Mileage fraud - A huge problem in Europe. Time do deal with it !

1. Mileage fraud - A huge problem in Europe.Time do deal with it !

2. Content • A few facts about mileage fraud • Consequences of mileage fraud • How big is the problem?

3. A few facts about mileage fraud • It is technically very easy to roll back an odometer • Devices are freely sold on the internet • Plenty of companies are offering their services to “correct” the mileage reading. • “mileage correction services” 348.000 hits on Google • Applicable to almost all car models • Access via OBD interface • Takes only a few minutes

4. lower mileage

6. A few facts about mileage fraud (ii) • Mileage fraud is very difficult to recognize for consumers J. Grill - Director Consumer Protection & Public Policy, ADAC (D) “Today, there is no reliable method for discovering odometer tampering.” (Brussels, Conference CARS2010 – 18.11.2010) • The probability of being caught is therefore very low • The profits from mileage fraud are huge

7. Consequences of mileage fraud • It costs consumers a lot of money, as they: • Overpay when buying a car • Face higher maintenance & repair costs (costs of ownership) • Also results in important costs for other stakeholders: • Honest car dealers • Insurance companies • Leasing companies • Public finances (evading import taxes) • Negative impact on road safety • Creates unfair competition and distorts the used car business

8. How big is the problem? • Belgium (source: CAR-PASS) • Before introduction of CAR-PASS: at least 60.000 cases a year (8.6%) • Exported cars to France: 43,3% were manipulated (2008) • The Netherlands (source: Nationale Autopas) • 5% of all registered cars might be manipulated (down from 20% in 1991) • Germany (source : Munich police) • At least 30% of all second-hand cars sold in Germany have a manipulated mileage reading • The total damage amounts to € 5,4 billion a year (2011) • United Kingdom (source: Office of Fair Trading) • 5-12.5% have a mileage discrepancy (2010) • € 750 million a year

9. How big is the problem? (ii) • According to the study “The economic impact of mileage fraud and a cost benefit analysis of the Car-Pass system” carried out by CRM used car management (2010): • 30% of all imported used cars are manipulated (average reduction 60K) • 5-12% in case of domestic transactions (average reduction 30K) • Total cost of mileage fraud in Benelux, F and D: €1,4 - €2,8 billion/ year • 2/3th: increased depreciation • 1/3th: increased cost of ownership • Extrapolation to the entire EU: €5,6 – €9,6 billion/year • Consumer survey

10. Headlines of the consumer survey • 4823 respondents in 5 countries • The mileage of the car is the 3rd most important criterion when buying a used car (mentioned by 44% of the people) • 13% have little trust in the mileage reading when buying a car < 4y • 39% have little trust in the mileage reading when buying a car > 4y • 5% has ever bought a car with a clocked mileage • 61% of the interviewed consumers support the idea of a Car-Pass-like central database (86% in B) • Full report is available: http://www.car-pass.be/docs/CAR-PASS-study-final-report.pdf

11. Conclusions • Mileage fraud costs consumers in the EU billions of euro's per year • It’s distorting the used car business • It has also negative side effects for other stakeholders in the automotive business, public finances and road safety • Consumers in general are well aware of the problem • …but, today there are very little obstacles for mileage fraud

12. More info: Michel Peelman CEO CAR-PASS asbl +32 27 73 50 59 mp@car-pass.be www.car-pass.be Boulevard de la Woluwe 46/2 BE- 1200 Brussels BELGIUM