It could be reported each time the car is serviced or at registration time. Seems to happen in the US like that sometimes.
If people misreport it, it would be caught when they try to sell the vehicle. Eg, if I report 5K per year, but actually do 20K, then if I try to sell it in 5 years time, and it shows 25K on the Registration info, but 100K on the odo, then I'm not buying that car lol
But, of course, they'll go for the "track your car at all times" option. An app that you must operate and sends real time GPS info would be their wet dream. Or they could just take the Maps data you send directly from Apple and Google lol
As an aside, insurance companies would love this too. You were speeding by 3km/h? Your insurance premium has just jumped by 20%.