The "twist" of the run: how much Ukrainians lose and whether the fines will be effective

The car research institute outlined the scale of the problem with "twisted" car mileage, analyzed the European experience and proposed a solution. Bill № 4039 will help prevent fraud with odometers. What it provides, how it will work in practice and how it will punish for reducing the mileage in the car — a summary of the expert discussion.

Обговорення законопроекту 4039 щодо запобігання шахрайтсву з одометрами

Скрутки пробігу в авто: скільки грошей втрачають українці та чи можна штрафами розв‘язати цю проблему.❓Які масштаби проблеми “скруток” пробігів?❓Скільки українці втрачають коштів через “скрутки” пробігів?❓Чи справді за “скручений” пробіг можна опинитися у в’язниці?❓Як законопроєкт №4039 проти “скруток” пробігу працюватиме на практиці: кого штрафуватимуть та на скільки?❗️Втручання в показники одометра автомобіля - надзвичайно поширене явище в Україні. Пробіг “скручують” для швидшого та вигіднішого продажу вживаного авто, “накручують” для здешевлення вартості розмитнення, а в результаті українці - кінцеві покупці таких машин - втрачають чималі гроші, і не лише їх. Масштаб проблеми - значно більший, ніж може здаватися. ▶️ Проєкт закону №4039 передбачає запровадження реєстру пробігів транспортних засобів та відповідальність за умисне зменшення показників одометра. Документ викликав чималий інтерес у суспільстві, проте наразі залишається ряд відкритих питань. Відповіді на них дали співавтори законопроєкту, експерти Інституту досліджень автомобільного ринку, під час онлайн-дискусії.

Posted by Інститут досліджень авторинку on Tuesday, May 25, 2021

Mileage "twist" is a deliberate decrease in the odometer of the vehicle. Almost everyone who has bought or sold a used car at least once in their life faces a problem.

THE SCALE OF THE PROBLEM

According to research by European experts, from 10% to 50% of cars in the secondary market of the European Union - with artificially reduced mileage. This share is even higher when it comes to car trade between the member states of the European Community: at least 30% of the total number of resales.

As of today, there are no mechanisms for monitoring the mileage of vehicles at the state level in Ukraine. The first service to check the cars for sale was introduced by the largest car marketplace in our country AUTO.RIA. According to the companyʼs analyst, co-founder of the Research Institute of the car market Ostap Novitsky, the share of cars with detected differences in mileage is an average of 30% of the total volume of cars tested by the resource.

Interesting analytics on the probability of "twisted" mileage depending on the year of manufacture of the car. As you can see, ten-year-old cars are the most "rejuvenating". Although the very facts of "twisting" are found in fact among cars of any age — even one-year-olds.

The records of "twists" recorded recently are "unwound" 600 and much more than a thousand kilometers.

Tetyana Shepelyuk, the head of the "Checked cars on AUTO.RIA" department, said that the mileage declared by the sellers was reconciled with independent electronic databases. These are more than 15 verified official sources, mostly foreign ones. The company also works with cyber police and the Main Service Center of the Ministry of Internal Affairs to eradicate fraud and prevent such cases.

The expert also named the most common "arguments" of sellers who want to justify the unconfirmed mileage of the vehicle:

• Manipulations with the service book — forgery, false records, etc .;
• Acts of work performed by dubious organizations or forged;
• Other dubious documents;
• The desire to give mileage for mileage.

CONSEQUENCES OF THE PROBLEM

The participants of the discussion are sure that the twists and turns of the run are an outright fraud. Cars with high mileage should be cheaper, because they have less residual life and require more expensive maintenance. In the case of "scrolls" — buyers overpay, and therefore — lose money.

The difference in the average market price for the same car, depending on mileage, can range from a few hundred to several thousand dollars, says Ostap Novitsky. Every 100,000 miles of money is a specific amount of money: from $ 500 to $ 1,500. For example, the popular Mercedes-Benz E-Class with a mileage of 500 thousand kilometers — on average cheaper by five thousand dollars than the same with a mileage of 100 thousand; Hyundai Sonata may differ in price by $ 4 thousand, and Renault Traffic — by $ 3 thousand.

In addition, the state loses due to fraud with mileage. For example, "cheating" mileage is a common phenomenon in order to reduce the customs value of cars imported from abroad, to reduce customs clearance and pay less taxes, said Julia Rykovska, director of WEST AUTO HUB and a member of the Board of the Institute of Car Research.

The analysis of customs statistics conducted by the Institute the day before testifies to possible adjustments of mileage to a greater extent, the expert says.

The graph shows that the average age of imported cars has decreased — from 12.8 years in 2019 to 10.6 in 2020. This means that people have started buying more newer cars. Usually, the newer the car — the more expensive it is. However, if you look at the second chart — it is noticeable that the average customs value in 2020 decreased. This indicates two things: a possible mass understatement of customs value, as well as a possible trend of buying cars abroad with high mileage.

" If there are questions about the cost of customs clearance, then you need to change the actual formula for calculating taxes or the approach to determining the customs value, but do not tolerate fraud with mileage, " — said Julia. — Very often, after customs clearance, the mileage is twisted back to a lower mark than it really was to sell the car more profitably. This situation creates corruption, leads to budget losses, distorts customs statistics, and reduces overall confidence in the secondary car market. As a result, players in this market are already losing. In such conditions, it is difficult to conduct an honest, civilized car business. "

POSSIBLE SOLUTIONS

During the development of proposals to improve Ukrainian legislation, experts from the Institute of Car Research analyzed the experience of the European Union. One of the directives of the European Union stipulates that in cases of detection of manipulations with the odometer in order to reduce or alter the records of vehicle mileage, such manipulations should be punished by effective, proportionate, dissuasive and non-discriminatory sanctions.

Stanislav Buchatsky, head of the Research Institute of the car market, spoke about how EU member states implement the provisions of this directive in practice.

POLAND

There is a criminal liability for changing the odometer or interfering with the mechanism of its correctness: from 3 months to 5 years in prison.

At the same time, it is possible to check the history of the car for free online on the service Historia Pojazdu.

NETHERLANDS

The penalty for a "twist" of mileage — a fine of 10,000 euros, or up to 1 year in prison.

The Nationale AutoPas system works — a service to check the current mileage in the car.

BELGIUM

If the odometer decreases, you can end up in prison for one year.

The Car-Pass system works — a unique car key that gives access to the history of the vehicle. The mileage of the vehicle in this system must be recorded not only by public authorities, but also by private service stations, tire fitters and other companies that provide automotive services worth more than 150 euros.

"The Belgian experience can be considered the most successful in the European Union, as from 60,000" twists "during the year, the number of facts revealed fell sharply to almost zero after the introduction of this system. This clearly shows that it is not so much the fines as the effective control system that help to reduce the facts of intentional reduction of mileage, ” Stanislav stressed.

DECISION — BILL № 4039

The Verkhovna Rada registered the Draft Law on Amendments to the Code of Administrative Offenses of Ukraine and the Law of Ukraine "On Road Traffic" to prevent fraud with odometers of vehicles № 4039. The document was developed in collaboration with experts from the Institute of Car Market Research to prevent " mileage.

The main purpose of the bill is not to punish, but to prevent fraudulent actions with odometers in the car market of Ukraine. Its main provisions are very simple:

1. Mandatory regular recording of car mileage in the Unified State Register of Vehicles;
2. Responsibility for the operation of vehicles with lower odometer readings than recorded in the register;
3. Liability for illegal reduction of vehicle odometer readings.

Will record and compare mileage during:

• The first car registration in Ukraine;
• Passing technical inspection;
• Car re-registration in the service center of the Ministry of Internal Affairs.

A field in the unified state register of vehicles has already been provided to record the mileage, explained Oleksandr Onyschuk, executive director of the Car Research Institute. Itʼs just that today this field in most cases remains blank.

The bill provides for administrative liability for intentional reduction of mileage. Compared to the experience of EU countries, the proposed approach is more loyal, because it is only about economic sanctions, not criminal liability, said Alexander.

Possible fines for "twisted" mileage:

• for operation of a car with a non-working odometer (UAH 3,400);
• operation of a car with a twisted mileage (UAH 8,500);
• the first registration of a car from abroad with a twisted mileage (UAH 17,000);
• illegal reduction of odometer readings (34,000);

FREQUENTLY ASKED QUESTIONS

• Replaced the odometer? "Zero" counter?

Notify the service center of the Ministry of Internal Affairs, and there will be no fine.

• I now have a car with a twisted mileage. Am I being fined?

No, the law will not work "retrospectively".

• Will the police check the mileage during the stop?

No, this is not provided by the bill.

• How to check in the future whether the mileage is twisted in the car that I use or buy?

Mileage data will be recorded in the Unified State Register of Vehicles.

POSSIBLE CONSEQUENCES OF THE ADOPTION OF THE BILL № 4039

• the number of inspected cars will increase;
• fraud during sales and imports will be reduced;
• Ukrainians will not lose money ;
• the general trust in the car market will increase;
• the state will receive additional revenues to the budget.

At the end of the discussion, the participants of the discussion agreed to send a letter of appeal in support of the discussed legislative initiative.