What Does “Exempt” Mean on a Car Title?

If you come across the term “exempt” on a car’s title, it means that the vehicle is exempt from the federal odometer disclosure requirements.

Historically, vehicles over 10 years old were considered exempt, and sellers were not required to provide a written odometer disclosure statement during the transfer of ownership.

However, this exemption rule has recently changed.

The Old Odometer Disclosure Law

Prior to January 1, 2021, the federal odometer disclosure law required sellers to provide a written statement disclosing the vehicle’s odometer reading during the transfer of ownership for vehicles up to 10 years old.

This law aimed to combat odometer fraud, where unscrupulous sellers would roll back the odometer to misrepresent a vehicle’s actual mileage and inflate its value.

For vehicles older than 10 years, sellers were not required to provide an odometer disclosure statement, as these vehicles were considered exempt from the law.[4]

The New Odometer Disclosure Law

Effective January 1, 2021, the National Highway Traffic Safety Administration (NHTSA) implemented a new rule that extends the odometer disclosure requirement from 10 years to 20 years for vehicles starting with the 2011 model year.

Under the new rule, vehicles from the 2011 model year and newer will require an odometer disclosure statement during transfers of ownership for the first 20 years of their life.

For example, a 2011 model year vehicle will not be exempt from odometer disclosure until 2031.

This change was implemented to address the increasing age of vehicles on the road and the rise in odometer fraud cases involving older vehicles.