Yes, you are correct. A fast odometer would actually show better MPG than is true. Actually if the odometer were running too slow, it would make the MPG appear worse.
But he has a good point. People forget that the odometer is a fallible gauge just like anything else. However, to cause a 50%+ variance, you'd think the guy would have noticed the problem on out of town trips. Still, it's worth checking out (and easy enough to do) to rule out the possibility that a bad odometer is throwing his MPG calculations way off.
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