Holman Automotive Group and FedEx are accused in a lawsuit of conspiring to sell thousands of diesel fleet delivery vehicles with replaced odometers at inflated prices.
The plaintiffs — five consumers who purchased the vehicles in question and are seeking class-action status — say the companies’ actions have hurt small-business owners, who have significantly overpaid for delivery vehicles that are past their useful life expectancies. The lawsuit was filed June 13 in U.S. District Court in New Jersey.
Typically, courier services such as FedEx and United Parcel Service retire older vehicles. Holman helped FedEx identify and scrap diesel fleet vehicles that had reached the end of their useful lives, around 350,000 miles, according to the lawsuit.
However, the lawsuit states, FedEx beginning in or around 2011 pursued another revenue stream by remarketing the fleet vehicles instead of destroying them. Holman is accused mutually agreeing with FedEx to commit odometer fraud as part of the remarketing enterprise.
“It is Holman policy not to comment on pending litigation. Holman complies with its legal obligations and looks forward to defending the case in court,” said a Holman representative.
Holman, based in Mt. Laurel, N.J., is No. 26 on Automotive News‘ 2023 list of top dealership groups in the U.S. It retailed 23,902 new vehicles and 23,778 used vehicles last year.
NHTSA estimates that more than 450,000 vehicles are sold each year with false odometer readings. Odometer fraud costs American car buyers more than $1 billion annually, the federal agency said.
The plaintiffs seek statutory damages under the federal Odometer Act of at least $10,000 per violation.
“We are aware of the allegations made in the complaint and will vigorously defend the lawsuit,” a FedEx representative told Automotive News.