What Is a CARFAX Report?

A couple looking at damage to a car's front bumper
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DEFINITION

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.

What Is a CARFAX Report?

A CARFAX report is a complete report of all publicly available information about a vehicle. The data includes history about owners, maintenance, accidents, and many other events affecting the vehicle's value and operability. These reports are used to help inform car-buyers about the vehicles they are looking at.

The CARFAX database reportedly maintains more than 26 billion vehicle records.

For instance, if you're looking at a used car, it's very likely that CARFAX already has the data associated with the vehicle identification number because it had previous owners. The information about that car was gathered from multiple sources and combined into a formatted report. You buy the report from CARFAX's website, and can view the entire reported history of that vehicle.

How Does a CARFAX Report Work?

CARFAX gathers information from many different sources. The service works as an information or data aggregator, collecting data from multiple sources and combining them into a database. You can make database queries regarding specific vehicles and their information through CARFAX's web interface.

CARFAX gets information from more than 131,000 state vehicle bureaus, automotive auctions, insurance companies, vehicle repair and service businesses, rental agencies, inspection agencies, and much more throughout the U.S. and Canada.

What Is on a CARFAX Report?

A CARFAX report includes several important areas of information. The title information section is considered the most reliable because the data is on record with the Department of Motor Vehicles in the state in which it is registered.

A CARFAX report can list approximate retail or trade-in value and then lists the:

  • Ownership history
  • Title history
  • Additional history
  • Detailed history

Ownership History

The ownership history section describes how many owners the vehicle has had, the years the vehicle was purchased, length of ownership, where it was registered, and the last reported odometer reading.

Title History

The title history describes any issues that are found regarding the title. Car titles are marked for specific types of damages to alert potential owners to possible problems. The title history shows if the vehicle title has been marked as:

  • Salvage: Whether the vehicle is a salvaged vehicle, not roadworthy, or the repair costs exceed 75% of its pre-damage value. Generally, it cannot be titled in the issuing state again.
  • Junk: Similar to a salvage title
  • Rebuilt: A salvage or junk vehicle that has been rebuilt
  • Fire: Vehicle damage caused by a fire that exceeds its fair market value
  • Flood: The vehicle was severely damaged by water
  • Hail: Hail damage to the vehicle exceeded its fair market value that exceeds its fair market value
  • Lemon: Used when the vehicle manufacturer buys back the vehicle because there are too many issues
  • Not actual mileage: The vehicle seller certifies the mileage on the title when selling the vehicle. This is used when the seller cannot verify or certify the exact mileage.
  • Mileage mechanical limit exceeded: Some odometers cannot roll past 99,999 miles. This indicates the odometer has exceeded its ability to track mileage.

Multiple drivers could mean you’re viewing a car with problems not listed on the report. However, this isn't always the case.

Additional History

In the additional history section of the report, you'll find issues reported by the owner or insurance company about:

  • A declaration of total loss
  • Any structural damages
  • An airbag deployment
  • An odometer check
  • Any accidents and other damages
  • Recalls from the manufacturer
  • The original warranty information

Detailed History

The detailed history section details any reports, services, sales, inspections, or other events. For example, you might find emissions inspections, registration renewals, accidents listed by owner, and where any events occurred.

Limitations of CARFAX Reports

A "clean" report means CARFAX hasn't found any significant issues. However, it may not be as simple as a big green “CLEAN” stamp at the top of the report. CARFAX may not be able to access some information, or previous owners and dealers might find ways to keep events unlisted. There might also be mechanical issues with the vehicle that are not on the report because they were not fixed or reported. It's not unheard of for someone to sell a vehicle in need of costly repairs to a dealer, who in turn only fixes what is necessary to resell the car without reporting it.

CARFAX relies on accident reports from police departments for its data. As a result, the report will likely be very accurate if you’re buying 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 where neighbors agree to pay for damages and take it to a friend for repairs.

Recent accidents from the last few days may not appear on a CARFAX report because it can take some time for police reports to be entered into the systems CARFAX can access.

Some accidents are not reported if the vehicle was taken to a body shop without involving the police. Auto shops tend to report what they fixed, not what happened—so you may only see maintenance or repairs. This might 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.

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. 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, accidents, and how it was used.
  • 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.
  • A CARFAX report should be used in conjunction with a certified mechanic's inspection to ensure there are no issues.

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