Tuesday, June 9, 2009

Don't Blindly Trust Carfax

After hurricane Katrina Carfax gained a lot of attention when they saved buyers from purchasing Kat's automotive victims.

That was great press for Carfax, but don't let it trick you into think that Carfax knows everything about every car.

A few years ago I had an accident in my Subaru Outback. A police report and an insurance claim were filed and I had it repaired at a reputable shop. The damage was significant enough and the car was not driveable. Not long after that I decided to sell the car, but first I wanted to see what the Carfax report would look like. So I paid the small fee and found a clean report.

There are any number of reasons why Carfax didn't get word of this car's history.
  1. Carfax relies on reports from the DMV, insurance providers and repair shops. If the customer paid cash to fix the damage from the accident, it will not show on the Carfax report.
  2. Carfax only shows accidents over 25% of the value of the car at the time of accident.
  3. Sometimes Carfax doesn't specify a salvage title. A salvage title is issued for a car if a car was totaled in an accident with the damage being more than 75% of the value of the vehicle.
  4. Carfax will not show you if the odometer has been rolled back. While it does show the mileage of the car at title transfers the odometer can be rolled back in between, and you will never know.
  5. Frame damage on a vehicle will only show on a car fax report if it has been reported.

Carfax knows it's limitations and includes a disclaimer stating that it's not responsible for omissions, reliability, or accuracy on the report. They only can report what is given to them.

Understand that Carfax is still a worthy tool. Whenever you are buying a used car you should check the Carfax report. If you are buying from a dealer, get them to pay for and furnish the report (it's in there best interest). A clean Carfax report still means that you should have an independent inspection. However, a bad Carfax report is a strong message to steer away from this vehicle.

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