Can You Trust Carfax? (Plus 4 Other Ways to Avoid Buying a Clunker)

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Show me the Carfax.

Remember when those commercials first hit the airwaves? It was only a matter of time before dealerships everywhere started touting a Carfax report with every used car.

The reports promised an almost crystal ball view into the history of a vehicle. Sellers could no longer hide accidents, major repairs or faulty odometers. It’s all in the Carfax!

Or is it?

Money Talks News personal finance expert Stacy Johnson takes a closer look at Carfax, plus what else you can do to protect yourself when buying a used vehicle. Watch the video and then keep reading below for more details.

How trustworthy is Carfax?

Certainly, we don’t want to imply Carfax is a bad thing. However, we do think used-car buyers need to realize a Carfax report is not the word of God. It can be a useful tool, but it has its limitations.

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Carfax reports glean data from a number of sources. Those include these, among others:

  • U.S. and Canadian motor vehicle agencies.
  • Collision repair and service facilities.
  • Insurance companies.
  • Auto auctions, salvage auctions and auto recyclers.
  • Fire and law enforcement agencies.
  • Manufacturers, dealers and import/export companies.

This data is then compiled into reports that indicate title transfers, odometer readings, manufacturer recalls and whether the vehicle has been reported stolen. In theory, it should also say whether a vehicle has been in an accident or needed significant repairs.

However, this last point is where the Carfax report may fall short. Carfax might not know about the time the car went into the ditch or backed into a tree. It won’t be aware of repairs made by someone at home or at a shop that doesn’t report to them.

They’ll also tell you some practically totaled cars have clean titles, which they have, and the accident may not even appear on the report. It’s not because they’re dishonest. It’s because they probably don’t know. We’ll let Consumer Reports explain how that happens:

We found that the reports were most likely to be incorrect for vehicles that had serious damage but for various reasons were not declared a total loss.

“Salvage,” or similar branding on the vehicle title, is required by many states for vehicles with extensive damage. Wrecks can maintain clean titles if the vehicle doesn’t have collision insurance, is self-insured as with many rental and fleet vehicles, or has damage falling below the “total loss” threshold, which can vary by state.

Clean-title wrecks, especially those with clear history reports, are popular at auctions because buyers can repair the vehicles and then resell them to unsuspecting consumers.

4 ways to protect yourself

If Carfax isn’t 100 percent reliable, how can you protect yourself when buying a used car?

We suggest the following:

1. Check multiple services. Carfax isn’t the only game in town. Go ahead and use their report but double-check the findings with other reports that may get data from different sources. Could it cost you a little money? Sure, but it beats dropping $15,000 on an unsafe vehicle.

Here are a couple of other sites that provide vehicle reports and vehicle identification number, or VIN, checks.

2. Get it inspected. Multiple VIN checks may improve your chances of catching a vehicle problem, but, again, they’re no guarantee. Have a trusted mechanic test-drive and check a used vehicle before purchase to rule out any obvious problems.

3. Get it in writing. Before you fork over any money, ask the seller to provide a written statement outlining the vehicle’s condition at the time of sale. Some states — North Carolina, for example — require sellers to disclose damage in writing. If a seller balks at the request, it could be because he has reason to believe there could be something wrong with the vehicle. While you’re at it, ask for the manufacturer’s repair history if available.

4. Don’t forget about buyback options. Finally, if you do end up with a dud, don’t forget to see if you’re eligible for a refund from one of the VIN check services. Both Carfax and AutoCheck have buyback guarantees if you later discover the vehicle actually has a branded title rather than a clean title. Branded titles include those issued for salvage vehicles, flood damage or inaccurate odometer readings.

These buyback programs can be rather limited, and they won’t give you any cash if you later discover the car had been in an accident or had extensive repairs that didn’t require a branded title. However, they are perks that shouldn’t be overlooked. After you buy a vehicle, be sure to register it with Carfax and/or AutoCheck immediately to be sure you’ll be eligible to make a claim if needed.

For further reading on the subject, head over to our article on the six things you should check before buying a used car and 10 tips to buy your next car for less.

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Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • PatriotLuvr

    I owned a Lexus LS 400 that was involved in a front end accident that was submitted to insurance for payment and repair. The amount to repair the vehicle was over two thousand dollars. Three years later when I sold the car the purchaser showed me the Carfax report and to my surprise it show no accident repairs to the vehicle. Carfax reports are not worth the money because they are not accurate.

    • Al Seaver

      Apparently Carfax is just one more company taking money for doing as little as possible to get by.

  • Al Seaver

    Keep your eyes open out on the interstates and you will see car carriers loaded with wrecks being transported from state to state. Many times, once they leave the state where the wreck occurred or the vehicle was registered, the damages magically disappear from the records. They are then repaired and shipped to yet another state to be sold, thus covering the trail even more. It’s almost like money laundering.

  • speaksthetruth

    If you google the VIN of the car you should get a so,so car fax report for free. pics and all!

  • broad0505

    Republic wireless. I had enough when AT&T started forcing me to pay
    for a ($30) data plan because I was using an iphone even thought I did
    not use data. I did not need data away from home and at home I used
    wifi. They could detect the iphone and automatically added the plan to
    your bill…

    • grandmaguest

      ??????

      • Al Seaver

        @grandmaguest I second that.

  • broad0505

    for sharing.

  • Ruben

    One point you failed to mention from CARFAX is the opposite. I got into a fender bender in a parking lot backing out of a spot at the same time as another car and each scratched our fenders (less than $500 to repair) We reported the accident and CARFAX put it in the report as a collision. I reached out to CARFAX which you can only do by Email (They do not list phones) They refused to indicate that it was a minor accident. They provided a free report and I was surprised to find another accident reported that I know that it was not my car since the day of the reported accident I was not anywhere near that city on that date and I know I was not involved in any other accident in that car. CARFAX refused to remove it and indicated in an email that the report clearly states that my car was in an accident. I asked for a copy of the report and they refused to provide it. I called my insurance company and they verified that no accident was reported but CARFAX refused to remove it an placed the burden on me to go to the police station to get an accident report corrected for an accident I was never involved in the first place. This caused the value on my car to decrease by around $4,000. There should be a law against this injustice by CAR FAX. You cant reach them by phone and the same person “Mr. Mitchell handles all the complaints and is very confrontational and accusatory. I do not have any time to pursue this because I am a busy person but I hope to one day go back and put a stop to this injustice by CARFAX since then, I gifted the car to my daughter and she will run into the same problem when trying to trade in or sell. CARFAX is not reliable for buyers as well as sellers.

    • Al Seaver

      Rather reminds you of the credit reporting bureaus, doesn’t it?

  • transmitterguy

    I fix my own car and Carfax doesn’t know it. I don’t rely at all on a car fax. Find a reliable mechanic, and pay him to evaluate any prospective vehicles you are going to buy. Todays vehicles don’t rust out through the body like they used to, but watch out! The chassis sure does. Crawl under and make sure the brake lines are still attached, or the shock mounts are still welded on and the gas tank straps are still good. Especially with all the flood vehicles flooding the market, The electrical systems can be a corrosion nightmare.