Interpretation ID: nht89-1.43

TYPE: INTERPRETATION-NHTSA

DATE: 03/20/89

FROM: ERIKA Z. JONES -- CHIEF COUNSEL NHTSA

TO: THOMAS E. GUNTON -- CORPORATE COUNSEL MCCULLAGH LEASING, INC.

TITLE: NONE

ATTACHMT: LETTER DATED 12/01/88 FROM THOMAS E. GUNTON TO JUDITH KALETA RE ODOMETER DISCLOSURE REQUIREMENTS, OCC 2865

TEXT: Dear Mr. Gunton:

This is in response to your letter of December 1, 1988, concerning the Federal odometer disclosure requirements. You asked whether the Federal requirements apply to large scale sales of motor vehicles between leasing companies or whether a lease company that is transferring many vehicles to another lease company is exempt from these requirements.

Section 408 of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. @ 1988, requires the Secretary of Transportation to prescribe rules and regulations requiring any transferor to give a written disclosure (1) of the cumulative mileage registere d on the odometer or (2) that the actual mileage is unknown, if the odometer reading is known to be different from the number of miles that the vehicle has actually travelled. This authority was delegated to NHTSA. NHTSA has created exemptions for tran sferors of vehicles for which the odometer is not relied upon as an indicator of vehicle mileage or condition. Currently, pursuant to 49 C.F.R. @ 580.5, transferors of the following vehicles are not required to issue an odometer disclosure statement:

(1) a vehicle with a gross vehicle weight rating of more than 16,000 pounds;

(2) a vehicle that is not self-propelled;

(3) a vehicle that is twenty-five years old or older;

(4) a vehicle sold directly by the manufacturer to any agency of the United States in conformity with contractual specifications; and

(5) a new vehicle prior to its first transfer for purposes other than resale.

Beginning April 29, 1989, a transferor of a vehicle that is ten years old or older need not disclose the mileage to the transferee in connection with the transfer of ownership. 53 FR 29464 (1988).

NHTSA has not created any other exemptions. Therefore, a transferor of vehicles must issue an individual odometer disclosure statement for each of the vehicles being transferred, regardless of the number of vehicles transferred in a single transaction. It is our opinion that this requirement may be met with a single odometer disclosure statement that could be used to disclose the mileage of several vehicles, as long as all of the information required by our regulations appears for each vehicle on the combined statement. While the parties to the transfer of numerous vehicles might not rely on the odometer reading of each vehicle to determine the total value of the transaction, subsequent purchasers are entitled to rely on the odometer reading as an a ccurate reflection of the mileage travelled by the vehicle in order to determine the condition and value of the vehicle. The odometer disclosure statement given from one leasing company to the other will be retained by both the transferor and transferee . The purchasing company will rely on this statement when issuing an odometer disclosure statement to a subsequent buyer. Furthermore, the statement between the two leasing companies will become part of the "paper trail", the evidence of mileage that ma y be checked by subsequent purchasers and law enforcement officials.

I hope you find this information helpful. If you have any questions, do not hesitate to contact us again.

Sincerely,