By Mike Antich
“Clocking” is the illegal process of rolling back an odometer to a mileage lower than the actual miles driven. This crime is most prevalent with late-model vehicles, which have accumulated high mileage in a relatively short period of time, such as typically occurs with fleet vehicles. If you think odometer tampering is a thing of the past, you should think again. From 2007 to 2010, there has been a double-digit increase in odometer tampering, according to a soon-to-be released study conducted by CARFAX.
There are several reasons for the dramatic uptick in odometer tampering. First, the used-vehicle market is red hot, which has increased the profit potential in clocking vehicles. For example, if a clocked vehicle in the past may have generated a $500 profit, it is now bringing in a profit of $1,000-$1,500. Although there are many small-time crooks involved in these scams, there is also a strong organized crime component. The second reason for the increase is a consequence to today’s challenging economy, which is putting financial pressure on many households, especially lessees facing excess mileage penalties for leased vehicles. For instance, if a retail lessee has accumulated 78,000 miles on his or her vehicle at the end of a four-year lease, and the mileage cap or allowance is 50,000, a 10 cents-per-mile charge for each additional mile would amount to a $2,800 excess mileage charge.
Some unscrupulous lessees find it economically tempting to spend $50 to get their odometer “repaired” versus paying the excess mileage penalty. The “repaired” off-lease vehicle is returned to an unsuspecting dealer, who either retails the clocked vehicle or sells it at auction. Not only is this fraud, but it is also a consumer safety issue. Vehicles with rolled-back odometers pose safety risks because certain components, such as timing belts or ball joints, need to be replaced at specific mileage intervals.
Clocking on the Uptick Since 2005
The uptick in odometer fraud is not a recent phenomenon. In a 2009 report, CARFAX research data revealed the number of vehicles with rolled-back odometers increased 57 percent nationwide from 2005-2009. According to a 2002 NHTSA study, more than 450,000 cases of odometer rollbacks were reported annually. However, the total number of odometer tampering incidents (including those not caught) is estimated to be substantially higher.
In particular, odometer tampering continues to be a problem for vehicles on retail leases, especially those leased by self-employed businesspeople and those employed as sales or manufacturer reps. Often, these individuals exceed the annual miles allotted under the lease and face substantial mileage penalties at the end of the lease term. An informal grapevine exists among retail lessees, especially those within specific professions who pass on the names of mechanics agreeable to rolling back an odometer for a price. Rather than assume the financial consequences, some lessees are prone to entertain the idea of clocking an odometer.
Another reason retail lessees may be tempted to risk rolling back an odometer is that it is done infrequently (every four to six years) and in their minds, the prospects of being apprehended are minimal. All too often, these individuals do not view themselves as criminals, but rather as resourceful or wily businesspeople who found a way to “beat the system” and avoid paying an excess mileage penalty.
Rolling Back Digital Odometers
As older analog odometers were replaced by digital odometers, clocking became more sophisticated and difficult to identify. Digital odometers store the mileage in the vehicle’s engine control module (ECM), making it difficult (but not impossible) to electronically manipulate the mileage. Digital speedometers were initially thought to provide a “fire wall” to minimize odometer tampering by making it more difficult to do so. However, this has not proven the case, as the CARFAX data demonstrates. For example, even though mileage is recorded on the ECM, nothing prevents a clocker from purchasing a chip at a wrecking yard from a similar model vehicle with less mileage and substituting it on their vehicle. Tampered digital odometers are even harder to identify than mechanical odometers since there are no visible moving parts. Clockers use the same tools to roll-back mileage, which were designed to legitimately correct the mileage of malfunctioning digital odometers.
For instance, electrical pulses in the car wiring may cause the dashboard data, which is stored internally on an EEPROM (Electrically Erasable Programmable Read Only Memory), to become corrupted due to a vehicle accident. To remedy these types of malfunctions, a tool exists to “correct” the mileage numbers displayed incorrectly. Similar to computer hacking, a con artist can use these same tools to roll back the mileage on a digital odometer.
One clue that a digital odometer has been altered is when the vehicle’s condition doesn’t correspond to the displayed mileage. For instance, if a vehicle has low mileage, are there signs of wear inappropriate for its mileage? If suspicious, check for excessive wear-and-tear of the carpet, arm rests, steering wheel, and pedals. More-than-expected wear could be a sign the vehicle has been driven for more miles than displayed on the odometer. In addition, a detailed history report allows buyers to identify incongruities, which may indicate clocking has occurred.
The fact odometer tampering not only continues, but is increasing should be a wake-up call for all fleet managers, especially when our assets are the targets of clockers. As an industry, we need to assist NHTSA in bringing these clockers to justice.
Let me know what you think.