Four Sydney car yards accused of winding back odometers on used cars have been raided by police.

A Sydney car dealer accused of winding back the odometer on imported used vehicles has been shut down and three more are facing sanctions.

Dream Car City had its trading immediately suspended by Fair Trading NSW officers who were waiting for the company's director when he arrived at the Concord business on Tuesday morning.

Officers simultaneously raided two other Concord businesses, Prestige Auto Centre and Edward Lees Imports, which describes itself as Australia's number one import dealer.

Master Cars at Blacktown was also raided.

Those three businesses are accused of digitally altering odometers on at least 100 vehicles imported from Japan and will have to show Fair Trading NSW why they should not be disciplined.

Fair Trading NSW have been investigating the dealers for two years, following a tip-off from a consumer who was concerned about their vehicle's wear and tear, and information from police.

The four dealers are not believed to be connected.

Three licensed repairers, linked to the dealerships, were also investigated.

Officers seized evidence including de-registration certificates from Japan's Bureau of Transportation which will be used to compare the odometer readings in Japan with those on the vehicles now.

Fair Trading Commissioner Rod Stowe said the data may uncover more affected cars.

"Our belief is the cars were received in NSW and the tampering has been undertaken by the dealers and the motor vehicle repairers that we've identified today," Mr Stowe said.

One of the dealers claimed the cars were tampered with in Japan before the cars were imported to Australia.

While cars suspected of being tampered with have been sold on, his customers have been notified of the dealer's suspicions through Fair Trading NSW.

The dealer suggested Australia should follow New Zealand's lead in introducing legislation prohibiting the importation of vehicles that have had their odometers tampered with.

A number of people are expected to be prosecuted by NSW Police and Fair Trading NSW in connection with the ongoing investigation.

Fines up to $20,000 are in place for odometer tampering, while those who knowingly sell or attempt to sell a tampered vehicle face up to 10 years jail.

A large number of Australia's used cars come from Japan where vehicles must be de-registered once they reach a certain age.

De-registration documents, which detail a car's previous use, are not readily available to used car buyers in Australia.