In December of l987 an automobile manufacturer pleaded no contest to criminal charges of odometer tampering and agreed to pay more than $l6 million in civil damages for cars that were test-driven with their odometers disconnected.

I am not sure...
(A) cars that were test-driven with their odometers disconnected
cars that were test-driven - usually this construction is awkward. Passive construction

(B) cars that it had test-driven with their disconnected odometers
I am not native speaker, but I dont understand the meaning of this. Passive construction

(C) its cars having been test-driven with disconnected odometers
First of all a chose this one, but cars having been test-driven is not really good. Passive construction.

(D) having test-driven cars with their odometers disconnected
short and clear. Passive construction but clear

(E) having cars that were test-driven with disconnected odometers
having cars that were test-driven - is not good. Passive construction

I'll go with D.
For me this is random guess, may be somebody will clarify this situation?

It think it goes like ..

An automobile manufacturer agreed to pay for ... having test-driven cars with their odometers disconnected.

Pay for having cars (civil damage), not for cars themselves.


So D is the answer.

IMO D