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The Odometer Statement You Sign When You Buy Your Leased Car

Federal odometer law applies when a leased car changes hands. Here is what the leasing company must tell you, what you must disclose, and what to check before signing.

By Joe, Managing Director, Champion Auto Finance

When you buy out a lease, the leasing company transfers ownership of the car to you. Federal odometer rules, found in Part 580 of the federal motor-vehicle regulations, are designed to prevent odometer fraud, and they apply to leased vehicles at that moment. The result is a mileage statement you are asked to complete and sign.

It is easy to treat this as another form in a stack. It is worth a minute of attention, because the statement is a legal certification about the number on the dashboard, and the regulation says false information can lead to fines or imprisonment. This article explains the rule in plain English. It is general information, not legal advice, and state rules can add requirements.

Step one: the leasing company notifies you

Before the leasing company signs any document transferring ownership, section 580.7 says it must tell you, in writing or electronically, that you have to give a mileage disclosure. That notice must cite the federal law and warn that failing to disclose, or giving false information, can bring fines or imprisonment. It may also mention your state's law. If the notice is electronic, the information must appear before or at the time you e-sign.

Step two: you complete the statement

When ownership transfers, you give the leasing company a signed statement, on paper or electronically. The regulation lists what it must contain:

• Your printed name, and the name of the person making the disclosure.
• The odometer reading, in whole miles, without tenths.
• The date of the statement.
• Your current address and the leasing company's name and address.
• The vehicle's make, model, year, body type and vehicle identification number (VIN).
• The date the leasing company gave you the notice, and the date it received your completed statement.
• The leasing company's signature.

The statement acknowledges that you received the federal notice and any state notice that applies.

The three certifications

You must pick one of three statements about the reading:

1. The reading reflects the actual mileage, to the best of your knowledge.
2. The reading exceeds the odometer's mechanical limit.
3. The reading is not the actual mileage, and the difference is more than normal calibration error would explain, so it should not be relied on.

For nearly every buyout the first statement applies. If your odometer or instrument cluster was ever replaced or repaired, mention it to the leasing company before you sign rather than guessing.

What if the car never goes back to the leasing company?

If the leasing company transfers the car to you without taking possession of it, the regulation says it may record the mileage you disclosed on the title, unless it has reason to believe the reading is wrong. That is why the number you give needs to match the odometer on the day you sign.

A short checklist before you sign

• Read the odometer yourself and compare it with the number on the form.
• Check the VIN on the form against the VIN on your registration or the windshield.
• Note your last service or inspection mileage, which helps if the reading looks off.
• Keep a copy of the signed statement with your buyout papers.
• Ask the leasing company if anything on the form is unclear.

The regulation also requires the leasing company to keep the statement for five years after it transfers ownership, which is a good reason to keep your own copy too.

Common questions

Is an odometer statement required when I buy out my lease?

Federal odometer rules apply when a leased vehicle's ownership is transferred, and the leasing company must notify you and obtain your signed mileage statement. State rules may add requirements.

What if my odometer is broken or was replaced?

Tell the leasing company before you sign. The form lets you certify that the reading is not the actual mileage, so do not guess.

How long does the leasing company keep the statement?

The federal regulation requires lessors to keep it for five years after they transfer ownership of the vehicle.

Related

• What Federal Law Says Your Car Lease Must Tell You About Buying It

Sources

• 49 CFR 580.7, Disclosure of odometer information for leased motor vehicles
• 49 CFR Part 580, Odometer Disclosure Requirements (eCFR)

More from the blog

• Add-Ons Offered With a Lease Buyout Loan: GAP, Service Contracts and Saying No
• Wear-and-Tear Charges vs. Buying Your Lease: What the Inspection Decides
• What Federal Law Says Your Car Lease Must Tell You About Buying It

Champion Auto Finance is a NJ DOBI-licensed financing partner, not a lender, coordinating lease buyout financing for drivers nationwide. Approvals and terms are subject to lender underwriting. Nothing on this site or in these episodes is legal, tax or financial advice.