Is CarFax really the ‘be all’ and ‘end all’ when it comes to the history of a used car?
CarFax has done an amazing job positioning themselves in the used car market. For the pre-owned car buyer, CarFax has become not just a trusted source of information, but likely the most trusted source when it comes to doing a “background check” on a pre-owned vehicle. But, should they be?
The truth is that CarFax does an incredible job of recording, reporting and providing information, but unlike the news media and a traditional reporter who find, source, investigate and who then report that information, CarFax only holds itself responsible for information that they receive or are provided with – they don’t actively seek out information. In other words, and as you can find in the fine print of their website, they are only responsible for information that is reported to them, and not otherwise.
How do they receive their information? CarFax receives their information from dealerships, insurance companies, police reports, and repair facilities (amongst other sources), but only those that choose to report the incidents and/or the work they do. For those things that are reported to them, CarFax reports can be incredibly reliable, but not always, and when they are missing information, their reports can be disadvantageous because of their inaccuracy. Here are a few examples:
1) Two people get into an accident (minor or major, doesn’t matter). They pay for their damages and do not make any insurance claims. – NOT REPORTED TO CARFAX. Both cars have clean CarFax history reports.
2) Two people get into an accident. A third uninvolved party pulls over at the scene of the accident. Police are called and report to the scene. – ALL THREE CARS ARE REPORTED AS HAVING BEEN INVOLVED IN A CAR ACCIDENT – Yes, even the one that was completely uninvolved.
3) A parked car in a parking lot is hit by another car. Both cars are damaged and need body work. The owner of the car that was hit makes an insurance claim. The car that did the damage flees the scene and the owner of that car pays for their damage ‘out of pocket’. – Car that was hit: REPORTED TO CARFAX. Car that did the damage: NOT REPORTED.
4) Owner of a vehicle scrapes the entire side of their car against a wall, and makes an insurance claim to have the repair made. NOT REPORTED TO CARFAX (because it’s not an accident).
5) Oil changes and vehicle servicing that are done at a franchised dealership or a large chain (like Pep Boys) – REPORTED TO CARFAX (sometimes). Oil changes and vehicle servicing that are done at privately held (smaller) facilities – NOT REPORTED TO CARFAX
6) A car is in an accident. An insurance claim is made. It takes months for the claim to be settled in full, but the repairs for the car take place immediately, after which , the car is traded into a dealership. The dealership sells the car before the claim has been completed. NO ACCIDENT ON THE CARFAX REPORT as printed for the new buyer. The new owner only finds out when they go to sell the car down the road, at which time the insurance claim has been settled and the accident shows on the CarFax report.
Simply, there are more than a handful of things that don’t get reported to CarFax, so while CarFax reports can be chalk full of information, they are often missing information, and frequently don’t have information that they should, particularly for incidents where vehicle owners don’t take their vehicles to franchised dealerships for servicing, or where they pay for their body work and repairs in cash or outside of insurance.
All of this said, the best indicator of a vehicle’s history, in addition to whatever shows on a CarFax report, is an inspection that is conducted by an independent mechanic or body shop that can properly inspect a car for previous body work and/or repairs. Good body shops and repair facilities have tools that enable them to determine when panels of a vehicle have been painted, and when parts have been repaired or replaced. Believe it or not, the most powerful of those tools is their eyes.
More to the point, if you’re thinking of buying a used vehicle, feel free to pay for and read a CarFax report, but know in advance that the picture that report paints might just provide for a partial fingerprint, and not a full or accurate depiction of a car’s true history. A ‘clean’ (accident free) CarFax report might not be all it’s cracked up to be.
And, know this: if you’re a used car buyer, you are always entitled to request a 3rd party vehicle inspection off of the premises and at a facility you choose!