CarFax – A Comprehensive Review – Is it Worth it?

When it comes to buying a used car, there is no car history report service more prominent than CarFax. You’ve likely seen the commercials. A CGI fox clad with a shirt that reads ‘CAR FOX’, giving advice to a consumer looking to purchase a new ‘used’ car.

CarFax began in 1986 with a mission to become the most prominent source of information regarding used car history for both buyers and sellers. We’re now in 2019, and CarFax has achieved that goal in North America with over 91,000 sources of data now available to millions of used car buyers every year.

A CarFax report can net you quite a bit of information on numerous used vehicles ownership history. The company has the ability to track cars via their unique identification number (known as VIN) and, though the reports are not perfect, they can paint a clear and more accurate picture for buyers who know exactly what they’re looking for.

Here’s some advice that may save you a lot of time, frustration, and money, and will help you understand and use CarFax to its fullest potential.

The 411 On CARFAX

If the Vehicle Identification Number (VIN) of a car has been plugged into the CarFax database, an informative report is available with multiple points of interest on the vehicle in question. The information displayed will consist of previous vehicle ownership, all reported accident and flood damage history, any mileage discrepancies, lemon status, and any number of other issues that a potential buyer may need.

No service is perfect and CarFax is most definitely not the exception to the rule. In order to get a handle on CarFax, I’ll go over what to expect from a CarFax report, both the good and bad of it all, and how it stacks up to the competition.

What To Look For In A CarFax Report

So what exactly is a ‘clean CarFax’ report? Chances are that if you’ve ever looked into purchasing a car from a lot, the dealer may have advertised this particular phrase to you in order to put you at ease over a certain vehicle’s history. If you’ve ever seen an actual CarFax report before, you know that there are a few things that immediately stand out. But just how reliable is this information? Let’s go over the more notable report highlights.

Maintenance Report

Looking into the maintenance, or lack thereof, of a CarFax report, will likely be the first thing to jump out at you. It’s very possible that the previous owner will omit a few things from the maintenance report such as an oil change, tire rotation, or part replacement.

When purchasing an older vehicle, look beyond just the basics of maintenance and repairs as part replacements can be a major focal point. To understand just how the previous owners may have cared for the vehicle, look for things like brake replacement, timing belt replacements, wheel bearing replacements, and other major repairs. These should be noted in order to give you an idea of when the repair should have taken place as opposed to when it actually did.

Complications Due To Accidents and Flood Damage

Minor incidents are a general occurrence of all vehicles that set out on the road. A few nicks, dents, scrapes, and chips are can be easily disregarded when pertaining to the long term performance of a vehicle, as these mishaps are easily fixed.

Unfortunately, most CarFax reports will not detail a full explanation on the vehicle’s accidents or the condition the vehicle was left in after it took place. All that is provided is the knowledge of the vehicle being in an accident and the date in which it occurred. To understand if any real harm was done to the performance of the vehicle, you’ll need to check in with the dealership. Ask them to identify any reconditioning that may have been done to the vehicle in order to understand what is listed on the report.

Aside from a major accident, flood damage can also be a serious issue to a vehicle’s long term performance. CarFax gives a warning to would-be buyers about the severity of what flood damage can do to a vehicle. Not only to the outside but also the car’s electrical and computer systems, which affect everything from headlights and windshield wipers to airbags and antilock brake systems.

Since flood-damaged cars can be such an issue for those looking into buying a car second hand, CarFax offers a free tool to help identify if a vehicle has suffered through any flood incidents.

Previous Title Owners

It goes without saying that all used cars had a previous owner. Hence the ‘used’ part. So it’s understandable for a report to show information on the last person to own the vehicle. What you’ll want to look for is just how many owners a vehicle had previously and how long they’ve held onto it.

It’s not necessarily a bad sign for a car to have had multiple owners though this bit of information will definitely stand out on a CarFax report. This really only becomes an issue if the car is new or reads low-mileage. An economy car with multiple owners in a short period of time should send up a red flag. What could be so wrong with this vehicle that no one was willing to keep it long term? Purchase of this vehicle could bring problems in the future.

A performance-enhanced vehicle, like something that’s been tricked out for racing, or a sports car, could have been hastily purchased by a car owner who didn’t know what they were getting into. All of this is also true of cars previously used as rentals, which I’ll get more into later.

Ensure that you look into possible accidents or major damages as well as irregularities in maintenance reporting. A car that’s been ridden hard in such a short period of time is likely not going to last long, especially if it’s had any incidents.

Report Time Gaps & Irregularities

On the topic of irregularities, large gaps in data reporting can be another red flag to give you pause. Too much time spent in between maintenance notations like oil changes, rotations, new tires, etc. could be the result of negligent owners.

Mileage counter irregularities between reports are an even bigger complication that should grab your attention immediately. This sort of thing reeks of a potential scam in order to increase the value of a vehicle by dialing back the mileage. This is predominantly carried out by private sellers and rarely ever occurs with dealerships but you should always be wary.

If the vehicle’s mileage is inconsistent, look into a new vehicle. Only consider buying one with a consistently reported mileage detailed in the CarFax report.

It Used To Be A Rental

I’ve touched on this very mildly in an earlier segment “Previous Title Owners”. Take what was discussed there and add everything when it comes to the potential purchase of a previously owned rental car.

If you’ve ever had to use a rental, vehicle care was likely not at the forefront of your thoughts. In fact, if the rental was a sports car or some sort of premium class design, you likely cashed in on the time afforded, so to speak. I can remember getting a 2018 Dodge Charger from a rental place while my car was being fixed. I thought I was speed racer for about three days. Scratched the side of the door when pulling into a tight spot. Didn’t care. Paid for the insurance up front. I know I’m not the only one who does this.

Take caution when dealing with a previously used rental car. They’re usually sold off after reaching a certain mileage mark in order to keep the vehicles on the lot new and fresh. Rentals will likely have more than the average yearly mileage seeing as most are used for long trips and driven roughly. More so than you would your own car on a daily basis.

A silver-lining to look at is that rental cars will usually receive necessary maintenance and repairs in a timely manner. Weigh all of the pros and cons prior to purchasing a rental car as your personal use vehicle. Though it may save you money up front, the wear and tear of constant misuse could see you emptying your bank account for repairs in the future. However, if the vehicle is on the up and up and passes a thorough inspection, then you could have yourself a diamond in the rough.

Where CarFax Acquires Its Information

CarFax maintains over six billion vehicle records with a plethora of information about each of them. So how exactly does it acquire this information?

Various motor vehicle bureaus from across the U.S. and even Canada, as well as insurance companies, auto auctions, repair and service facilities, rental companies, state inspection stations, fire departments, law enforcement agencies, and vehicle manufacturers, lend support to CarFax’s data. Oh, and this is only the tip of the iceberg.

You would think that with so many sources of vehicle information that CarFax reports would be considered 100% reliable. Sadly, this is not the case. Despite so many resources, CarFax has a few major issues when it comes to their vehicle reports.

CarFax relies completely on the information provided by its sources. This means that they take everything reported at face value. That’s not too bad until you consider that not everything will get reported to these source companies meaning not every bit of data is detailed about every vehicle. It’s not uncommon for a company to not gather all of the facts pertaining to a vehicle and still push out only the information that they have on hand.

CarFax Reliability

As a first source, CarFax reports are a great place to begin researching the history of a vehicle. Yet, it should not be the only source of historical information you use. Just because the CarFax reads as a “Clean Report” doesn’t mean the vehicle is without unreported faults.

Granted, a CarFax report detailing red flags, like a major collision, should not immediately remove the vehicle from consideration. Instead, take the vehicle and information gathered to a reputable mechanic to perform a thorough inspection. This way you get a better understanding of a vehicle’s current condition.

The cost will not be cheap, far more than a CarFax report, but it will provide much better peace of mind when dealing with the vehicle’s current condition as well as what it’s been through. You can also seek out additional information from the dealership that currently holds the car. They’ll be able to provide details on past warranties and other repairs the vehicle may have been subject to.

Looking For Inaccuracies

So as you can see, a CarFax report is not a magical document detailing everything you’ll need to know about a vehicle. It even displays this information on the report itself if you look closely enough:

Though their resources are vast, they are still subject to gaps and inaccuracies provided to them from their data sources. So what does all of this mean?

The most accurate report you’ll find from CarFax is the change in titles. Though not all exchanges of ownership may be documented, the report will definitely keep you informed if the vehicle has been branded a salvage, reconstructed, if it’s been in a flood, etc.

Everything else is at the mercy of the information that is acquired via outside sources, most of which can be marred by human error. Especially considering that only the information that has been accumulated and entered into the computer system will ever see the light of day on a CarFax report.

Building off of this, it’s also quite possible that information that should have been recorded was delayed leading to inaccuracies on the report you’re provided. So you may see that the car you’re interested in buying claims no major accidents on the CarFax report. You purchase the vehicle, drive it around for a few months, only for it to breakdown on the highway. Lo and behold, the vehicle had actually suffered two major collisions in the past that had yet to be entered into the system. This is a very real possibility and could cause future complications.

A CarFax report could also display a large amount of mileage on a vehicle that hasn’t seen a full year yet. You find it strange and pass it off as a rental, moving on to a car with a better report. However, the report may have been wrong all along and the mileage numbers are actually for a different vehicle. The individual entering the information made an error and now you may be missing out on an otherwise great investment vehicle.

In Conclusion

In the end, you shouldn’t allow the errors to scare you away from using the services that CarFax provides. It’s an amazing tool, even with the problems, and you’d be hard pressed to find a report with as much detailed information on a vehicle. All I’m advocating is for you to be wary, do your homework, and seek additional sources to make a better-informed decision on your final purchase.

Always ask for a CarFax report from every dealer and if ever one is denied, you should walk away immediately. A used car is a “what you see, is what you get” situation so you owe it to yourself to be the most prepared that you can be.