Understanding a CarFax Report
Ready to embark on the journey of purchasing a pre-loved vehicle?
Well, buckle up because today, we're diving into the world of CarFax Reports.
Buying a used car is a significant investment, often requiring substantial funds and long-term financing commitments. Discovering post-purchase issues like severe accidents, flood damage, or poor maintenance can be a nightmare scenario. Thankfully, obtaining a CarFax report, also known as a vehicle history report, can unveil such red flags before committing to a purchase.
While a test drive provides valuable insights, a CarFax report delves deeper, revealing hidden issues that may not surface during a test drive or standard vehicle inspection.
In this article, we'll explore why obtaining a CarFax report is essential for making an informed vehicle purchase decision. We'll discuss what to look for in a CarFax report and explore alternative options to ensure you have all the necessary information before making your big decision.
What Is a Carfax Report?
CarFax, a global leader in web-based vehicle history reports, has been at the forefront since 1984. Operating in Canada, the United States, and Europe, CarFax compiles an extensive database that gives potential buyers a detailed insight into a used vehicle's history. A CarFax report can be thought of as a time-traveling companion, offering a glimpse into a vehicle's past before it becomes part of your future.
What Can You Find in a Carfax Report?
A CarFax report, which includes a Vehicle Identification Number (VIN), offers a wealth of information, including:
- Accident History
- Safety Recalls
- Registration History
- Service History
- Odometer Reading
- Title History
- Import Records
- Vehicle Color
- Optional lien check, although it might not always include information on the lien holder
- Sale history, detailing when and where the vehicle has been sold
Take a look at the CARFAX for our 2014 Ford Escape that we have sale!
The Quick Summary
The photo above is a snapshot of what a quick summary looks like on a carFax report. It gives a quick summary of the vehicle history and is at the beginning of a carFax. This includes a breakdown of:
Whether the vehicle has been in an accident
Number of owners
Maintenance records and open recalls
Odometer reading
Title type
Where the vehicle was last registered
Type of vehicle (fleet, commercial, personal, etc.)
At first glance, the summary may provide deal-breakers or red flags. Still, it's a great starting point to know where to look in the various sections of the report.
Accident History
Always read the accident history to avoid buying a lemon or a vehicle with significant structural or mechanical problems. This will show if the vehicle has:
Been declared a total loss (salvage or branded title)
Had its airbags deployed
Suffered structural damage
Been in an accident or has other damage (aside from structural)
Acceptable Accident History and Red Flags
Merely because a vehicle has undergone a claim or been involved in an accident does not automatically disqualify it from your consideration. Claims often encompass cosmetic or routine repairs that do not compromise the mechanical integrity of the vehicle. Examples of an acceptable accident history might include:
- Windshield repairs due to cracking, chipping, or isolated incidents. An accident claim for glass is acceptable as it likely pertains to the replacement of the windshield or window, having no impact on the mechanical functionality of the vehicle.
- An accident claim under $3,000 is deemed acceptable as it typically involves bodywork. Door and bumper repaints at most body shops can cost between $1,500 and $2,000. Such accidents usually entail cosmetic bodywork and do not affect the mechanical or structural operation of the vehicle.
Conversely, accident claims exceeding $3,000 or those lacking a specified dollar amount should raise red flags as they likely involve a major accident resulting in severe mechanical or structural damage. Moreover, the cost of insurance repairs is often steep and discretionary — it's advisable to approach them with caution. Structural damage, significant mechanical repairs, airbag malfunctions, and accident-related issues can incur exorbitant repair costs, sometimes making the purchase of a pricier yet undamaged vehicle the more prudent financial choice. However, if you have access to a reputable mechanic or possess DIY skills, you might leverage this knowledge during negotiations.
Odometer Reading
The odometer reading documented in the CarFax report is crucial to monitor due to the risk of rollback fraud. Rollback fraud, also known as odometer fraud, occurs when the seller manipulates the odometer to inflate the vehicle's value.
Thankfully, a CarFax report provides the last recorded odometer reading from reliable sources. By comparing the kilometers on the report to the current odometer reading, you can protect yourself from falling victim to rollback fraud.
Where the Vehicle Has Been Registered
While the province where a vehicle has been registered might appear trivial, frequent registrations in different provinces could raise concerns. Some dishonest sellers, including curbsiders, may employ a tactic of purchasing flood-damaged or fire-damaged vehicles (which may not always be reflected in CarFax reports) and registering them in distant provinces to evade suspicion. Additionally, car thieves often utilize a similar strategy to elude authorities and deceive unsuspecting buyers.
Additionally, if the last province listed is not your own, the vehicle will likely require an out-of-province inspection. Ensure you know the last province the vehicle was registered in. If it is out of province, determine who is bearing the costs for the inspection, as it is more in-depth and could incur higher costs for you as the consumer.
Note: For vehicles registered in British Columbia, requesting a different CarFax report than the standard one is necessary, as insurance is handled by the Insurance Corporation of British Columbia (ICBC). The cost for this supplementary report is $20.
Service History
The service history is another crucial aspect of the CarFax report. Neglecting regular maintenance may not immediately affect the car's performance, but it could lead to issues down the road.
A comprehensive service history indicates that the previous owner maintained the vehicle properly. Thorough record-keeping suggests a higher likelihood of the vehicle being in excellent condition.
Note: Not all service centers are linked to CarFax, so some servicing may not appear in the report. Asking the seller for a detailed list of service records can provide further insight into the vehicle's maintenance history and help guide your purchasing decision.
Lien Check
If the previous owner still owes money on the vehicle, the CarFax report should indicate a lien against it. To safeguard against fraud or registration complications, ensure the seller provides a lien release from the lender. The name on the lien release should match the name on the title and any other documentation related to liens, financing, or payoff information for the vehicle.
Note: If you purchase a vehicle with a lien, you may be held liable for any outstanding costs associated with it. Make sure not to make ANY payment on a vehicle with outstanding liens unless you have obtained the release letter issued by the same bank that holds the lien.
How Much Does a CarFax Report Cost?
At the time of writing, here is the pricing for CarFax history reports in Canada.
$50.95 for a vehicle history report.
$69.95 for a report with a lien check.
$112.95 for three vehicle history reports and one lien check.
CarFax Alternatives
While CarFax is a market leader, alternatives like AutoCheck and VINAudit provide similar services. AutoCheck offers an AutoCheck Score for future reliability predictions, and VINAudit is a cost-effective option, starting at $14.95 per report.
Free VIN Checks
Organizations like the Insurance Bureau of Canada (IBC) provide free VIN checks, offering information on water damage. You can also check if a vehicle is stolen through the Gov of Canada website. CarFax's free VIN decoder gives key vehicle details but lacks historical data.
In the intricate dance of purchasing a pre-owned vehicle, a CarFax report is your trusted co-pilot. It is your insight into a vehicle's life story. With transparency and detail, it empowers you to make an informed decision, ensuring that your drive is not just about the destination but the journey itself. Trust in the CarFax report to be your reliable companion as you navigate the exciting world of pre-owned vehicle purchases!