Odometer Disclosure Statement in Texas: What You Need to Know

Odometer fraud or incorrect disclosures can lead to title problems and even criminal penalties. So, whether you're buying or selling a car, understanding everything about the odometer disclosure statement in Texas can help you protect your investment and avoid breaking the law.

Key Takeaways:

• Under federal law, false reporting of actual mileage is considered odometer fraud.

• For most vehicles, Texas requires odometer disclosure during the title transfer.

• If odometer fraud causes financial harm, buyers can pursue legal action.

• Sellers who document mileage properly reduce their liability after the sale.

What is an Odometer Disclosure Statement?

Both Texas law and the federal Truth in Mileage Act require the vehicle's actual mileage to be indicated in the title certificate when its ownership changes. To comply with these rules, an odometer disclosure statement may be necessary.

Important: You may have read on other websites that you can use the odometer disclosure statement form (VTR-40) for this purpose.

But in 2011, the Texas Department of Motor Vehicles (TxDMV) discontinued this form. Unless a secure dealer reassignment form is allowed, the odometer disclosure must now be stated on the vehicle title.

Why is an Odometer Disclosure Statement Important?

Apart from the vehicle's age and brand, mileage is also one of the biggest factors that affect its price and reliability. Whether intended or not, even a small discrepancy in the mileage disclosure can increase or decrease a car's value.

Since a car's mileage can directly impact its value and expected lifespan, this requirement helps:

• Standardize mileage reporting at the time of vehicle sale or transfer, holding the seller accountable for accurate disclosure.

• Protect car buyers from odometer fraud — tampering with the odometer to make a vehicle appear less used and increase its resale value.

How Odometer Disclosure Helps Buyers

It's only right for you to pay a fair price for the vehicle you're buying. With an accurate odometer disclosure, you can ensure the purchase price reflects the car's true usage. Otherwise, you could unknowingly buy a vehicle with a tampered odometer, which could lead to costly repairs sooner than expected.

Always compare the disclosure statement with maintenance records and vehicle history reports to identify any discrepancies before finalizing the purchase.

How Odometer Disclosure Helps Sellers

If you're on the other end of the transaction, providing an accurate mileage disclosure can help protect you from potential legal disputes in the future. In case the buyer questions the mileage after the sale, you may face liability even for honest mistakes.

Proper odometer disclosure can also help keep the sale or transfer process on schedule.

The good thing for dealers is that they can now indicate the mileage on the back of the title.

Understanding Odometer Brands in Texas

The odometer brand found in vehicle titles indicates the reliability of the disclosed mileage. Note, though, that the brand you'll find in Texas titles may be different from that of the National Motor Vehicle Title Information System (NMVTIS).

Here are some examples:

Vehicle titles with negative odometer brands can reduce resale value. If this is the case with the car you're buying, investigate further before signing the purchase agreement.

When Is an Odometer Disclosure Required in Texas?

Texas law generally requires a mileage disclosure whenever a vehicle changes ownership.

Here are some examples:

• Dealership purchases

• Private vehicle sales

• Lease buyouts

• Trade-ins

Vehicles Exempt From Odometer Disclosure

Some vehicles are not subject to federal mileage reporting rules, including those:

• 20 years or older

• Model year 2010 or older

Note: Even if the car you're selling is exempt from this disclosure, it's smart to document the mileage to help prevent future disputes.

How to Complete the Odometer Disclosure Statement in Texas

Since the Texas DMV discontinued Form VTR-40 in 2011, odometer disclosure must now be completed directly on the vehicle's Certificate of Title.

Where to Find the Odometer Disclosure Section

Texas vehicle titles contain a designated section for odometer disclosure on the back of the title certificate. This is part of the title assignment section, where ownership is transferred from seller to buyer.

Required Information

When completing the odometer disclosure section on the title, you must include:

• Date of transfer

• Vehicle year, make, and model

• Vehicle identification number (VIN)

• Exact odometer reading (no tenths)

• Odometer certification (select whichever is true):

• The odometer reading is the actual mileage

• The mileage stated is in excess of mechanical limits

• The odometer reading is not the actual mileage

• Printed names and signatures of both parties

Note: Always write the mileage exactly as it appears on the odometer. Don't round off the numbers.

Does the Truth in Mileage Act Require Extra Paperwork?

Since Texas integrates the federal requirements directly into the title process, most vehicle sales don't require additional forms or paperwork beyond the standard odometer disclosure.

Common Mistakes That Can Create Legal Risk

To avoid penalties, remember to provide correct information. These are the mistakes that people often make:

• Estimating instead of recording exact mileage

• Forgetting required signatures

• Entering an incorrect VIN

• Altering the title

• Rounding off the odometer reading

• Not checking the appropriate odometer certification box

Mistakes can make the disclosure invalid. Plus, they can prolong the transfer process.

What to Do If You Suspect Odometer Fraud

If you notice warning signs of odometer tampering, you must act quickly to save yourself from a bad purchase.

Here's what you should do:

• Don't complete the purchase yet: If you haven't finalized the sale, hold off until you can verify the mileage via Carfax or AutoCheck.

• Document everything: Take photos of the odometer, title, and any maintenance stickers. Also, save all correspondence with the seller.

• Get a professional inspection: Have a mechanic check for signs of odometer tampering, such as misaligned numbers or ECM data that conflicts with the displayed mileage.

• Look at the service records: Ask the seller for maintenance records that show mileage at each service appointment.

• Check the vehicle history report: Compare the odometer reading with the reported mileage on Carfax or AutoCheck.

• Report suspected fraud: Contact the NHTSA or Texas DMV to report the fraud.

FAQ About Odometer Disclosure Statements

Q: Do I need an odometer disclosure statement in Texas?

A: Yes, most vehicle transfers require one, except for older vehicles considered exempt.

Q: What is the mileage verification form in Texas?

A: The mileage verification form is a document used to officially record mileage when the title cannot accommodate the disclosure section.

Q: How do I obtain an odometer disclosure statement?

A: You can get a VTR-40 form from the Texas DMV.

Q: Can I sue someone for selling me a car with a rolled back odometer?

A: Yes. Since odometer tampering violates both federal and state laws, you can sue the person or dealer who sold you the car. But it's best to ask a lawyer to clarify your options.

Q: Do both buyer and seller have to sign the odometer disclosure in Texas?

A: Yes, both the buyer and seller must sign the odometer disclosure in Texas.

Q: What happens if the title has the wrong mileage?

A: If the title has the wrong mileage, it can get branded as "Not Actual Mileage" and reduce the vehicle's resale value. And if there's odometer tampering, the seller can get penalized for fraud.

Q: Can I transfer a title if I made a mileage mistake?

A: You should immediately contact the Texas DMV to correct the error. Depending on the situation, you may need to submit a corrected title application or other documentation explaining the mistake.

Q: Is odometer disclosure required for gifts or family transfers?

A: Yes. Unless the vehicle is exempt, odometer disclosure is required for all vehicle transfers in Texas, including gifts and family transfers.

Q: What if the odometer was replaced?

A: If the odometer was replaced, you should select "The odometer reading is not the actual mileage" on the title and provide documentation of the replacement.

Don't be a Victim of Odometer Fraud

Incorrect mileage disclosure can significantly affect a vehicle’s value, safety expectations, and long-term reliability. If the disclosed mileage conflicts with the vehicle's history records or the odometer reading doesn't add up, it's worth having a legal counsel review the situation.

Consult a reputable Texas lawyer to help you understand your rights and evaluate potential claims.