How to read a CARFAX Report

by | Feb 10, 2023 | Uncategorized | 0 comments

Hi, my name is Dean Strawn. I am the owner and founder of AutoTrek with over 35 years of experience in the auto industry. For those that don’t know our past, AutoTrek originated as an auto broker and auto club providing the community with discounts and information on auto related products and services. Over the years we have grown and evolved into a credit union auto buying service with a retail location in Littleton. AutoTrek still offers auto club services and today we are going back to our roots by providing some valuable information on how to read a CARFAX report. In addition, we are giving our customers the opportunity to receive a free CARFAX report, on any car they are looking at, simply by contacting us. 

CARFAX General Terms

First, let’s talk about CARFAX in general terms. The CARFAX report provides valuable insight into the history of a vehicle and is a great place to start when considering the purchase of a used vehicle. While the CARFAX is important it doesn’t always tell the entire story. CARFAX is a lot like the evening news, there is a whole lot going on out there, but not all of it gets reported, and what is reported, is only partially accurate. The vehicle history you see on any CARFAX is only what has been reported by government agencies, insurance companies, repair facilities, auctions, and others. Not all incidents, accidents or repairs get reported. Therefore, CARFAX can be used as a vehicle purchasing tool, but should not replace personal or third-party inspections entirely. 

History in The CARFAX Report

Before getting into the body of the CARFAX report, the vehicle history section, it’s important to know that the upper portion of the report provides valuable information about the vehicle, the factory warranty and title history. Here you can learn the fuel type, gas, diesel, hybrid or electric as well as engine size and drive train – rear wheel drive, front wheel drive, all-wheel drive or four-wheel drive. The warranty section will tell you what coverages came from the factory and if there is any remaining balance. A little further down you can also learn if there are any factory recalls. This upper section will also tell you if there are any title brands on the vehicle such as salvage, junk, rebuilt, fire, flood, lemon, total loss, structural damage, airbag deployment or if the vehicle has been reported as not actual miles. It’s always good to spend a few minutes here before getting into the vehicle’s history. For instance, I have discovered a Jeep Wrangler was a rear wheel drive by looking at the CARFAX, when I would have never suspected that it wasn’t a 4×4. A mistake that could have resulted in paying a couple thousand too much for the vehicle! 

Reviewing The Report

When reviewing a CARFAX report, I like to start with the number of owners the vehicle has had. In general, the fewer owners, the better overall condition the vehicle will be in. The guiding principle here is, longer ownership generally equates to a higher satisfaction with the vehicle, which leads to better care, and proper maintenance. I have seen some exceptions with luxury cars and sports cars. For some reason, vehicles in this category often have 5 owners or more and are in excellent condition. I can only conclude that if you spend enough on a car you are motivated to take care of it. 

Vehicle Titles

Next, I look at what states the vehicle was titled in. Vehicles from the upper Midwest, east coast, or near any coastline, tend to have more rust and corrosion. Colder climates where salt is used on the roads or damp salty areas near the coast tend to be problematic. If the vehicle was owned in those areas for more than 2 to 3 years I will pass unless personal inspection proves otherwise. I prefer to buy vehicles from the south or southwest, where the temperate climate doesn’t require the use of salt or sand on the roads. These vehicles tend to be some of the cleanest in the nation. Colorado vehicles fair well, however the use of magnesium chloride in recent years is starting to create some issues in staining chrome trim and alloy wheels. 

Maintenance History

I then look at the vehicles, maintenance history. Regular and recorded maintenance history is a plus. It’s one of those things where, if it’s there, you know, and that’s comforting. When repair history is missing things start to get tricky.  A lack of service records doesn’t mean that the vehicle should be passed on necessarily. In many cases, the vehicle may have received regular maintenance, but from a shop that doesn’t report to CARFAX. Additionally, it could have been serviced by the owner. It’s a bit of a lost art, but many people still do their own routine maintenance. In this case I would test drive and inspect the vehicle thoroughly or consider a third-party inspection from a certified mechanic. If service records do exist, I like to look for reoccurring problems. If the vehicle has been in the shop numerous times for the same issue, that is most definitely a red flag.

Ownership Evaluation

Next, I like to look at the type of ownership/use the vehicle has had. There are several categories of ownership or use: 

  • Personal use/personal lease – A personal use vehicle or personal lease vehicle is your best bet. This means the vehicle was owned by an individual that has a vested interest in caring for and maintaining the vehicle properly. It is human nature to take better care of something you have an investment in and pride of ownership factors in as well. Most personal owners also understand that better care and regular maintenance equals higher resale or trade value when the time comes. 
  • Rental/rental use – A rental can be an excellent value but should be purchased with some caution. Rental vehicles have multiple users and are typically not driven with the same care or concern as personally owned vehicles. Rental vehicles, depending on the agency, can receive very regular maintenance or have factory recommended services skipped altogether to save money. The overall condition of a rental vehicle is likely to have scrapes and scuffs in the cargo area from luggage and will often have some additional door dings and scratches on the exterior. If you can live with a few blemishes, rentals typically sell for less. I wouldn’t rule them out, but I would have them carefully inspected and consider adding an extended service contract/warranty to this purchase.
  • Commercial use – Commercial use vehicles can be a great value or fall into the same category as the rental use vehicle. Some receive excellent maintenance and are carefully driven by corporate executives, while others are put into construction and industrial use. The latter tend to be in rougher condition. How well these vehicles are maintained really depends on the company that leased or purchased them. Look to the CARFAX report or personal and/or third-party inspection to be sure the vehicle was maintained properly. 
  • Government use – In my experience a government owned vehicle tends to be regularly serviced, often have lower miles, and are in good overall condition with some exceptions. Most are sparsely equipped but can offer good reliable transportation. Service records are rarely reported to CARFAX, so rely on inspection to be sure of the mechanical condition. 
  • Taxi/Police use – A taxi or police use vehicle is a no go for AutoTrek. These vehicles typically have very high miles and have seen some tough use. Most often they are well maintained when it comes to the engine and transmissions, but the suspensions components are often worn out and they are the last to be repaired, if at all. Buyers that decide to go down this road  should ask for pricing  well below book value or market value.

Accident History

Lastly, and probably the most heavily scrutinized portion of the CARFAX report is the accident history section. In recent years CARFAX began rating the severity of accidents in 3 categories on a sliding scale from minor, to moderate, to severe. Minor accidents, per CARFAX, are just that and are described as cosmetic in nature. A CARFAX report that showed minor damage would not concern me at all. Regarding the next two categories, CARFAX does not provide much in the way of guidance as to what qualifies as moderate damage or severe, other than you know it’s getting progressively worse. From my own experience, moderate damage appears to be damage that includes the replacement, repair, and the repainting of one or more body panels. This is your typical fender bender that is generally repaired with an insurance claim by a certified repair facility. Damage up to, and including moderate damage, still doesn’t concern me much, however I will inspect the vehicle a little closer. Repairs made to moderately damaged vehicles may affect the resale value, if not done correctly, but should not affect the safety or handling of the vehicle. Carfax damage labeled as severer is more concerning and a hard pass for AutoTrek buyers unless we have firsthand knowledge that the accident was not as severe as reported. From my experience accidents in the severe category have the potential to impact the structural integrity of the vehicle and can cause premature wearing of tires, brakes and suspension components if not repaired properly. Before considering this purchase, I would have the vehicle thoroughly inspected by a certified mechanic and would expect a deep discount. 

CARFAX Reports With AutoTrek

In summary, it is important to remember when reviewing a CARFAX history report that not all accidents get reported and the severity of the accident is not always reported accurately. That is not to say that the CARFAX accident history report is not a valuable tool, however, it should not be relied upon solely. Accidents do go unreported, particularly if no police or insurance companies are involved.  Additionality, the severity of the accident is often reported by those with no experience or clear guidelines on how to rate the extent of the damage. An accident-free CARFAX report doesn’t mean you are out of the woods. I recommend a physical inspection and test drive of any vehicle before making a purchase. Pay close attention to the vehicles fit, finish, and handling while test driving. Dull paint, miss matched paint between body panels, uneven tire wear and poor handling may all be indications of a previous accidents and may warrant further inspection by a qualified third party. One last note, if you intend to purchase a vehicle, sight unseen online, make sure you have a return or exchange policy before doing so.   

AutoTrek provides free CARFAX reports to anyone that wants to complete the form on our website. Simply provide a valid email and the vehicles VIN#, and we will send you a copy of the report free of charge. 


Dean Strawn

(303) 934-5600