We’ve all seen the commercials with the cute little fox saying, “Show me the CARFAX!”    It has become common wisdom that you should never buy a used car without a CARFAX report.  If fact, it’s one of my 10 Commandments of Car Buying.  But, there’s a lot more to a CARFAX report and to evaluating used cars than most consumers think.

Many used car shoppers simply look to see if a CARFAX report for a vehicle is “clean” – that is, no accidents or major title issues.  That’s just the tip of the iceberg.  Think of a CARFAX report as being a “background check” on the used car you are considering bringing into your family.  A car with no accidents and a clean title history is not guaranteed to be lemon-free. Where a car has lived, how it was used (and by whom), and how well it was maintained are key indicators of a vehicle’s predicted reliability.  At minimum, you should look at the following data on a CARFAX report:

  • Accident history
  • Title history
  • Number and type of owners
  • Title states and time spent in each state
  • Odometer history and consistency
  • Maintenance history

I look at 30 different pieces of data on a CARFAX report when evaluating the quality and value of a used car for a client.   So, yeah. I’m picky about the quality of cars I buy for my clients.

Unfortunately, CARFAX reports are not 100% accurate.  CARFAX receives its information from more than 34,000 data sources including every DMV across the U.S. and Canada, as well as auto auctions, fire and police departments, dealerships, collision repair facilities, insurance companies, rental agencies, and more.  While this makes CARFAX the most thorough vehicle reporting system currently available, their accuracy still depends on the quality of the data they receive.  If an accident is not reported to the police, and the damage to the car is repaired by a facility that does not report to CARFAX, then that accident will likely not be reflected in a history report.  I recently saw a late model Lexus with a squeaky clean CARFAX that, upon closer inspection, had repairs and paintwork to the entire back third of the car.  On the other hand, I looked at Honda that showed a “Moderate Accident” on its CARFAX report.  In reality, it had only a very minor incident that required less than $200 to repair a crack in the front bumper cover.

Accident history is not the only critical information on a CARFAX report than can be inaccurate.  Many states flag cars that have been “totaled” due to an accident, flood, fire or theft by issuing a “salvage” or “flood” title – but not all.  A vehicle from one of these “non-disclosure” states, like Florida, may never reveal its sordid history (as a submarine) on a CARFAX report.  Unscrupulous dealers may engage in a practice known as “title washing”, where they take flooded or rebuilt cars to a state that doesn’t require salvage labeling and get a new, clean title with consumers being none the wiser.

So, don’t judge a car by its CARFAX alone.  A CARFAX report is a crucial tool in evaluating used cars, but it is just the starting point.  Always take a used car to an independent ASE Certified mechanic for a pre-purchase inspection before you buy.  A good mechanic is trained to look for signs of water damage, fire damage, paintwork and repairs as well as mechanical neglect.  Thorough research and a trained eye will go a long way to helping you find a good, reliable used car instead of getting stuck with a lemon.