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Carfax Review by Car Dealer

Carfax Review

As a former car dealer, I get asked all the time if services like Carfax are really necessary when buying or selling a used car.

The short answer – it can be extremely valuable but it doesn’t tell the whole story.

Keep reading to fully understand what Carfax offers, what it misses, who can benefit, and ultimately, whether it’s worth paying for vehicle history reports or not.

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What Does a Carfax Report Include?

When you purchase a Carfax report on a used vehicle, you gain access to a wide range of historical information tied to that car’s unique VIN number, such as:

  • Past accident and damage history, including severity and location
  • Number of previous owners
  • Odometer readings and indications of potential rollback fraud
  • Maintenance and repair records from participating shops
  • Salvage/flood title status
  • Open recalls requiring repair

This data comes from over 112,000 sources like state DMVs, insurance claims, police reports, and certain dealers and repair shops. It can serve as an incredibly useful indicator of how well a vehicle was cared for and identify big red flags.

Key Takeaway: A clean Carfax report adds transparency into a used car’s past, quickly screens out flood cars and rolled back odometers, and shows regular maintenance.

What’s Missing from Carfax Vehicle Histories

However, there are also some significant gaps in what Carfax can report:

  • Not all accidents make it into the reports – Minor fender benders often go unreported to insurers so may not show up. Sellers may try to hide major repairs off the books too.
  • Large gaps in service records – Just because 6 years of oil changes don’t appear, doesn’t mean they weren’t done. Many smaller shops don’t share data with Carfax.
  • Details lacking on repairs – You can’t tell if “brake inspection complete” was comprehensive or cursory. Reach out to the shop for full invoices.
  • Auction announcements not included – Inside information at dealer-only auctions regarding engine/transmission defects stays private.
  • Current mechanical condition unknown – Carfax only provides historical records, not a crystal ball into current problems.

Key Takeaway: Carfax reports are an invaluable screening tool but should never replace an in-depth inspection by a trusted mechanic before purchase.

Who Gets the Most Value from Carfax?

Overall, Carfax vehicle histories favor buyers more than sellers.

As a buyer, having that independent report adds confidence in negotiations, justifies a lower offer price if issues are found, and prevents expensive surprises down the road.

For sellers, a clean report helps advertise your car and adds legitimacy. However, unreported accidents or repairs showing up later could still derail a sale. Regardless, every seller should make their Carfax available.

Hiding it is a red flag.

In my experience selling hundreds of used cars, the most valuable customers were:

  • First-time used car buyers lacking mechanical know-how
  • Parents buying for high school or college-aged children
  • Anyone moving from leasing into owning older, higher mileage vehicles

These groups leaned heavily on Carfax histories to compensate for less automotive experience. It helped them feel in control by giving them data.

Key Takeaway: Carfax reports benefit used car buyers the most, especially first-timers lacking confidence and mechanical experience.

Cost – How Much is a CARFAX Report?

Despite the gaps, Carfax packs tremendous value. A single report costs $39.99. You can also get 3 for $59.99 or 6 for $99.99. Many dealers include a report for free on their listings.

Some alternatives that are cheaper but less thorough include:

  • AutoCheck – $24.99 per report but greater inaccuracies
  • National Insurance Crime Bureau – Free VIN check for stolen vehicles

There are no reliably free options comparable to Carfax unfortunately. Even paying dealerships for reports comes out of profit margins ultimately impacting car prices across the board.

Key Takeaway: $40 for a Carfax report is reasonable considering the wealth of data provided, and “free” alternatives lack severely in comprehensiveness.

My Experience With Carfax Reports As a Dealer

As a dealer, I used Carfax on every single vehicle we purchased and every vehicle we were thinking of buying.

Additionally, we provided a Carfax report to our potential buyers as a sign that we were never trying to hide anything from them, which helped to build the trust we needed to make a sale.

Overall, the biggest benefit of a Carfax to me as a dealer was when a car had no accidents or damage reported, which is referred to in the industry as a “Clean Carfax“. These reports made the vehicle more desirable and, therefore, easier to sell at a higher value.

I have to say that as a dealer, I was very happy with what Carfax was able to do for my business, but like you, I certainly wished they were a bit more affordable.

The Verdict – Is Carfax Worth Paying For?

Carfax isn’t perfect. However, the transparency and multi-source data it offers used car buyers and sellers is extremely valuable during negotiations and to avoid potentially dangerous or expensive hidden vehicle issues.

For most people, Carfax’s benefits justify the reasonable one-time report cost. Just be sure to still get a mechanical inspection from a trusted mechanic before finalizing any purchase.

Ultimately both buyers and sellers are better off having a Carfax report than not. Let me know if you have any other questions!

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Steve Momot - Author

Steve Momot - Author

Steve, a seasoned expert in the automotive industry, formerly held a car dealer license in Florida. With extensive experience spanning across car trading and mechanical work, he founded Autohitch. His mission? To guide both buyers and sellers through the intricate maze of car purchasing, ensuring a seamless and informed experience. Outside of the automotive world, Steve has a passion for fishing and capturing the beauty of nature through photography.

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