Used Car Buying Tips - Part 2: Understanding Vehicle History Reports

by golbguru on July 17, 2007

Today, let us assume that you are through with yesterday’s classic confusions and have come to a decision regarding the amount of money you can afford and the type of car you want. The next thing to do is to start looking for cars, and pull up the vehicle history records for the ones you like.

Here are some websites where you can start your used car search:

  • (gives you a list of used vehicles at all the dealer locations around a given zip code)
  • (listings from dealers as well as from private sellers)
  • Ebay Motors
  • Your local Craigslist
  • Your local newspaper classifieds
  • If you are looking for a *certified used vehicle*, most manufacturers have some kind of a national database of such vehicles (for example, Honda and Toyota certified used databases). Be sure to check these out - sometimes they list cars that do not appear on any of the other websites mentioned above.

Once you have successfully searched for the car you want, it’s time to pull up it’s history to check if it has been through any “bad times“. Currently, in US, there are two websites that offer vehicle history reports for consumers:

  1. CARFAX ($24.99 for a single report or $29.99 for unlimited reports over a period of 30 days)
  2. Autocheck (provided by Experian Automotive - a part of Experian - the guys who compile your credit history; $19.99 for single report or $24.99 over a 60 day period)

Information from these two reports is similar, but not exactly same. For example, for the 2005 Toyota Corolla we bought, CARFAX shows 4 records listing various events whereas Autocheck shows 6 records and some additional data. Although essentially the same information was present in both the reports, it was obvious (from the details) that the reports were pulled up from different sources.

For the purpose of this post, let’s discuss the more popular CARFAX vehicle history report. Most arguments could be easily extended to the Autocheck vehicle history reports also.

What Does A CARFAX Report Tell You

According to it’s website, a vehicle history report can carry information on the following:

  • Title information, including salvaged or junked titles
  • Flood damage history
  • Total loss accident history
  • Odometer readings
  • Lemon history
  • State emissions inspection results
  • Number of owners
  • Service records
  • Lien activity, and/or
  • Vehicle use (taxi, rental, lease, etc.)

If there are discrepancies in the things listed above, there are clearly marked in every vehicle history record so you don’t really have to do any “guess work”. Click here to see an example vehicle history report of a damaged vehicle. Problem areas are marked in red and bold (in a movie-style user-friendliness).

Since vehicle records are arranged by date and the odometer readings are chronologically displayed, odometer discrepancies are easy to figure out. However, issues with title information, lemon history, flood damage will only appear if someone has reported these issues to CARFAX (read the section titled “A Clean CARFAX Report Does Not Mean A Clean Vehicle” below). The report also tells how many people owned the car after it hit the road for the first time. Too many owners (2+) probably means inconsistent handling history - something which you should avoid. For the same reason, you should avoid vehicles marked as rental. Leased vehicles are fine - as long as they don’t show too many miles/year. According to

People who lease are charged for all necessary repairs. This policy encourages people who lease vehicles to take care of them.

By the way, lack of “service records” on a CARFAX report does not necessarily mean that the vehicle was not maintained properly. There is always a possibility that the servicing was done by a shop that does not report data to CARFAX.

At times you can even read more into a “clean” CARFAX report. Here is an excerpt from one such clean report for a certified used Honda Civic that we actually test drove last week:

Carfax stolen record on a *certified* used vehicle

Hmm .. “vehicle reported stolen” .. that too in Louisiana (think abandoned vehicles in swamps). That sort of breaks your trust. There was no way we could have bought that vehicle in spite of it’s clean CARFAX record.

We spent about an hour examining the vehicle ourselves, and from things we could observe, there was some evidence of water damage to the interiors (we compared the carpet and the upholstery to other Honda Civics and it was obvious that this one had some problems). We brought this to the notice of the salesperson who was trying to give us a *good* deal on that particular car - and he just shrugged it off with “Don’t worry, it’s a certified vehicle“. We waved him goodbye within a few minutes after that.

A Clean CARFAX Report Does Not Mean A Clean Vehicle

I have met plenty of students in my town who have bought cars after checking up a CARFAX report - which appeared to be clean. They did not opt for a detailed mechanical inspection because of the *clean* vehicle history. This is not a very wise thing to do for the following reasons.

Somewhere on it’s website, CARFAX says this:

CARFAX compiles the CARFAX Vehicle History Report from information it receives from thousands of sources. As extensive as our database is there are still accidents that are not reported to CARFAX.

You should keep in mind that all accidents are not reported to a DMV (or other sources from which CARFAX gets it’s data). Accidents that are reported usually follow the *normal* course of actions, which includes: filing a police report and/or reporting it to an insurance company for the purpose of claims and/or having the vehicle repaired at a service center that reports data to CARFAX. However, a number of times, this normal course of actions is not followed and as a result the information does not appear on any official records and hence does not appear on the CARFAX report.

Similarly, not all repairs are reported to CARFAX (generally happens when repairs are done at an arbitrary, cheap body shop instead of a dealer-associated body shop) and hence do not appear on the CARFAX report.

A classic situation that we see often in our university town is a good example of how certain events/accidents never make it to the CARFAX report. Most students usually look for lower insurance premiums and end up with policies with high deductibles. When such students get into accidents, they usually try to settle the matter without involving the police (so there is no police report). Then, they take their cars to some cheap repair shops in town, pay for the costs of repairs from their own pockets rather use their insurance (this happens due to high deductibles and also because they don’t want their premiums to rise due to insurance claims - as it is, premiums are very high for unmarried males under age 25).

In such situations, the damaged cars are back on the road within a week and there is absolutely no record of the accidents at all. CARFAX reports for such cars are absolutely clean, although the cars may have suffered cumulative damages worth thousands of dollars over the years.

The Meaning of CARFAX Buyback Warranty

CARFAX offers a buyback warranty on certain eligible vehicles. Here are a couple of important clauses in it’s warranty coverage.

  • Upon finding no severe problems (major accidents, fire, flood damage, odometer problems or lemon history) were reported by a DMV, the vehicle automatically qualifies for the Buyback Guarantee.
  • If you later discover that a severe problem was reported by a DMV and not included in the Vehicle History Report, CARFAX will buy the vehicle back.

Don’t let this warranty clause fool you into blindly buying a vehicle that appears clean on CARFAX. The keywords in this warranty clause are again “… reported by DMV …”. The warranty simply gives you an assurance that all the information available through government agencies has been included in the CARFAX report. If you later find out that your driver-side door was replaced after a side-impact accident, which was never officially reported anywhere, that warranty is of no use to you.

The only time you can avail the buyback warranty is when an accident has been reported by a DMV and, in spite of that accident record, the CARFAX report for that particular car comes out to be clean (accident-free).

What Should You Do Before Buying A Used Vehicle

Even if the CARFAX report is clean, always make sure you get your vehicle checked thoroughly by an independent mechanic. If the dealer/seller will not allow you to take the vehicle to your mechanic - do your own inspection (if you are confident enough) or just let the deal pass, you will certainly find others who will allow you to do so.

In fact if you read the information on CARFAX website carefully, you will notice that they acknowledge this:

While we’ll never know everything about a particular car, a CARFAX Vehicle History Report combined with a test drive and an inspection by a qualified mechanic is a consumer’s best protection when buying a used car.

Now, thorough vehicle checkups don’t come cheap (usually between $45 ~ $90 per vehicle depending on where you have the vehicle checked), so make sure you get only *worthwhile* vehicles checked. I will define worthwhile vehicles as the ones which satisfy the following three conditions:

  • It should have a clean CARFAX record.
  • It should pass a cursory visual inspection that you should conduct yourself.
  • It should pass a “test drive” run.

If there are problems with any one of these conditions, don’t waste your time and money in having that car inspected.

Tomorrow, we will discuss points #2 and #3 in detail - that is, how you can first visually inspect a vehicle with very minimal tools and how to test drive a vehicle before taking it for an expensive checkup.

Before you go, let me summarize this lengthy post in a few words - a vehicle history record and a thorough checkup by a good mechanic are complementary measures that you must implement before buying a used car; don’t skip one in favor of other.

As an aside, for Canadian citizens, runs a vehicle history report service in Canada, analogous to CARFAX in US.

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{ 78 comments… read them below or add one }

1 Debbie 07.18.07 at 7:17 am

You discuss why a vehicle history check alone is not as good as a vehicle history check + inspection. But can you talk about why a history check + inspection is better than just an inspection? Won’t anything that affects the car turn up in an inspection? Or is it just because the history is cheaper, so you can sometimes eliminate a car without having to pay for an inspection?

2 golbguru 07.18.07 at 8:42 am

Debbie: “Or is it just because the history is cheaper, so you can sometimes eliminate a car without having to pay for an inspection?” - That is exactly right.

History check should be your first step (but definitely not the last step) in looking for a used car.

Like I say towards the end, checkups by mechanics can be expensive. Plus, they are time consuming. Whereas, history reports can be obtained within minutes (for cheap) and can be analyzed in another few minutes. So it’s a good idea to eliminate a vehicle after an history check.

3 miguel 06.17.09 at 12:40 pm

Hey, curious maybe you can help me in my situation on this subject. I leased a kia van last year and always noticed the driver side sliding door seemed heavier, but never made anything of it because the dealer ran a “clean CARFAX”…so, I decided to run an AUTOCHECK report and not surprisingly found that a year proir to me an auction announced the unibody damaged in big bold red letters under a major negative problem category. I took it to the dealer had it inspected by them and other mechanics, and no one could find any evidence. Now I don’t feel safe with the vehicle and no one is willing to help me because they say …its my problem…I can’t afford to trade it and deffinitly don’t want to take a hit on my credit…is there anything I or the dealer can do.


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5 nprlisner 04.29.10 at 3:44 pm

I looked at a vehicle yesterday with a pretty clean CARFAX report that had the car registered at the dealership. Ok, it must have been a demo right? Wrong, the car had been traded in for another car. Since the mileage was only 15000, the dealer was able to call it Toyota Certified. I found out that the a dealer is able to “replace” the carfax report. I called the Salesman on it who originally told me that the car was likely driven by the owner. I later found out the true story. The car was clean. Not sure why they would do that but it happened. A clean CARFAX report is only one small piece of the used car puzzle.

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to plan Best Primary schools in Dubai in Dubai, although it’ll still hold
many surprises for you! This short article will give you a bit
of sound advice about how to cope with all the other obstacles, university life and classes you
will run into in your efforts to achieve college.

66 business process management 02.05.15 at 8:18 am

Enterprise Re Source Planning program has been implemented by all of the firms to streamline their processes that
are internal and to get a smooth flow of information inside the companies’ many functional sections.
A lot of time, efforts and cash are mixed up in ERP implementation procedure.
The price of ERP execution depends and varies on many factors.

The size of the organization and the business process management process’
complexity additionally determine the cost of ERP implementation. ERP involves an enormous expense and an effective analysis of the costs must be done prior to the execution.
ERP’s performance includes many procedures which increase the expense of ERP implementation. The services
are offered by the ERP advisor at a price that is high and also the training additionally is an important determinant.

67 online money transfer 02.06.15 at 1:37 am

Half the world’s adults don’t possess a bank account. This leaves them unable to handle unanticipated events including natural disasters
or medical condition in the household. The system of online money transfer transfer services
provides an alternative for the 2.5 billion grownups
who are now unbanked. The innovative strategy enables people to make use of
the net to deliver cash, on reloadable debit cards, with their
loved ones and friends abroad. The gain use of valuable services which they
might otherwise lack, by giving they unbanked a check card.

68 kendrick lamar 02.06.15 at 10:05 pm

Maybe you are seeking at things to do next, although you’ve decided you want to download music.
This post will certainly help you out. The following guidance may
train you on how best to download kendrick lamar.

Always make sure that your music is downloaded by you from a lawful website.
You’ll be able to face harsh fines should you obtain music illegally.
Most of the time you could be fined up to $500 per tune.
The musicians deserve to be paid for the music-they make, therefore
download just lawful duplicates of the tunes that you love.

69 vehicle signage 02.11.15 at 3:57 am

You require car signage to direct you with all
your tasks, when you’re operating in a place which is prone to injuries.
Although most companies would offer great training in jobs and the respective procedures, you still need panels or the health and vehicle signage auckland.
The security symbols and signs might be tough to consider,
particularly if there are lots of signs to be remembered.
In a manufacturing situation that is typical, the worker class must
be told regarding the safety gear as well as the security measures that
most companies want to take while they are in perform.

70 indian restaurants 02.12.15 at 2:48 pm

You’ll need to select an area where your new venture may flourish after you’ve made a
decision to begin a restaurant company. Place is of great significance to the stability of
a restaurant company. While you understand that you need an excellent restaurant location with lots of space like
indian restaurants restaurant, you
can find a lot of other items to think about. These offers a set of selection criteria that can be utilized to assess how
great a unique place is.

71 Best Schools In Dubai 02.25.15 at 11:30 am

When you consider it, school can be mind-boggling to a student
that is new. Such enormous adjustments, in other areas of
your lifestyle–at school these adjustments occur all at
one time. It’s very important to have guidance and help.
That is why this article includes some Primary Best Schools In Dubai in Dubai tips to remember to are successful.

72 Wedding Gowns In Dubai 02.25.15 at 10:13 pm

Should you be looking for Wedding Gowns In Dubai gowns that are very cheap but
still need a primary quality dress then here are the
tips for getting a drop-dead gorgeous wedding
dress at a ridiculously cheap price.

73 Schools In UAE 02.25.15 at 11:30 pm

Those college that is considering have many queries about it.
Numerous encounters are entailed by school; for that reason, it’s important that you will be ready prior to attending.

Here is guidance about schools in UAE
to be able to be more prepared prepared.

74 computer parts 02.26.15 at 6:35 am

For many people, a pc that is pre constructed is not the solution to what they
desire or desire. A visual developer will need a thing that takes into account computer parts that are
heavily geared toward graphic design, such as a more full-featured graphics card as well as a vast quantity of
RAM, while the games examiner may want something that will offer you a
powerful 3-dimensional card and also a a lot better sound set

75 Dance Floor Hire 02.26.15 at 9:09 am

Many individuals are engaged in discovering just what an illuminated LED
stage dance floor actually is. But actually, the expression by itself tells
you all that you have to know - at least officially speaking.
In short, a lit led dance floor hire
is a mixed dance-floor and stage - that’s, it can function as either,
or both; whatever the needs are - which illuminated, or is powered, by LED lamps.
In the event you have ever before observed colored LED lights for action, then it’s easy to only visualize just what there is this a breathtaking ground-breaking product, correct?
It is actually like nothing you’ve ever seen before -
except should you have danced on a lit LED stage dance floor.
If this is true no issue you would benefit from once again and the encounter yet
again. Dancefloors like these take going to a degree
that is totally new to the club. They are able to in fact,
work club-goers and the dancers upward into a
craze, whether they watching the LED illuminated stage is performed on by an act or
are dancing on the flooring themselves.

76 florist Auckland 02.26.15 at 6:04 pm

A nearby florist can help you discover the proper fresh flowers for just about any occasion. You might
visit the shop yourself and pick your blooms out to produce an arrangement much more personal, with a nearby florist.
Working with a local community florist is going
produce a personal relationship by means of your flower shop.
This relationship may create a huge distinction if you have a demand for
a flower shop who will determine in what you’re looking for
and make great suggestions for family occasions including funerals, weddings, or alternative occasions which happen in the foreseeable future.
One more advantage of working with a neighborhood florist is you are not unable to see for yourself how things will probably be
done. Whenever you are searching for the best florist Auckland for your next floral
shipping, the Society of flowers auckland indicate the following tips for you:

77 vodafone contact us 02.27.15 at 12:27 am

Regardless of if you prefer it or not believe it, vodafone contact us helpline| vodafone customer service number is a significant
part promotion in the current business world.
Just look about and you may see examples of it everywhere - from SMS, to in-game advertising, to the net that is cellular.
This article provides hints on how to utilize it to best match
your requirements.

78 debt collectors 02.27.15 at 12:40 am

Unless your business-only requires cash, most companies may run into the situation of being stiffed to get
a payment, whether by injury, like a bounced check, or with a consumer neglecting their obligations.
It may be very challenging to gather with no appropriate legal training on these
types of accounts that are delinquent. That’s why debt collectors is hired by many companies accumulate them and to look after their
outstanding accounts.

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