Germany’s €8 billion mileage fraud bill

November 23, 2016

Campaigners in Germany are calling for new measures to prevent mileage fraud, which they say is undermining confidence in the used car market.

About one-third of all used cars in Germany have their value falsely inflated by winding back the vehicle odometer, the industry claims.

Mileage is a critical factor in establishing a car’s value, along with its age and condition. Extensive fraud means that buyers will become increasingly suspicious of odometer readings. This makes them more likely to offer less than a vehicle’s market value because of the risk of fraud. This will eventually force down used car values overall, even for vehicles that have not been tampered with.

This view is supported by a new whitepaper on disruptive trends in remarketing produced by Autovista Intelligence. It warns that without good quality information on a vehicle’s history, it is impossible to distinguish between a good and bad purchase.

If buyers cannot distinguish between a top quality product and an inferior one then they will be reluctant to pay a premium for quality.

Wolfgang Köhler, a spokesman for the Automobilclub von Deutschland (AvD), said: ‘Buyers need to be sure when they are buying a used vehicle that the mileage is accurate. This is one of the key influences on the value of a used car.

‘About 30% of used cars have been tampered with and it is a really big problem because of the damage it is causing.’

The AvD wants vehicle mileage to be collected automatically and shared, both nationally and internationally, so that every vehicle has a full odometer history that prevents scams.

In Germany, this would require mileage to be collected during official vehicle safety checks every two years. Checks would also be made when cars were taken into the garage for servicing or repair.

Yesterday, lawmakers in Lower Saxony discussed a Car Pass programme to tackle fraud by formalising the collection of odometer data from cars. A Car Pass would be mandated whenever a used car is sold to prove its mileage is genuine. A similar system adopted in Belgium virtually eliminated the problem.

German officials also called for manufacturers to make it much more technically difficult to change a vehicle’s mileage, so that it becomes too costly and wipes out any profit gained from winding back the odometer.

Last week, the Car Remarketing Association of Europe (CARA) identified fraud as one of its key priorities for 2017.

Read our whitepaper on disruptive trends in remarketing…






Also in News & Insights

UPDATE: News & Insights have moved to the Autovista Group website

March 31, 2017

Our regular automotive industry News & Insights are no longer being published on the Autovista Group Market Reports website.

Instead, you can now find the latest updates at our central Autovista Group website, home to our pan-European brands including Autovista, Eurotax, Glass's and Schwacke.

To stay up to date with rapidly changing market trends, we recommend signing up to our free Autovista Group Daily Brief which delivers our daily news stories directly to your inbox.

You can still find our in depth market reports here on the Autovista Group Market Reports site. Keep checking back as we have an exciting new report due to be launched shortly!

PSA to boost UK presence in the event of a ‘hard Brexit'

March 08, 2017

UK sales flat despite upcoming road tax hike, diesel demand plummets

March 08, 2017

UK new car registrations fell annually by 0.3% in February to 83,115 units according to the SMMT, driven down by weaker demand from individuals and companies. More noticeable, however, was the 9.2% drop in demand for diesels compared to February 2016, a steeper drop than the decline in Germany...