Understanding the history of a used car before you buy it is vital, but it can sometimes be difficult to get a full and accurate picture. Some sellers may lie about the condition of a vehicle or simply not remember everything that’s happened to it. This is where a CarFax report comes in.
We always recommend getting a pre-purchase inspection on any used vehicle you are considering purchasing, however at a bare minimum you need to get your hands on the vehicle’s history report.
What is a CarFax report? It’s a simple document that sheds light on the entire history of a given vehicle, starting from the time that it was manufactured. Understanding all of this information can help you to decide whether you want to buy the car, assist in negotiations, and let you understand what to expect from the car in the future.
Let’s take a look at what else you can learn from these important reports.
What is a CarFax Report?
CarFax was founded in 1984 as a method to use data center tools to track and prevent odometer fraud. These days, CarFax maintains a database of over 6 billion vehicles in the United States and Canada.
An individual consumer or dealership can pay a fee to CarFax, along with the VIN for the car in question, and CarFax will present a detailed report about that vehicle.
So what’s on a CarFax report? There’s usually plenty of data to help consumers make an informed purchase decision. The data from CarFax comes from over 100,000 different sources. Much of the data on a CarFax report comes from police departments, since they are the first responders that handle major and minor car accidents. Other sources of data include insurance companies and auto body shops.
What’s on a CarFax Report?
CarFax reports are broken down into several important sections. The section that’s particularly important for private sales is labeled “Title.” This is where the Department of Motor Vehicles’ information is listed.
Ensuring that the owner shown on the title matches the name of the person you’re buying from (if you’re not buying from a dealership, that is) will go far in keeping you out of trouble. This section will also inform you if the car has a salvaged title. It can even tell you if the car has been reported as stolen (run the other direction if it is).
Salvaged titles are not necessarily a lost cause. A salvage title means that the vehicle was in an accident and was declared to be totaled by an insurance company. After it was declared to be totaled, someone else took it upon themselves to repair the vehicle and put it back on the road. Salvaged vehicles might not have anything wrong with them, but you should still be wary of getting into a salvaged vehicle, since there are likely to be a lot of unknown factors.
The next section on the CarFax vehicle history report will simply list the mileage of the vehicle. It’s okay if there are some differences here, but they should be minor. Any major difference in the mileage is a red flag and could indicate odometer fraud. Typically speaking, though, differences in the mileage report only mean that the record hasn’t been updated as further miles were driven.
A CarFax report will also list how many owners the car has had. In an ideal world, you would want to buy a car with as few owners as possible. Generally, this means that the car hasn’t been passed around too frequently. A car with too many owners is a mild red flag, as this can be associated with certain types of fraud. Take note that CarFax does not collect nor report the names and addresses of previous owners.
On top of understanding how many people have owned the car, you’ll also learn whether the vehicle was used commercially, in a lease, or as a ride-sharing vehicle. This information can help you to understand what you’re getting into, since commercially owned vehicles will generally have more miles and may have been treated a bit rougher in the past. A ride-sharing vehicle can have its own problems, too, including a more worn interior and rougher suspension.
On a CarFax vehicle history report, you’ll learn if there are any active recalls that pertain to the vehicle. If you see a major recall affecting the target vehicle, ask whether it’s been addressed. If not, ask for a discount, since you’ll have to deal with the recall.
Most recalls are for a specific component. If a component has been recalled, it means that the car needs to be taken into a dealership for service. If you buy a used car and immediately have to address a recall, it can be a significant inconvenience (which often means it’s a good idea to ask for a discount).
Most importantly, a CarFax vehicle history report will tell you the accident history of the target vehicle. Details about the accident should be provided as well. Understanding whether a vehicle has been in an accident can help you to make your purchase decision. If you do proceed with the purchase, you can use the accident as leverage during the negotiations.
CarFax will let you know whether any car accidents resulted in airbag deployments or severe structural damage. If you see either of these types of damage listed, you should proceed with extreme caution. But even if you see a severe collision listed on a CarFax report, you should ask questions about the accident and ask for documentation about the repairs.
While collisions are certainly the main source of damage to cars, they are not the only one. A CarFax report can also show if there was any significant damage from fire, hail, or floods. Hail damage can be repaired without much issue, but stay away from cars that have been in a fire or a flood. Both of these types of damage can compromise the safety of the vehicle and result in costly repairs down the road, even if the initial damage was already repaired.
What is a “Clean” Report?
You’ll often hear people say that a certain car has a “clean” CarFax report. This means that there was no information found that was concerning.
It’s worth noting that a clean CarFax report doesn’t mean that the vehicle is perfect and worthy of being purchased. Sometimes, information can be misreported or otherwise mishandled so that it doesn’t show up on a CarFax report. For example, this might happen if someone failed to report a fender bender.
Other times, data may not show up because it didn’t come from the right sources. For example, an auto body shop might report that they worked on a car and replaced the rear fender, but if their report didn’t contain any information about the accident that caused the damage in the first place, it may not show up on the CarFax report as an accident.
When Should I Request a Report?
It’s a good idea for anyone that is buying a used car to purchase a CarFax report before they sign on the dotted line. Many car dealerships are happy to provide a copy of the CarFax report for the vehicles that they sell.
You need to do everything you can to make sure that you’re buying a worthy vehicle, not a lemon that’ll break down on you next week. Test drives are one way to do that, and pre-purchase inspections are another way. Consider CarFax reports to be yet another tool in your toolbox when you want to make sure that you’re getting a good deal.
If you see any red flags appear on a CarFax report, it’s up to you to bring it up to the seller. Ask them whether there is a reasonable explanation for the things that came up on the report. You may end up hearing a string of excuses, but in some cases, you may get information that can alleviate your concerns.
Should I Get a CarFax Report?
As of 2021, one CarFax report costs $39.99, with discounts for volume as you increase the number of reports. Considering how much you’re likely to spend on the car, this is a minor expense that’s usually well worth the cost, especially if you end up using the information to negotiate the purchase price for your vehicle.
If you’re working with a used car dealer, ask them to supply a CarFax report for the vehicle that you’re interested in. It’s in their best interests to show that they have confidence in their cars and they usually don’t mind paying the small fee. If they won’t provide you with a report, it might be time to move on to the next dealership.
If you’re working with a private seller, on the other hand, don’t expect them to provide you with a CarFax report — you’ll most likely have to purchase your own as part of your due diligence on the vehicle.
Remember to buy a pre-purchase inspection alongside your CarFax report, which can help you to have all of the information you need to make an informed purchase decision.