A growing number of vehicles are being handed back at the end of a contract hire or personal contract purchase (PCP) agreement having been clocked.
Fleets and individuals eager to avoid excess mileage charges are turning to mileage correction companies to clock the vehicle before they return it.
And the problem is causing so much concern within the industry that the Vehicle Remarketing Association (VRA) is calling for companies that undertake the procedure to be better regulated.
A string of businesses advertise their services online from £50 and, while problems with an odometer may require the use of their services legitimately, many companies are turning to them to avoid end-of-contract charges.
Used car history expert HPI says it has seen the number of used cars showing an ‘inconsistent mileage’ increase by more than 10% since 2007. It identified more than one million clocked cars in 2011 – one in every 20 it checked.
An employee at a major leasing company, who wished to remain anonymous, said: “How prevalent the problem is it’s difficult to say, but we know it is happening and it appears to be a growing issue.
“At the end of 2008/09 there were a lot of brokers doing two-year, 20,000 mile, non-
maintained contracts on higher-value vehicles which looked very attractive from a monthly rental perspective.
“It appears the problem started there with people wanting to avoid end-of-contract excess mileage charges.
“I’ve even heard a guy in my local pub openly admit to clocking the mileage on vans he’s operating every year before the annual service so this clearly isn’t an isolated problem.”
David Tomes, senior investigator at iCompli, told Fleet News he had analysed 16 cars believed to have been leased to an accident management company on a 20,000-mile contract.
They were returned to the leasing company with 18,000 miles on the clock, yet they had travelled at least 100,000 miles and could have been used as private hire cars.
He added: “We are certainly being called on more and more.”
The issue for the leasing industry is that they can lose thousands of pounds when they come to sell the clocked car compared to its written- down value and will incur further costs if they take the driver to court.
In addition, the decision to follow up these issues is treated differently from one police force to another, leaving the finance company or leasing company in most cases to spend their own time and money prosecuting the driver.
“The leasing companies are always considered the ‘baddies’ by Trading Standards as they are the experts, but in reality they are the victims and some people now seem to think that it is an acceptable practice,” said the leasing industry employee.
“However, there is no easy or cost-effective way to check all vehicles at the end of the contract and what is really needed is for mileage correction companies to be properly regulated and licensed.”
Regulation of so-called mileage correction companies would help restrict alterations to a vehicle’s mileage to the few situations where it is legitimate.
The law states that it is the driver’s responsibility to declare the vehicle’s mileage if it has been changed when they sell a car or hand it back to the finance company. If they do not follow this process, they are breaking the law.
However, the process is open to abuse and unless some regulation of clocking companies is introduced this issue is likely to worsen.
“Mileage correction companies should be licensed to operate and then regulated to ensure a vehicle’s mileage change is directly reported to the DVLA,” said John Davies, chairman of the VRA.