A history report is like any tool, and there is a limit to what each tool can accomplish. For example, you can't rebuild an engine using only a screw driver. A history report cannot tell you the current condition of ANY components or systems.
1) Not all totaled vehicles end up with negative "reconditioned or salvage" titles. A Carfax report will show if a vehicle was totaled only if two things happen. First, someone has to create and submit the paperwork which changes the status of the title, and second, Carfax must retrieve that information. If the paperwork was never submitted to the State's DMV, the title will never be changed. For example, State Farm was sued for not reporting 32,000 to 40,000 totaled vehicles to the State's DMV. Since the titles were never changed, these totaled vehicles were patched together and re-sold to the public with the original "clean" title and a "clean" Carfax report. State Farm was found guilty and agreed to pay $40 million in fines. Automotive experts estimate State Farm made between $60 to $80 million buy not reporting these vehicles to the DMV. This is an easy way to achieve high profit margins and this is not an isolated incident.
In addition, Carfax fails to inform their customers that there are States that do not report negative comments on their titles. These titles will not show any past problems such as "salvage, rebuilt, true miles unknown, theft recovery, etc..." Carfax's buyback guarantee is not enforceable since the title was never changed to "totaled".
2) There is no centralized database for accident reports or accident repairs. Not all insurance companies disclose or share their accident information to Carfax. Carfax admits that there are thousands of accidents each day which will never show up on a Carfax report. Even if Carfax reports an accident, it cannot inform the buyer the extent of the accident damages, or the quality of any repairs.
3) There is no centralized database for automotive repairs. Carfax does not have any type of reporting mechanism to obtain automotive repairs that are performed each day by franchise repair facilities, independent repair facilities, used car dealers, auction reconditioning, wholesalers, shade tree mechanics, and the millions of do-it-yourselfers. Many Carfax reports show little or no repair information compared to the hundreds of thousands automotive repairs performed each day. Even if Carfax reports a repair, it cannot tell if the problem was fixed correctly or if there are additional mechanical/electrical problems with the vehicle.
4) Carfax does not verify its information. Carfax does not verify the information provided by its sources. Today's vehicle identification number (VIN) is comprised 17 letters and digits. It is easy to input an incorrect VIN or mileage or other identifying information. Any mistake can cause a Carfax report to wrongly show "mileage discrepancies, airbag deployment, accident damage, salvage, etc...." Any database manager will tell you, "garbage in, garbage out".
5) Used car dealers know the limitations of a Carfax report. Some dealers knowingly buy vehicles with frame and accident damages but have a "clean" Carfax report. They sell these damaged vehicles to unsuspecting buyers by showing a Carfax report with "no structural damage reported" and "no accidents or damage reported to Carfax".
6) Carfax can't tell you who owns the vehicle. Carfax does not tell you who currently owns the vehicle. Carfax only displays the registration state. You have to contact the DMV to determine who owns the vehicle.
7) A State's annual safety and/or emission tests are not a pre-purchase inspections. A Carfax report might show that a vehicle passed a States' annual safety and/or emission test. However, these annual safety and/or emissions tests do not cover most mechanical and electrical systems. A previous safety and/or emission test cannot tell the buyer the current condition of any component or systems.
8) Carfax is a "history" report, not a "current" report. There will always be a time lag from when a negative incident occurs and when (or if) it get into a Carfax report. This time lag can be significant and allow a damaged vehicle to be re-sold before Carfax reports the negative information.
9) Carfax reports are expensive for the small amount of useful information. A Carfax report sells for $40. Pay that amount and 1) you can't be 100% sure if the vehicle was ever in an accident 2) if the vehicle was abused or well maintained, and 4) the existing condition of ANY mechanical or electrical system.
10) Carfax is not consumer friendly. There are many consumer internet sites full of complaints and problems with Carfax. If you have a complaint or see a mistake on a report, you must contact them via email and wait for them to respond (Carfax does not allow phoned in complaints). Carfax will not perform an investigation when you dispute a negative report. Carfax requires the consumer to get documentation disputing what Carfax has in its database. Obtaining proof is usually tedious and time consuming. Some errors are impossible to dispute especially if the reported information is erroneous.
11) Carfax hides behind their disclaimer. Many Carfax customers have purchased used vehicles with a "clean" Carfax report only to discover existing problems and accident damages resulting in a financial loss. When confronted by their customers, Carfax refers them to read their disclaimer.
12) Perception is reality to the used car buyer.
The perception created by Carfax, and hyped by used car dealers, lead consumers to believe that if the Carfax report is “clean” they eliminated the risks when purchasing a used vehicle. Carfax touts it has over 92,000 different sources (USA and Canada). However, that's less than 25% of the estimated automotive industry sources for vehicle information. - Inaccurate History Report cost buyers
A history report is like any tool, and there is a limit to what each tool can accomplish. No history report can determine the current condition of a used vehicle.
You cannot negotiate your best deal unless you know the exact condition of the vehicle. The ONLY way to determine the current condition of all the mechanical, electrical, body & frame is to have it professionally inspected by an ASE Certified Master Technician for all the mechanical and electrical systems, and Body & Frame Specialist for accident damage.
Read more about consumer complaints against Carfax: