You can’t trust that Carfax report!
You see Carfax mentioned everywhere. Everyone tells you to use them when shopping for a used car, right? They’re a household name for vehicle history reports, but I have a secret to share.
You know that we just sold our Chevy Malibu a couple weeks ago. Well, back on tax day (April 15) of 2005, we were in Pennsylvania for a wedding. While making a left turn across 2 lanes of traffic (per the bride’s father’s directions), an SUV jumped out of the right lane into the left (which was otherwise clear of traffic) and collided with us. Both vehicles had about $6,000 worth of damage. Ours was confined to the front-left of the vehicle, but there was a small bit of frame repair done.
I posted the car through Cars.com and chose the top option which gave me a “free” Carfax report that I could show to the public. I plugged in the VIN number and out popped the report. I scanned down, knowing it should show something bad. I got down to the damage report section, and here’s what it showed:
Yep, that’s right, No Issues Reported. No “Frame Damage” and no “Accident” was reported. Why? I don’t know. I had the damage repaired by Allstate, and it was significant enough to warrant a report to Carfax, but apparently someone dropped the ball big time. Carfax does note under the “Other Information” heading that “Not all accidents or other issues are reported to CARFAX”, which is their way of saying “Don’t blame us!”.
When I took the car in to various dealers, as well as Carmax, for a trade estimate, they immediately noticed the weld spots, and knew there had been an accident. Only a trained eye would have found them, but they knew what to look for and found it.
Another example of an incorrect Carfax report went the opposite way for me. I had a side-swipe accident in my Acura TL-S years ago. When I took it in to Honda to trade for a new Ridgeline, they informed me the Carfax report stated there was frame damage. I went home and looked at the itemized repair sheet and nothing related to frame repair was listed. However, I still negotiated a trade at $3500 above the diminished value of my Acura for the Ridgeline (at almost invoice price). If I wasn’t dealing with a “luxury vehicle” and specifically with Honda (who makes Acura), then I would have gotten the raw end of the deal.
So the lesson here is this: Always take the used car into a trusted mechanic for inspection before sealing the deal. Oh, and be sure to ask whether the car has been in any accidents. Don’t just trust the Carfax report alone.
So what’s your experience with Carfax? Have you been lied to, or felt cheated after buying a used car that turned out to be a lemon?
UPDATE: Thanks to commenter Super Saver for providing this link to a Consumer Affairs report on Carfax unreliability.
Try one of these related posts too!:
- Best Finance Posts from Carnival of Personal Finance #115
- Thanks for the Hits! May 2008 Traffic and Referral Numbers
- Best Posts from August, 2007
- An Honest Car Dealer?
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Clever Dude,
Interesting. While some level of errors are expected, it does seem (statistcally) improbable that you would experience two of them.
Here’s an article about other people that have had major Carfax issues.http://www.consumeraffairs.com/news04/2006/10/carfax_facts.html The article states insurance companies are not one of sources Carfax uses.
Great post. Previously, I would have trusted Carfax much more.
Autocheck is a lot better than CarFax in general. But I think you need to look at your driving habits! 2 accidents? Ouch….
Tyler, that’s 2 accidents in 12 years of driving, and in a very busy area. But yes, I do need to change my habits, but that last accident was not my fault. The lane was clear when I pulled out, but an impatient driver jumped out of the right lane into the left and we collided.
I got stiffed…by the insurance company. Now to be fair, they covered the vehicle’s repairs 100% plus my rental for over a month while it was being fixed at a dealership. But, since it had been in an accident that was not my fault, I felt there should have been additional compensation for the loss of value of the vehicle. When I eventually sell it, I will likely have to accept less because of that accident. It seems like a big factor is missing in what the insurance company pays.
Only a short time ago Carfax settled a class action lawsuit that resulted because it supposedly led consumers to believe it had the lowdown on most cars, when it fact it was revealed that in more than 20 states Carfax received no accident or title reports from police or reporting agencies. Carfax isn’t perfect, but it has changed its practices and is now doing a somewhat better job than before the lawsuit. I believe the company now have a one-year transferable buyback guarantee as well, for instances where a buyer relies on an errant Carfax report to his/her detriment.
Long time reader, first time commenter.
As a former Carfax employee, I can tell you that the only data I would truly trust on the report is the stuff they guarantee - that is, all the DMV-reported data. The accident and repair data they get is just too spotty.
I definitely agree (and Carfax probably would, too) that you should “always take the used car into a trusted mechanic for inspection.”
Keep up the great blog!
The above comment is bang on target. The CARFAX guarantee is a kind of sham and only assurance they give is that “DMV reported” accidents are included in the report - I don’t see how they will mess that up.
Mechanics/Shops don’t have any obligation to report incidents to CARFAX directly - so unless accidents get reported to DMV, they never appear on the report.
Normally, I would shy away from inserting any self-serving links in comments, but you might find this useful - it’s about understanding vehicle history reports (feel free to remove it if it suits your convenience):
http://www.thetaoofmakingmoney.com/2007/07/17/437.html
I sold a car privately recently and the carfax for the vehicle was wrong. It listed over 5 owners for a car 4 years old (there were two). Every change in registration (they were just changes of address) and the trade in to the dealer were all listed as different owners. This cost me a sale because someone pulled the report and thought it was a lemon due to so many owners listed. They wouldn’t allow me to explain.
I don’t think there is much value in the CARFAX reports. The only redeeming thing is they are cheap or included in some purchases. You get what you pay for.
Do not trust Carfax.
I bought a Jaguar which according to the Carfax report was totally clean, no accidents, repairs.
Only after I got the car home did I discover the car had been in a major accident, had a bent frame and had been repainted.
A Carfax report is not worth the paper it’s written on.
Very Interesting as I have used Carfax in the past and assumed they always provided accurate information. If and when I get ready to sell my present 2005 Malibu, I will look into Carfax to see if their report will show the rear end collision my car suffered. If it is not reflected in their report, then that gives me reason to not trust them when purchasing another used car.