Reader Question: Car Fax

After my post Don't Blindly Trust CarFax I received the following email from a reader.

Hello,
I enjoy your blog! I am wondering though how you learned "Carfax only shows accidents over 25% of the value of the car at the time of accident." I can't seem to find this information anywhere else.
Thanks,
Jon

I went back and checked my sources for the info that Jon questioned. The sites where I gathered this information were from various types of associated content resources. Basically these articles are sourced out to various informational websites.

I'm glad Jon raised the question and so I contacted CarFax to check the claim that they only report accidents over 25% of the value of the car.

"If any accident is reported to Carfax, it will show on the Carfax Vehicle History Report," says Chris Basso, representative for CarFax. "We also back the major incidents that result in a branded title being issued by a DMV with our Buyback Guarantee."

The key here is that not all accidents are reported to CarFax. Of course, that is of no fault of CarFax. The company is not clairvoyant, they just report what they know. The reason an accident may not be reported is if it was not reported to an insurance company. The repairs may still be done, just not under an insurance claim.

Another key piece of knowledge--mostly for me--is not to trust associated content sites. Thanks to Jon for this lesson.

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.