Odometers are often key in determining the value of used cars. They indicate how many miles the car has traveled—and help potential buyers determine how many miles more the vehicle might last.

Different odometer designations may be found on the back of a used vehicle’s title, one of which is “not actual mileage.” The Not Actual Mileage designation—sometimes written as (N) or NAM—indicates that the vehicle’s exact mileage is unknown and the odometer reading may be misrepresenting its true mileage.

How this happens: There are a couple of circumstances that could result in an odometer discrepancy:

The odometer was formerly replaced and now incorrectly displays the vehicle’s mileage

The odometer broke, maxed out, or returned to zero, and remained broken for a period of time (or remains broken)

The odometer was intentionally rolled back to hide the vehicle’s high mileage (if proven, this is a violation of federal law)

The mileage was recorded incorrectly on the odometer disclosure statement due to human error

Important note: If you notice a “not actual mileage” brand on a used vehicle’s title, you should know that it’s a permanent brand that cannot be changed and it could have consequences for the vehicle’s resale value.

“True mileage unknown” means the same thing as “not actual mileage”

The designation of “true mileage unknown” (sometimes abbreviated as TMU) is essentially just a nicer way of saying that the vehicle’s mileage history is inaccurate. Both terms describe vehicles where the mileage is misrepresented or when there’s evidence that a vehicle’s odometer was tampered with or replaced.

How a not actual mileage title affects the value of a used car

In most cases, a “not actual mileage” brand reduces the value of a vehicle, but there are still ways you can determine whether you should make the purchase.

Doing your due diligence on a used vehicle by requesting a

CARFAX report

and having a pre-purchase inspection done can help you make a more accurate estimate of a vehicle’s actual miles—and better determine its true value.

MORE: 7 things to look for when buying a used car

Risks and benefits of buying a car with a TMU or NAM title

The big question: Should you buy a vehicle with a title that says “True Miles Unknown” or “Not Actual Mileage?” As with any used vehicle purchase, it’s a bit of a gamble, so it’s important to mitigate the risks associated with buying a vehicle with incorrect mileage.

Here are a few steps to take before buying a vehicle with a “Not Actual Mileage” brand:

Try to find the origin of the issue. Get a vehicle history report. Chances are, you just might notice an odometer recording that drastically mismatches the rest of the vehicle’s record, making it easier for you to estimate where things went wrong (and get an idea of the vehicle’s true mileage).

Have a pre-purchase inspection done. This could help you identify any possible problems or necessary maintenance that its odometer reading may otherwise not reveal. Because vehicles with “not actual mileage” or “true mileage unknown” titles are undervalued, you could get a great deal on a valuable car.

Take your time: Not every “not actual mileage” vehicle is a winner—which is why it’s important to do your research before making any purchases. If you wind up purchasing a vehicle that you believe was misrepresented by the seller, you’ll have a tough time proving your case in court, since most states require solid proof of damage.

Even if you’re comfortable with the vehicle as it is, you could face other challenges when it comes to

finding insurance

or financing the vehicle. Branded titles often come with associated risks that cause insurance companies to raise their rates, and loan providers may be reluctant to offer financing on vehicles that lack a clean title.

Another con? If you ever decide to resell the vehicle in the future, you’ll also face a lower resale value as a result of the odometer fraud—and you may even have difficulties finding a buyer.

Key Takeaway: You may be able to get a not actual mileage vehicle for a cheap price, but the vehicle could be seen as risky to finance or insure.

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