Ok, so I had a weird experience which led to me finding out some stuff about Carfax. I guess the first sign that something seemed fishy with their records was when I bought a 2000 S10 that had clean records but had obviously been in a wreck, but I digress.
A couple years ago my wife was driving our brand new CR-V and was in an accident. The other driver was found 100% at fault and all repairs to our vehicle were covered. The damage was significant and cost upward of $10k. Even though I paid nothing out of pocket, the thought crossed my mind that my vehicle suffered significant loss of resale value since the accident would be on the Carfax report. This led to discovery of something called “diminished value” claims. Most states allow for folks to claim diminished value in these situations to cover the loss of value beyond structural damage. I paid a guy $200 to write up a fancy report documenting how much less my vehicle was worth post-collision and started going after the other driver’s insurance company. It took a good 7 months before I ended up settling for $2500 to cover about half of what I started off asking for. The reason I had to settle for so much less was that nothing ever showed up on the Carfax report. This significantly damaged my negotiating power, but I guess it’s good that it’ll have a clean record.
Having a clean report was very strange to me since the accident was pretty severe. There was no frame damage, but the entire front end needed replaced. Anyway, I did quite a bit of digging to figure out why a bad accident that had been documented in a police report as well as insurance records, and body shop records didn’t show up in the Carfax report. It turns out that Carfax mostly relies upon law enforcement departments to provide records of accidents. They must pay departments a fee for access to partial reports. I doubt they have deals with all local departments and some smaller cities are probably pretty poor at sharing records even if they do have a deal in place. It doesn’t sound like they get much info from other sources. My body shop said that even if they did share info it’d just show up as being a service appointment. I don’t think insurance companies share info and the DMV doesn’t even keep track of those records in my state. All they did was record that my wife was in an accident and didn’t tie it to any particular vehicle. To sum it up, I think it’s good due diligence to get a Carfax report. However, that data should be taken with a grain of salt and you’d be wise to have a body shop look over any used car that you’re thinking of buying. Those guys are experts at picking up signs of repairs that were made. I’d rely more upon them than a mechanic for newer vehicles.
