Suing a Dealership for Odometer Fraud on a Used Car

Attorney Answer

Yes — this is one of the stronger consumer claims there is, because federal law provides for treble damages or a $10,000 minimum, whichever is greater, plus mandatory attorney's fees.

Federal law requires the transferor of a vehicle to disclose the cumulative mileage registered on the odometer, or to state that the actual mileage is unknown, and prohibits giving a false statement in making that disclosure (49 U.S.C. § 32705). If the sale paperwork represented the mileage as accurate despite a documented tampering history, that is the violation.

The remedy is what makes this worth pursuing. A person who violates the odometer chapter with intent to defraud is liable for three times actual damages or $10,000, whichever is greater, and the court is required to award costs and a reasonable attorney's fee (49 U.S.C. § 32710). That mandatory fee award is why attorneys take these cases without hourly billing from the client. Expect the dealership to answer that it did not know. That is not automatically a defense: in Shaghoian v. Aghajani, 228 F. Supp. 2d 1107 (C.D. Cal. 2002), a federal district court held that a dealer-transferor who lacks actual knowledge that a mileage disclosure is false "only because he displays a reckless disregard for the truth" can still be found to have acted with the intent to defraud that § 32710 requires. That ruling denied summary judgment to both sides — it treats intent as a triable question of fact rather than establishing dealer liability — and as a federal district court decision it is persuasive authority only, not binding on California courts.

California also separately prohibits disconnecting, turning back, advancing, or resetting an odometer with intent to alter the mileage indicated (Cal. Veh. Code § 28051). Note the difference: the state statute requires intent to alter the reading, not intent to defraud, which is a lower bar and can make it a useful companion claim.

There is a short deadline on the federal claim. The federal odometer action must be brought within two years after the claim accrues — noticeably shorter than the periods that apply to many state law claims. When that clock started running in your case depends on the facts, including when the tampering was or should have been discovered. Do not calculate this yourself; have a California attorney confirm your specific timeline and file well inside it.

What you can do

1. Save the full vehicle history report showing the "Not Actual Mileage" flag, along with the purchase paperwork and title showing the mileage as represented. 2. Collect the advertising and listing materials from the dealership that also stated the mileage. 3. Contact a California consumer protection or auto fraud attorney promptly given the two-year federal window; many handle these on contingency because of the fee-shifting provision. 4. File complaints with the DMV's Investigations Division and the Bureau of Automotive Repair, which can generate pressure independent of a lawsuit. 5. Avoid trading in, selling, or making changes to the vehicle before you have spoken with an attorney, since the car itself is evidence.