This article is the archived version of a report that appeared in the July 2009 Consumer Reports magazine.
When Lezlie Simmons, a homemaker from San Jose, Calif., bought a 2007 Toyota Camry last July, she relied on the "clean" Carfax history report that the dealership provided as proof that the vehicle was accident-free. She has since discovered that the vehicle had been in a major accident. It has needed $4,000 in repairs, and her car's factory warranty might be void. Simmons has hired a lawyer to try to get her money back from the dealership.
Many dealerships provide free history reports to consumers. Those reports provide useful information, but it's what they can miss that should worry you.
To test the veracity of history reports, we ordered them for dozens of vehicles advertised online. The vehicles' owners disclosed serious dents or other accident-related damage, along with vehicle identification numbers (VINs) and photos.
Many reports returned "clean" results, sometimes from all five services: Carfax (www.carfax.com), AutoCheck (www.autocheck.com), the free VINCheck from the National Insurance Crime Bureau (www.nicb.org), and two services providing information from the federal government's National Motor Vehicle Title Information Systems database (www.nmvtis.gov).
We found that the reports were most likely to be incorrect for vehicles that had serious damage but for various reasons were not declared a total loss.
"Salvage," or similar branding on the vehicle title, is required by many states for vehicles with extensive damage. Wrecks can maintain clean titles if the vehicle doesn't have collision insurance; is self-insured, as with many rental and fleet vehicles; or has damage falling just below the "total loss" threshold, which can vary by state.
Clean-title wrecks are popular at auctions because buyers can repair the vehicles and then resell them to unsuspecting consumers.
Based on our findings, Carfax says it will begin looking at online advertisements for such vehicles and see if it's possible to include the results. Consumers Union, the nonprofit publisher of Consumer Reports, would like to see all commercial history-reports services follow that practice.