You may recall that last year we reported on a lawsuit from a longtime Ferrari salesperson that alleged that Ferrari authorized the use of devices that could roll back the odometers of used Ferraris, dramatically (and illegally) increasing their value. Now, according to a report by the Daily Mail, there’s evidence that Ferrari was aware of what was happening, and approved it.
The memo in question was published in April 2017, and was filed in court earlier this month, which is why it’s now publicly available as part of Robert “Bud” Root’s lawsuit filed in Palm Beach, Florida.
The memo makes reference to Ferrari’s diagnostic tool known as the DEIS Tester, which is used for all sorts of very legitimate servicing needs, but also was capable of resetting the odometer, in some cases all the way back to zero.
The nature of the DEIS tool is such that changes cannot be made independently, without the online authorization of Ferrari corporate. As we said in the original article from exactly one year ago today:
The nature of the Ferrari DEIS Tester itself suggests that any actions undertaken using the DEIS Tester tool was not simply the choice of the local dealership, Ferrari of Palm Beach, because each use of the tool requires online authorization from Ferrari. In other words, this was systemic, not isolated.
The April 2017 memo very clearly describes two new modifications to how the DEIS tester works with the “instrument panel node,” and mentions that a software update on May 15, 2017 would remove the ability for the tester to perform an “NQS ECU reset cycle.”
The memo then goes on to clarify:
“As a result of these two actions, the odometer ‘reset to zero’ functionality is being removed.”
That’s a pretty clear way of saying that Ferrari was aware that odometers could be reset via the use of the DEIS tester tool.
The memo also suggests that Ferrari Workshop Manuals were being edited to remove the paragraphs describing how to reset odometers.
Resetting odometers is, under most circumstances, illegal, and can have a colossal impact on the value of used Ferraris, which are worth significantly more if they have less mileage; in some cases, the value could be around a million dollars more for a car with fewer miles on it.
Ferrari’s effective admission that they knew and allowed odometers to be reset will call into question the value of pretty much every used Ferrari sold that uses a DEIS tester-compatible odometer.
Ferrari technicians and shops were terrified at the very idea of this when I spoke with them last year; Ferrari’s admission is certainly not going to make this situation any better.
We’ve reached out to Ferrari for comment, and will update when and if we get a response.
Ferrari did email a statement to the Daily Mail, where its Director of Communications, Krista Florin, stated that the company did nothing illegal, and the timing of the memo was related to their software update and not any media attention about the lawsuit.
The statement said, in part:
“Resetting an odometer to zero in case of a malfunction of the odometer when the pre-repair mileage is unknown is consistent with the federal odometer law.”
“Ferrari determined that the risks of odometer fraud in the United States from unauthorized use of the DEIS tool outweighed the convenience of this functionality of the tool, and thus, Ferrari has informed its network with a technical bulletin that a software update to eliminate the odometer reset functionality of the DEIS tool was necessary and disabled this functionality.”
The email to the Mail also claimed that the tool would not work for cars that had over 311 miles/500 kilometers.
Even with that in mind, you may want to stop payment on that check for that used LaFerrari you found on Craigslist. In fact, expect the entire used Ferrari market to fall into some kind of chaos very soon.