You have a vehicle history report in front of you. Perhaps it’s a Carfax or perhaps it’s AutoCheck or possibly a much less expensive option. In either case, you face a wall of data that most appears to have been created for the smart user.
After one demonstration, it’s not difficult. It’s essentially a history of the car as it has been documented officially since it left the factory with every owner, accident, service visit that’s been documented, every title change and more. Your task is to read the timeline and to deduce what story it’s telling.
Every section is broken down with what it actually does mean and what it should get you to stop and think.
Identify what the report is (and is not) about
A vehicle history report gathers information from various sources. Anywhere a car’s VIN is entered, such as a state DMV, insurance company, auto auction, repair shop, junkyard, law enforcement databases and you can’t predict where the information could be made public.
However, there’s a catch. The cheap carfax report only has the information that was reported. A fender bender that is repaired at a non-claims shop that doesn’t report back to these databases, where the owner pays cash, would not be found. Same with many of the common maintenance items performed in local shops.
But a clean report does not necessarily mean a clean car. It indicates that the official log has not contained anything bad. It’s an important difference and that’s the reason why you shouldn’t use the report as the sole basis for your decision.
Now here are some of the actual sections;
Section 1: Title Information
This is typically at the top of the report and is the most crucial part of the whole report.
For a car to be considered a clean title, it has to have a clear title from the insurance company. This is what you should expect to see but it doesn’t mean the vehicle has no trouble ever (only that it never was written-off).
Salvage title is when at some time an insurance company determined that the cost of fixing the car was greater than its worth, and declared it to be a total loss. The car was then sold, usually at auction to the person who could fix the car. If you’re not planning to buy a project car or a heavily-discounted car you intend to do all the work yourself, it is a big red flag if the vehicle is on the verge of salvage.
Rebuilt or reconstructed: A car that has been salvaged but has been rebuilt or reconstructed and passed a state inspection for safe operation. They may be completely sound cars to drive, but they also tend to be priced at a lower rate than a similar clean title car and insurance may be more complicated.
Lemon buyback is when the manufacturer purchased the car back from the owner, typically because it was not possible to repair after several attempts. A number of vehicles are resold after the repair if they are owned by the buyer. There are ongoing issues for others. In any case, you need to know.
If you notice anything but “clean” here, STOP and read the remainder of the report with that in mind. It alters the way you should read everything else.
Section 2: Ownership History
This section enumerates the number of owners the car had, and in some instances the nature of the owner (personal, commercial, government, rental or lease).
But the number of owners in isolation is not so significant. It’s not the car’s age and number of owners that makes it bad, it’s the overall condition. For various reasons, people sell cars that are not related to the condition of the car.
It is the nature of ownership, rather than the number, that is important, and the length of time that each of the owners held it. The car has been through five owners in eight years, some of them for a few months only, so here’s a hint. Perhaps it is an ongoing issue that is being passed down from car to car. Perhaps it has been sold and resold by the dealers several times. In any case, that is a trend to note.
Rental and fleet history should be given a special mention. When cars are rented out they’re ridden hard and ridden fast, with a variety of people who aren’t very motivated to perform routine maintenance checks. Not all former rentals are bad cars, many are serviced on a precise schedule by the car rental company, but it is something to consider.
Section 3: Accident and Damage Records
It’s here that most people look, and it’s not surprising.
An accident or damage event will generally have a date, the type of damage (front-end, rear-end, side, etc.) and an estimate of the severity (if applicable). Some reports will show the amount of the repair estimate.
Typically, a minor car accident — one that resulted in cosmetic damage, for example, from a fender-bender in a parking lot, and estimated at a few hundred dollars — isn’t likely to be cause for much concern. Cars get bumped. It happens.
Things to pay closer attention to:
Several incidents – particularly in quick succession. A single accident is a misfortune. It’s not a coincidence that there have been three incidents in two years in the same car, is it?
Structural damage and/or framing damage. If any part of the report specifically includes damage to the frame, structure or unibody, this is important. No matter how well these repairs are completed, they can impact the car’s handling and the way it can shield occupants in an eventual accident.
Airbag deployment, The airbags must be replaced after a previous accident, not reset. Airbag systems, when they are not properly serviced, could be a serious safety concern and there are a number of shoddy repair shops that take shortcuts at this cost of the airbag modules.
No repair record for damage. If the report indicates the incident, but there is no repair record afterwards, it’s a good question to ask the seller up front. The repair is part of a repair somewhere where it is not reported to these databases, or it was not addressed properly.
Section 4: Odometer Readings
A majority of the reports will contain a timeline of odometer readings from multiple sources such as state inspections, transfers, services records, etc. and insurance claims.
Here you’re looking for uniformity. The numbers should increase over time, gradually and in a pattern similar to the annual mileage that type of driving would result in.
Red flags in this section:
An inferior reading. Most of the time, if it’s 98,000 miles on the report, and it’s 87,000 miles now, you don’t simply have a rounding error or a mistake. This could either be an odometer tamper or a data entry mistake somewhere in the line and you need to determine which before you do any more.
Big unexplained jumps. If one year the car has 40k miles and 95k miles the following year and there is nothing else in the report that would account for that (such as a commercial use period) ask about it.
Or, perhaps the figures don’t add up to what the seller tells you. They state that the car has 75,000 miles on it, but the last service record is for 82,000 miles, eight months ago. That’s no way to run a car and cars don’t go in reverse. The seller is at fault or the odometer has been tampered with.
Section 5: The service and maintenance records
Not all reports contain the level of service information and when it does, it may not be comprehensive — remember, this is information from shops that report to these databases.
If there are service records, they’re actually useful. You will be able to determine if oil changes were made on a reasonable schedule, if larger maintenance jobs, such as timing belt, transmission oil change, or brake job were performed at proper intervals, or if the car was chronically maintained in various shops.
Don’t be afraid that a thin service record means the car is neglected – many people do their own oil changes or go to cash-only service stations. However, a car with a clear and consistent history does lend an element of trust and it is worthwhile to request the car owner to provide documentation or receipts to complete the car’s history beyond the scope of the service history.
Section 6: Recalls
The majority of reports will indicate open manufacturer recalls that are not closed (unclosed) and therefore are not completed yet for the VIN.
This is a relatively easy part. When there is an open recall, it typically indicates that the manufacturer has discovered a safety problem, and the repair is going to be free. All you have to do is bring the car in to a dealer that make for them to take care of it. Although it’s not typically a dealbreaker for you, it’s something you will want to have fixed after you buy it, and it’s important to check if the recall repair is still available (some older recalls have a deadline or become difficult to schedule).
The NHTSA’s website will also allow you to check open recalls that are not reported to you by the dealer, and it takes just about thirty seconds of your time and is free.
Putting It All Together: Reading the Whole Story
This is exactly where things fall apart for most buyers. They read every section on its own and never zoom out. A report makes more sense as a story than a checklist, so ask yourself, taken together, does any of this feel off?
If the title is pristine, the ownership history reveals only one conscientious owner for eight years, the accident history is blank and the odometer reading increases steadily at an appropriate pace and the service history is uniform and then it’s a story of a well-maintained vehicle.
If the title is clean and there are three owners in four years, two unexplained accidents, an odometer jump that doesn’t quite make sense and no service records then forget the same story, it’s another one. All of those in isolation do not make the car ineligible. They collaborate to create a scene of a vehicle that has been passed around due to some issue with the car.
What a Vehicle History Report Can’t Tell You
This is as important as all of the above!
A clean report does NOT indicate that the car is mechanically sound today. It will not tell you whether the brakes are due for replacement next month, if there is a transmission problem that has not yet produced a code, or even if the last owner has been ignoring all the ‘check engine’ lights for a year! Can’t smell the car for mildew and can’t feel if the steering pulls to one side.
Nothing more than the physical inspection and test drive! The report gives you information about the car’s history. The inspection provides information on the current state of the setting. Both really are needed.
Where to Get One and What to Expect to Pay
The two most popular brands are Carfax and AutoCheck, and you will find that when you have serious thoughts on buying a car, the dealership will offer one of them for free. If selling yourself, you’ll have to pay between $20 and $40 per report as some of the sites offer a cheap Carfax report which uses the same databases, but at a lower cost.
You only need the VIN, which is a 17 character code on the dashboard (thru the windshield on the driver’s side), the driver’s side door jamb and the title.
When you’re hoping to get the VIN and the seller refuses to provide it, or outright discourages you from even having a report run, it’s a strong indicator, and typically unfavorable.
Final Thoughts
When reading a report for the first time, you will feel like reading a wall of data. By the second or third one, you will begin to know what’s important and what isn’t. First, title, then accident history, then odometer consistency, then everything else.
Do not use it as a substitute for a physical inspection, test drive or the seller’s judgment. All these tools are rather ineffective when used individually. They’re what you do not want to purchase another person’s issue.
