Mileage verification is crucial for various sectors within the mobility industry, from insurance and auto repair to road usage charging. While OBD2 (On-Board Diagnostics 2nd Generation) dongles are often perceived as a go-to solution for mileage tracking, they present significant drawbacks, especially when compared to modern alternatives like connected car APIs. For businesses aiming to scale mileage verification effectively and responsibly, understanding these limitations is paramount.
The Pitfalls of Relying on OBD2 for Odometer Readings
OBD2 dongles, initially designed for vehicle diagnostics, are being repurposed for mileage tracking. However, their inherent limitations make them a less than ideal solution, particularly for large-scale applications.
Inaccuracy in Mileage Data: Not a True Odometer Reading
A critical misconception is that OBD2 dongles directly access and report your car’s actual odometer reading. In reality, these devices typically estimate mileage. They infer distance traveled based on GPS location, trip start and end points, and speed data. This estimation process introduces inherent inaccuracies. Small errors in GPS tracking or trip detection can accumulate, leading to significant discrepancies in reported mileage over time.
These inaccuracies can have tangible consequences. For auto insurers, imprecise mileage data can skew risk assessments, leading to incorrect premium calculations. For auto repair shops, inaccurate mileage can result in premature or delayed service recommendations. Relying on estimations instead of precise odometer readings undermines the reliability of services dependent on accurate mileage data.
Furthermore, the data comprehensiveness is questionable. Are businesses truly obtaining sufficient and consistent mileage data across their entire customer base using OBD2 dongles? The reliance on the OBD port itself poses limitations. OBD2 ports do not inherently provide direct odometer or location data. Dongles rely on estimations precisely because they are not accessing the direct odometer reading. This dependence on the OBD port also creates compatibility issues, especially with newer electric vehicles (EVs). Many EVs require separate adapters to even interface with OBD2 dongles, adding complexity and cost. For example, Emovis, a road usage charge provider, opted for Smartcar’s API to enroll Tesla Model 3 vehicles into their programs, precisely due to these OBD2 limitations with EVs.
Unreliable Performance and User Inconvenience
Even when an OBD2 dongle is physically compatible with a vehicle, seamless operation is not guaranteed. Some vehicles exhibit adverse reactions to OBD-II devices, including triggering false warning lights or even draining the car battery. These unpredictable issues create frustration for both businesses deploying these devices and the drivers using them.
The user experience also presents significant hurdles. Drivers must wait for the device to be shipped, grapple with installation instructions, and ensure the dongle remains securely connected. A loose connection, a common occurrence from accidental bumps or movement, can disrupt data collection and render the device unreliable.
Imagine a scenario where a policyholder’s bag inadvertently dislodges the OBD2 dongle. The device stops tracking mileage, but the insurer remains unaware. This data gap leads to problems: the insurer might overestimate mileage and place the driver on a more expensive plan, or they might suspend the policy pending manual odometer verification, creating inconvenience and dissatisfaction for the customer.
Software Integration Challenges
OBD2 dongles often operate on isolated platforms that lack seamless integration with existing business systems. This creates extra work for businesses attempting to synthesize mileage data with their core operations. Auto insurers struggle to integrate dongle data with policy management systems. Repair shops face difficulties linking mileage data to service reminder schedules. Road usage charge programs encounter challenges incorporating OBD2 data into their billing infrastructure. Instead of streamlining workflows, OBD2 devices can introduce additional layers of complexity and manual data handling.
Vulnerability to Tampering and Mileage Fraud
Even when properly installed and functioning, OBD2 dongles are susceptible to intentional tampering. A driver wanting to underreport mileage, for instance before a long road trip, could simply unplug the dongle. There is often no immediate notification or foolproof way to detect such tampering. This creates a significant risk of mileage fraud, costing auto insurers billions of dollars annually. It’s estimated that over half of drivers misreport mileage, resulting in up to $29 billion in losses for the insurance industry alone. Mileage fraud also compromises the reliability of services for repair shops and road usage charge programs, distorting maintenance schedules and billing accuracy.
Privacy Concerns and Data Transparency
In an era of heightened privacy awareness, OBD2 dongles raise legitimate concerns among consumers. Recent news highlighting issues with data-driven car insurance have made data privacy a critical consideration for technology users. Many drivers feel uneasy about plugging an unknown device into their car’s diagnostic port, constantly collecting data with limited transparency. Questions arise: What data is being collected? Who has access to it? How is it being used? The lack of explicit data consent and clear communication around data usage erodes user trust.
High Costs and Scalability Issues
OBD2 dongles involve substantial expenses beyond the device itself. Businesses must bear the costs of hardware procurement, shipping to customers, and replacements for lost or damaged devices. Device loss, damage, and the need for replacements add significantly to operational overhead. If a customer cancels a service before the business recovers the initial device cost, it represents a direct financial loss. New dongles can cost $50 to $60 per unit, while even refurbished options still cost around $17. Furthermore, ongoing subscription fees per vehicle and logistical expenses for distribution, fulfillment, and returns accumulate rapidly. Instead of enhancing profitability, OBD2 dongles can become a significant financial burden, especially when compared to software-based solutions that eliminate hardware costs entirely.
Connected Car APIs: A Superior Approach to Odometer Data
Connected car platforms, like Smartcar, offer a compelling alternative, resolving the shortcomings of OBD2 dongles and reducing operational costs for mobility businesses.
Enhanced Accuracy: APIs access the vehicle’s actual odometer reading directly from the car’s computer, not an estimation. This eliminates guesswork, rounding errors, and disputes arising from inaccurate mileage reports. With precise, real-time data, businesses can ensure fair pricing and reliable service delivery.
User-Friendly Experience: Smartcar’s onboarding process is streamlined and intuitive. Customers simply log into their existing car account and grant permission to access specified data points. There’s no waiting for hardware, no complex installation, and no dongles to manage. This ease of use significantly improves customer satisfaction and adoption rates.
Unwavering Reliability: Unlike OBD2 devices, car APIs provide consistent and automated odometer data access. Customers cannot manipulate mileage records by unplugging a device, ensuring data integrity and reducing the risk of fraudulent claims impacting profit margins.
Prioritized Privacy and Consent: Transparency and user control are central to API-based solutions. Smartcar’s permission-based onboarding clearly displays the data being accessed, whether odometer, location, or other vehicle information. Customers retain full control over their data, fostering trust and aligning with growing privacy expectations.
Cost-Effective Scalability: Smartcar provides predictable SaaS pricing that scales with business needs. Businesses eliminate expenses associated with hardware, shipping, replacements, and logistical complexities. Resources are redirected from device management to core business activities, such as product development and customer service enhancement.
In conclusion, while OBD2 dongles might seem like a straightforward way to attempt to Read Odometer From Obd2, their inaccuracies, inconveniences, security vulnerabilities, and costs make them a less effective and scalable solution for mileage verification. Connected car APIs offer a superior alternative, providing accurate, reliable, privacy-respecting, and cost-efficient access to odometer data, empowering mobility businesses to thrive in a data-driven landscape. To explore how Smartcar’s platform can revolutionize your mileage verification processes, we encourage you to request a demo today.
