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Can you trust Carfax?

If you're thinking about buying a car and the Carfax report comes back clean, you're good to go, right? Um, maybe not. Here are four other ways you can avoid buying a clunker.

By Stacy Johnson Aug 21, 2014 5:15PM

By Maryalene LaPonsie, Money Talks News Money Talks News


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? 

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.

 

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.
Used car lot in California © B Christopher/Alamy4 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.


More from MoneyTalksNews.com

107Comments
Aug 21, 2014 9:05PM
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My daughter bought a car from a dealer awhile ago in Indiana that provided a car fax report that stated no accidents etc. etc., well I came home from working out of town and had an inspection done, and guess what, the car had had major front end damage repaired, you could see where welds were done, and where the body shop had installed large shims to make parts line up when they put it back together.


Needless to say I threatened the dealership with a law suit and they took the car back and refunded my daughters money. Moral of the story, DO NOT TRUST CARFAX, they can only report what is reported to them.

Aug 21, 2014 7:52PM
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I never buy a used vehicle without having it thoroughly inspected . As soon as  I find the vehicle I want , I figure a $100 bill is well spent "insurance" that the vehicle is what it is supposed to be . The key is having a competent mechanic / collision specialist that you trust . They are out there , you just have to check around , and check out their reputation too . A good used car (especially 1-3 years old) can save you a bunch of money over buying new . jmo
Aug 21, 2014 7:08PM
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If you no little about what to look for on a used vehicle,Carfax and the other history accumulating services are better than nothing. Your best bet when considering a used vehicle is to take it to a trusted mechanic who can put it on a lift and check it out from the side that you can't see,with eyes that have learned a lot about cars. I have saved many of my customers much heartache over the years by uncovering all sorts of expensive issues that were not reported on the Carfax sheet.  Find a mechanic you can trust,just like a doctor. 
Aug 22, 2014 11:26AM
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The BBB is not to be trusted as well
Aug 22, 2014 9:09AM
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Carfax proves a negative.  IF there is a bad mark on a Carfax, you can be assured it is a bad car.  IF there is no bad mark on a Carfax, you can not be assured it is a good car.  Find a mechanic and get it checked properly.
Aug 21, 2014 9:36PM
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Carfax is a joke and the dealers use them to lowball you on your trade-in.  I was the sole owner of a car which I was going to trade in at a Honda dealer in Modesto.  The dealer said my odometer was rolled back.  This was a total lie because some technician entered in the wrong mileage which went on to Carfax and made it look like I rolled my odometer back.  Later another dealer in Tracy, California said that this is a trick the dealers make to make it look like your trade in is worthless even though they know better.  Crooks, all.  I don't think I'll need to buy another car before old age takes me away.  I don't think I'll need to go through the hassle again.
Aug 22, 2014 9:19AM
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My big issue is that CarFax and repair shops are in business together to make money off of mky personal private information.  Who gives these places permission to report my oil change or fender dent repair to a third party?  Where the hell is my money in this whole deal?  We should all be upset that your local car repair shop or oil change facility is making money off of you by reporting yhour private information to these databases and then these data bases are making billions by selling your information
Aug 21, 2014 9:24PM
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Question: How many trust used car people? Answer: 0.00, I think you have your answer  
Aug 21, 2014 8:30PM
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Carfax has limited usefulness. Things to consider:


1.  Dealerships that take damaged vehicles on trade do no report the repairs if they intend to resell the vehicles on their lot. 


2.  Some repair facilities offer to "not report" for an additional fee.


3.  Some repair facilities report if they even write an estimate, even though there is no authorization for them to share your information with a third party.



Aug 22, 2014 5:45PM
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I bought a used Ford pick-up from a local dealer.  CARFAX report gave it a clean bill of health and they used it to help justify the price.   I used the pick-up for about 3 years and then went back to the same dealership to trade it on a car.   Of course, they pulled up a CARFAX that said the truck had been totalled 2 months before I bought it and used THAT to justify not giving me very much for trade-in.  What a surprise, when I pulled their first CARFAX out of the glove compartment, along with some comments from the original salesman (who was long gone).   "We dont know how that could have happened!" was their only comment.   I got my asking trade in value.   Do your own work before you head down the local shysters .. .err I mean local used car lot.
Aug 21, 2014 9:25PM
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Any company that tells you how bad someone else is/Angie's list etc. reminds me of my mother. 
Aug 21, 2014 9:44PM
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Knowing a good mechanic is key.  On my first car, my dad got the price dropped in half by having the mechanic spot damage that was clear the car had been flooded.  Great car after he redid some wiring and it lasted a long time.
Aug 22, 2014 4:26PM
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Well -this happened to me.  I got a Carfax.  Felt confident about my purchase. Things started going wrong with the car about 6 months in, electrically. Out of curiosity I got another Carfax. This vehicle was salvaged. Same vehicle, same VIN - somehow 2 different carfaxes. Don't ask me to explain what happened - but I have both copies printed.  I no longer trust a Carfax.  Take it to you mechanic, and trust the signs you see/hear/smell - and always, trust your gut. 
Aug 22, 2014 8:51AM
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CarFax is a joke and almost a scam.


Sure, it can dig up something if it was documented.  Problem is, 99% of stuff is not documented.

Aug 22, 2014 10:12AM
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I have seen quite a few Carfax's over the years.  To me they have little if any useful information.  I have been told the only way that damage gets reported is if the frame is bent in a collision.  Body damage even from big collisions does not get reported if the frame is not required to be repaired.  The last car I purchased came with a Carfax.  I believe that the car was rear ended and pushed into the car ahead for front end damage too.  This did not show up on the Carfax.  Buyers BEWARE is all I can say. Carfax is not all it is advertised to be (bordering on false advertising), in my opinion . 
Aug 21, 2014 8:12PM
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like any other (used) car dealer... oops.. pre-owned :)
Aug 22, 2014 9:53AM
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It's the same ol garbage in garbage out scenario. 
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This has nothing to do with Carfax information be unreliable or untrustworthy as implied by the article. This is about Carfax information being incomplete. Of course it is incomplete. That's why you check out a used car yourself along with a Carfax report. If you don't trust yourself to do it then bring someone along. But saying Carfax can't be trusted is a little disingenuous. Carfax reports what has been reported to them. If they were withholding information then it would be appropriate to say that they couldn't be trusted. You can only disclose the information you have. 
Aug 22, 2014 10:13AM
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What's worse is companies which purport to be able to tell you the value of used and new cars.  How can this be done without taking into account such factors as mileage, features, model type, and overall condition?  The best they can truly do is give you a ballpark figure with which to have as a reference.
Aug 25, 2014 6:02AM
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I wrecked my 2008 Pontiac solstice GXP. over $10,000 in damage. two other minor wrecks over $1,000 in damage each. Just traded it in, carfax said clean, no wrecks. Just sayin.
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