Bought a vehicle from a dealer couple of months ago only to have my insurance refusing to insure it due to fraudulent odometer reading. I ran my own history report and sure enough, it was rolled back 150k miles.

In the US under Federal odometer law, 49 U.S.C. Chapter 327 (Public Law 103-272), prohibits the disconnection, resetting, or alteration of a motor vehicle's odometer with intent to change the number of miles indicated thereon. The law requires that a written disclosure of the mileage registered on an odometer be provided by the seller to the purchaser on the title to the vehicle when the ownership of a vehicle is transferred. If the odometer mileage is incorrect, the law requires a statement to that effect to be furnished on the title to the buyer.

After filing a police report, I went back to the dealer and the owner explains to me when I purchased the vehicle, his "friend" used his dealer plates...What? Now I know something fishy is going on for sure. He tells me he'll take the car back and if it sells in two weeks, he will give me full amount if it doesn't sell in two weeks, he'll give me 90% of what I paid.

He put this in writing and I read over what he typed up and I called a notary so at least we had a witness and it was documented. We both signed the paper and I took pictures of the vehicle and left it there.

Is the agreement made by the seller binding?

This is a refund agreement between Buyer (me) and seller (Dealer) on XXX vehicle on 06-24 (purchase date). The car has been returned to the lot in the same condition sold. A refund of is to be given on or before 08-21. All previous agreement between buyer and seller is considered null and void. Buyer and seller are in mutual agreement"


Dealer has honored our signed agreement. I was told car has been sold but without proof of the sale price, I received the $7,000 that was originally guaranteed after two weeks. Whether the odometer has been changed to show correct mileage I cannot say, I was never listed as the owner or did I sign the car title to my name.

  • I'm curious - is he fixing the odometer before he sells it? – George White Aug 12 '20 at 17:53
  • From what he's told me, yes. Since our original deal is void (per the agreement), can I be held liable if a third-party purchased the vehicle? – Noah Aug 13 '20 at 13:53

Is the agreement made by the seller binding?

Yes. You "secured" reimbursement of 90% of what you paid and de facto waived your entitlement to the remaining 10%. Prior to that signing the agreement, you were entitled to be fully reimbursed regardless of how long it takes for the counterparty to sell the car to someone else.

Depending on the exact terms of the agreement, the counterparty might have the meritorious argument that your waiver is in exchange for a "timely" (i.e., two week) reimbursement of at least 90% of your payment.

  • Great! Yes, date of two-weeks after the agreement was put in writing as well. I'm expecting the 90% as there would be no way of me knowing if/when the car was sold.... – Noah Aug 12 '20 at 14:22
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    @Noah I'm glad the terms of the agreement satisfy you, which --at the end of the day-- is what matters. My point is that there was no need for you as misled buyer to waive 10% of your payment, given that the defect was seller's fault. – Iñaki Viggers Aug 12 '20 at 14:31
  • True, but pursuing I felt a legal fight would end up costing me more in the long run. My knowledge of law is very limit in scope was well...Great answer by the way! – Noah Aug 12 '20 at 14:49
  • @Noah Before the agreement you might have taken him to small claims court for 100% of your money regardless of him ever selling it. Now you might have put yourself in a worse position if he doesn't pay you. You might be taking him to small claims court and have the judge decide he doesn't own you anything if he never sells it or nothing until he does sell it. – George White Aug 12 '20 at 17:58
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    @GeorgeWhite Although very likely, it is not clear that the amounts at issue are within the limit for Small Claims in the OP's jurisdiction (10K USD in Texas). If the seller breaches the terms of the settlement, the OP might rescind the agreement (i.e., void the settlement), and thus regain his entitlement to full reimbursement. The timing of reimbursement does not seem open-ended or contingent on when the car is sold to another client (of course, the exact terms of the agreement matter), whence the judge would be wrong if his ruling imposes that constraint. – Iñaki Viggers Aug 12 '20 at 18:42

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