How to Read a CarFax Report

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A CarFax report is a background check on a vehicle. Using the vehicle identification number unique to each vehicle, the report provides detailed information on everything from ownership info to accidents to the vehicle’s title history.

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Help with a CarFax Report

A CarFax report is an important step in judging a used car's viability and history. Photo ©

A CarFax single report costs $24.95, while a 30-day pass is available for $29.95. Get the latter unless you are positively, absolutely sure you’re only going to have one car researched. The beauty of CarFax is the reports are available instantaneously.

Millions of people obtain CarFax reports every year, but do they all know what they’re getting and the right way to read a report? To help make these reports easier to understand, here is a step-by-step guide to understanding a CarFax report. The following is based from a sample CarFax report provided by the website.

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CarFax Vehicle Make & Model Info

A vehicle identification number, or VIN, unlocks a lot of information about a vehicle's past. It is an absolute must have when purchasing a used car. Photo ©

Check the vehicle identification number or VIN, which is located inside the windshield on the driver’s side. You may have made a mistake when initially entering the information. Double check that you’re referring to the same car.

Look at the engine information. This report says it’s a 3.0 liter V-6 PFI DOHC 24V – or in layman terms the engine measures 3.0 liters in size. It has six cylinders with port fuel injection and 24 valves. This information is valuable if the owner has misrepresented the make or model of the vehicle. The 3.0-liter V-6 in the Solara happens to be the biggest engine it offers, but an unscrupulous owner could have claimed it had a V-6 when in reality it had the smaller 2.2-liter four cylinder engine.

Standard Equipment/Safety Options: Not as valuable information because it could be obtained from anywhere.

CarFax Safety and Reliability Report It’s a shame this information is not on the front page of the CarFax report because it is extremely valuable. This Solara had strong safety ratings but potential reliability problems that might get overlooked.

The compilation of safety information on the vehicle is a MUST read. It lists information from the National Highway Transportation Safety Administration, the Insurance Institute for Highway Safety and the Highway Loss Data Institute. The latter is valuable because it’s going to tell you your risk of injury in an accident as well as the cost of repairs. Both scores are based on an average of 100. Any numbers in the triple digits should cause you concern. Most people overlook these numbers.

Another MUST read is the reliability section, especially for the Identifix Reliabilty Ratings. The report on the Solara listed potentially expensive engine problems. The Intellichoice Cost of Ownership & Value Rating lists the cost of ownership for the car, in this case from 2001-2005.

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CarFax Summary Information Part 1

Ownership history, while never a 100% accurate predictor of future performance, gives a sense of how the vehicle was most likely treated. A privately-owned vehicle would be more desirable than a used taxi. Photo ©

Ownership History: Year purchased is self-explanatory. Dealers sometimes opt to take ownership of a vehicle and are required to in the following states: Maine, Massachusetts, New Jersey, Ohio, Oklahoma, Pennsylvania and South Dakota.

Type of owner is important. This car was bought as a corporate fleet lease. Looking at the type of ownership combined with the miles driven indicates in this case it was a relatively low-use vehicle. Use this information to have your mechanic check for problems associated with low-mileage driving.

Owned in the following states is important if the vehicle relocated a lot in a short time. It could indicate a car may have received a salvage title in one state, been repaired (usually to less than exacting standards) and then moved to be retitled. Some states allow new titles for salvage vehicles.

Estimated miles driven is just a nice little factoid. You could arrive at the same figure with a calculator.

Last reported odometer reading

Title Problems This car is clean and guaranteed by CarFax. Read the fine print, though. CarFax will buy this car back, but only under very specific guidelines. The most important thing you must do is register this vehicle if you buy it. Not registering the car means you have no protection if title problems turn up later.

Salvage: This is a vehicle that is damaged to more than 75 percent of its worth. Things get somewhat tricky because 10 states (AZ, FL, GA, IL, MD, MN, NJ, NM, NY, OK and OR) use salvage titles to identify stolen vehicles, according to CarFax. Further clarification would be needed on titles from those states.

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CarFax Summary Information Part 2

Junk: Similar to salvage title, some states use this title to indicate a vehicle is not road worthy and should not be titled again, according to CarFax. Run away from any vehicle with a junk title unless you’re buying it solely for parts.

Rebuilt/Reconstructed: You’d have to be getting an extremely good deal to buy a car with this kind of title. It’s usually a salvage vehicle that has been fixed. As CarFax points out, they’re usually fixed with refurbished parts. Not all states require an inspection before the car returns to the road – yikes!

Fire/Flood: Never buy a car that has been water logged or burned. It’s just not worth it, regardless of how great the price is.

Hail Damage: This rarely indicates a mechanical problem – unless the car’s hood was left open during a hail storm. This points to potential problems with the body and paint that could lead to rust and other metal fatigue issues. A decision to buy a hail car should only be done in consultation with your mechanic.

Buyback/Lemon: Just because a car doesn’t have this kind of title doesn’t mean there weren’t problems with it. Not all states issue buyback titles when a manufacturer takes a car back from a consumer. Also, lemon law thresholds vary by state. Don’t get lulled into a false sense of security on this.

Not Actual Mileage: This means the seller has certified that the odometer reading doesn’t match the vehicle’s true mileage. Could be because of a new engine. It could also mean the odometer was tampered with, broken or replaced, according to CarFax.

Exceeds Mechanical Limit: This sounds worse than it is. Simply means if a vehicle reads 45,148 miles and it’s 15 years old it has a five-digit odometer and the actual mileage is 145,148.

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Other CarFax Information

Any report of an accident should send off warning bells for the mechanic who will eventually inspect this car if you decide to buy it. However, a lack of an accident report does not mean this vehicle was never involved in a collision. Photo ©

Total Loss Check: According to CarFax, not all total loss vehicles (where the damage exceeds 75% of the value) get a salvage or junk title. Don’t buy a vehicle that has been declared a total loss, regardless of what the seller tries to tell you.

Frame Damage Check: This is a warning that absolutely needs to be checked out by a mechanic with expertise with frames. This particular car was in an accident where it rear-ended another vehicle, but no frame problems were indicated. It’s still worth having the mechanic look for frame damage.

Airbag Deployment Check: This is extremely important – not just because it indicates the car was in an accident and needs further inspection. You need to have your mechanic make sure the airbag was replaced. Unscrupulous body shops may not do the work.

Odometer Rollback check: This dovetails with the last reported odometer reading. There are reasons for discrepancies, but make sure they jibe with your mechanic’s inspection.

Accident Check: Cars can be fixed after accidents. It obviously happens all the time. Use this info, combined with the details provided about the accident, to pinpoint what your mechanic should look for.

Manufacturer Recall Check: If you skipped over the CarFax safety and reliability report at the top of the inspection report, you would get a false sense of security from this clean bill of health. It’s true that Toyota never recalled this car, but it issued an eight-year unlimited mileage goodwill repair for problems with engine oil gelling, according to the reliability report. A goodwill repair is an acknowledgment by a manufacturer that it will fix a problem, but it’s not a recall.

Basic Warranty Check: It means the manufacturer no longer covers this vehicle. You’re responsible for all future repairs outside of any warranty offered by the seller.

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CarFax Details

The devil's in the details. Information about the type of accident helps your mechanic zero in on potential trouble spots. In this case, the mechanic would check the frame and front end with extra zeal. Photo ©

With this Solara, we learned that it had been in an accident with a police report issued, it sold in 14 days as a used car (which probably means it was in good shape because that is a quick turnaround), and it has a loan or lien on it with the current owner.

The most important part of the details report is the commentary from the accident reported. This unlucky owner was apparently involved in an accident on Memorial Day 2003. His or her car was then inspected three days later. Unfortunately, there is no indication of the severity of the damage. This vehicle could have had damage up to 74% of its value, but there is no way to know. (NJ police reports are required, CarFax says, when damage exceeds $500).

Odds are good damage was moderate or minor. CarFax reports a 2007 report from the National Safety Council that says 7 percent of registered vehicles were involved in an accident in 2005. More than 75% of those were considered minor or moderate.