What Is a CARFAX Report?

Definition and Examples of a CARFAX Report

A couple looking at damage to a car's front bumper
••• Guido Mieth / Getty Images

A CARFAX report is a comprehensive vehicle history that helps to ensure you're purchasing a car or truck that doesn't have any preexisting problems or issues. It can prevent you from getting stuck with a lemon, help you negotiate a reasonable price, and it will generally give you more peace of mind about your investment.

A CARFAX report can be particularly important if you're buying a used car from a third party.

What Is a CARFAX Report?

CARFAX is in the business of collecting data on cars and trucks. It contains all this information in a database. Enter a vehicle identification number (VIN) into the database, and pertinent information regarding that vehicle is collated into a CARFAX report.

The CARFAX database reportedly maintains more than 6 billion vehicle records.

Anyone interested in purchasing a used car can provide its VIN and pay CARFAX to learn a variety of information about the vehicle, from who has owned it to accident or flood damage and mileage records.      

How Does a CARFAX Report Work?

A CARFAX report includes several important areas of information. The title information section is considered the most reliable because this data is on record with states' Departments of Motor Vehicles. You can be sure that the person you're purchasing the vehicle from matches who CARFAX says actually owns it.

The CARFAX report will also list the last reported mileage on the vehicle’s odometer. Some fluctuation can be expected here, but it's a red flag if the number reported is dramatically different from what you see on the actual odometer.

You ideally want a vehicle that's had the fewest number of previous owners when you're buying a used car. This typically indicates that the vehicle didn't have any problems and has been in the same hands for a long time.

Multiple drivers could mean you’re getting a lemon—or worse, a car that's been fraudulently handled.

CARFAX uses more than 100,000 sources of data in the aggregate to compile a full list of any accidents or damage done to vehicles. Their sources are reputable and include auto body shops, police departments, and insurance companies.

A CARFAX report will tell you whether the car was used by an individual driver, for lease, for ride-sharing, or for commercial purposes. Commercial and ride-sharing vehicles typically get much more wear and tear, so it’s important to know if that’s what you’re getting yourself into.

You'll also see the information on the CARFAX report if the vehicle was ever recalled or had a part recalled.

Limitations of CARFAX Reports

A "clean" report means CARFAX hasn't found any significant issues, but it's not as simple as a big green “CLEAN” written at the top. Information can exist to which CARFAX doesn't have access. There are several issues you won’t see on a report that can nonetheless be critical to your purchase because unscrupulous individuals might take steps to avoid information appearing in public records.

CARFAX relies on local police departments for its accident data. The report will probably be very accurate if you’re purchasing a vehicle that's only been driven in a major metropolitan area, but some accidents might not have been reported if you're buying in a small town. And any accident that happened within the last few days won't appear on the report either.

It likely won't show up as an accident if a body shop rather than a police department reports an incident to CARFAX. Auto shops tend to report what they fixed, not what happened to making fixing necessary. It could indicate that the vehicle has been in an unreported fender-bender if you notice that a bumper has been replaced but there's no corresponding information on the CARFAX report.

CARFAX has no way of gathering information of which there's no record.

Do I Need To Pay for a Carfax Report?

Make sure to have an independent inspection done on the vehicle, and take a test drive before you decide to buy it. A CARFAX report can be a valuable tool, but it shouldn't be the only one in your arsenal. It doesn’t replace an expert opinion.

You can order a single CARFAX report and view it online for $39.99 as of 2020. You can also buy multiple reports at a discount.

Key Takeaways

  • A CARFAX report is a detailed accounting of a car’s history.
  • CARFAX reports on a vehicle’s title, mileage, previous ownership, accident reports, and it might tell you what the vehicle was used for, such as whether it was a personal or commercial vehicle.
  • A “clean” report means CARFAX hasn’t found any significant issues, but the report is dependent on information being a matter of record so CARFAX can find it.