How Does Information Get On a CARFAX Report?
By Chad Upton | Editor
It’s not unusual for somebody to completely destroy their car and walk away unharmed.
This happens because newer cars are designed to crumple on impact, just like a bike helmet made from dense foam. The frame, hood and even the power train components absorb the energy from the impact in order to help protect the occupants. Of course, air bags may also deploy, which protect the occupants from hitting hard surfaces inside the vehicle.
When an insurance company declares a car as a “total loss” it means they are not going to pay to fix the car; although, they may sell the vehicle to somebody who plans to use it for spare parts. That person may then fix the car and try to sell it.
Unfortunately, a car that has been in a major accident may have hidden safety and reliability problems. So, if you’re buying a used car, you’ll want to know its history.
If you’ve ever looked at a used car, you’ve probably come across CARFAX.
It’s a service that provides historical information about used cars. For $35 or less, you can enter the VIN (vehicle identification number) of a used car and get a report about its ownership, accident history, mileage discrepancies, lemon status, flood damage, fleet use (taxi, police…etc) and many other things the seller may not want you to know.
I think this is a great idea, but I’ve always wondered how they get all the information.
I was talking to a guy that runs an auto body shop, so I asked him. He said that he has done work on cars that were nearly totaled and the information did not show up on CARFAX; he had also done minor work that has shown up.
He said that CARFAX buys info from insurance companies and other sources. Some insurance companies have a non-disclosure agreement, where they will not disclose information about your car and its accidents while other insurance companies are willing to sell that information to make money.
I verified this information with CARFAX and it’s true. CARFAX gets information from thousands of sources and has over 6 billion records on file. They have deals with motor vehicle bureaus in every US State and Canadian Province, where they get information about mileage, flood damage, titles, lemon buybacks, accidents, thefts, liens and ownership transfers.
They also get information from auto auctions, car dealers, repair and service facilities, rental companies, state inspection stations, fire departments, law enforcement, car manufacturers, import/export companies and many others. That’s not to say that all companies of these types provide this information, but many do.
In some cases, they have mutually beneficial relationships. For example, car dealers may provide information about vehicles they service, but they may also request information about used cars that they want to take as trade-ins, buy at auctions or sell to their customers.
In any case, CARFAX warns that they may not always have all of the information, since there are many sources that they do not have access to. In 2005, they had 6,100 sources of information. Now, they have grown to over 34,000 sources.
CARFAX does provide a couple of free services that may be worth while if you’re purchasing a used car. The Lemon Check is one of them. This free service, will tell you if the car you’re about to buy was ever declared a lemon, meaning it was serviced for the same problem 3 times and bought back from the owner by the manufacturer. You definitely want to avoid a lemon.
You can also perform a record check with CARFAX for free. This will tell you how many records they have on file for the VIN you entered. If you’re thinking about buying a CARFAX report, you should try this free option first to see if it’s worth buying the report about the car you’re interested in.