. However, we wanted to take the time to educate consumers about odometer rollbacks and disclosure laws so that buyers can make educated decisions. If you suspect a dealership or private seller is engaging in criminal activities, we encourage you to report them to law enforcement or the District Attorney's Office. Once you've contacted those agencies, please don't hesitate to reach out to us.