A history report cannot tell you the current condition of ANY component or system. Therefore, you cannot determine the value of the vehicle without a professional pre-purchase inspection.
1) Not all totaled vehicles end up with negative "reconditioned or salvage" titles. A Carfax report will show if a vehicle was totaled when two things happen. First, someone must create and submit the paperwork that changes the title's status, and second, Carfax must somehow have access to that information. If the paperwork were never submitted to the State's DMV, the title would never be changed. For example, State Farm Insurance 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 by 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 some States do not report negative comments on their titles. These titles will not show past problems such as "salvage, rebuilt, true miles unknown, theft recovery, etc..." Carfax's buyback guarantee is not enforceable for vehicle titles that 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 thousands of accidents each day will never show up on a Carfax report. Even if Carfax reports an accident, it cannot inform the buyer of the extent of the accident damages or the quality of any repairs.
3) There is no centralized database for automotive repairs. Carfax has little access to automotive repair information performed 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 of automotive repairs performed each day. If Carfax reports a repair, it cannot determine if the problem was fixed correctly or 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 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 pre-purchase inspections. A Carfax report might show that a vehicle passed a States' yearly safety or emission test. However, these annual safety or emissions tests do not cover most mechanical and electrical systems. Pevious safety or emission test cannot tell the buyer the current condition of any component or system.
8) Carfax is a "history" report, not a "current" report. There is a time lag from when an incident occurs and when (or if) it gets 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 helpful 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 a response (Carfax does not allow phoned-in protests). Carfax will not perform an investigation when you dispute an unfavorable report. Carfax requires the consumer to get documentation refuting 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 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 the 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 (in USA and Canada). However, that's less than 25% of the estimated automotive industry sources for vehicle information. - Inaccurate History Report cost buyers
Conclusion:
A history report is like any tool, and there is a limit to what each
device 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 state of all the mechanical, electrical, body & frame is to have them 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:
The Problems with Carfax. - Lehto's Law
ABC report "Carfax: Are the reports reliable?"
Consumer Affairs "Inaccurate History Report cost buyers."