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Consumer Reports: Used-Car-Histories Often Inaccurate

How to spot a lemon before you're stuck with it

June 10, 2009

Carfax • Public Citizen Objects to Carfax Settlement • CARFAX: Not Always All the Facts • How Can Used Car Buyers Protect Themselves? • CARFAX Settles Class Action Lawsuits • How To Contact CARFAX • CARFAX History --- Consumer Complaints • "Unlimited" Service • Inaccurate Reports • Refund Policy • Advertising Claims • Sellers' Complaints

If you take the precaution of ordering a report before buying a used car, you may be disappointed. An investigation of used-car-history reports by Consumer Reports finds many reports returned "clean" results for damaged cars.

To test the veracity of history reports, CR ordered them for dozens of damaged vehicles advertised online. The vehicles' owners disclosed serious dents or other accident-related damage along with vehicle identification numbers (VINs) and photos.

Some damaged cars got "clean" reports sometimes from all five services: Carfax, AutoCheck, the free VINCheck from the National Insurance Crime Bureau, and two services providing information from the federal government's National Motor Vehicle Title Information Systems database.

In most cases, the titles for those vehicles were not branded with the word "salvage" or any other term to indicate that they had been in a wreck.

"Salvage" or similar branding on the vehicle title, is required by many states for most vehicles with extensive damage. But even extensively damaged vehicles can escape the "salvage branding." That can occur, for example, if the car isn't covered by insurance or was owned by a rental-car company.

"Many dealerships provide free history reports to consumers," said Anthony Giorgianni, associate editor, Consumer Reports. "The reports provide useful information. But it's what they can miss that should worry you."

Clean-title wrecks are popular at auctions because buyers can repair the vehicles and then resell them to unsuspecting customers. Based on CR's findings, Carfax says it will begin looking at online advertisements for such vehicles and see if it's possible to include the results.

The discrepancies can work both ways. A number of people who were trying to sell their cars have complained to ConsumerAffairs.com that Carfax had mistakenly listed their car as having been in an accident when it had not.

In January 2007 Carfax settled a class action suit with consumers who charged that Carfax misled them into believing that its reports contain complete information about vehicle histories. The settlement provided that Carfax must include a prominent warning in its marketing materials that its reports may not be complete.

How to check out a used car

• Have the vehicle inspected. Before you buy a used car, take it to an independent mechanic to have it checked for any evidence of prior damage.

• Don't skip the test drive. Make note of unusual squeaks and rattles. Check the backs of body panels and door jambs for paint overspray, a signal that the car might have had body work.

• Ask the seller for a history report. If the report isn't recent or you suspect it has missing or fabricated information, verify it with the service.

• Be redundant. Just because one report is clean, another might not be. If you are not provided with a report from the seller, check with the free or inexpensive services first. Remember, even clean reports from all services don’t guarantee that the vehicle doesn’t have damage or other problems.

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