With the price of new and previously owned vehicles still at eye-watering levels, buying and selling a car has become a lot more complicated than it used to be. The high costs have also made the trade-in value of your existing vehicle a crucial aspect of any deal. Getting the most out of your old car is increasingly the only way to make the purchase of a new car possible, and a lot of folks go into a car dealership counting on that trade-in. At the same time, the rising value of used cars has prompted folks to see them more as an asset, and anticipate a nice price when they decide to sell it.
A common step in any vehicle transaction these days is to check the Carfax (or Autocheck) vehicle history report (VHR), which will show you how many owners a car has had, possibly maintenance records, and any accidents the car was involved in. These reports also often show if a car was ever listed as “totaled” by an insurance company, which could indicate severe damage that was repaired. If you’re looking to buy a used car, problems on the VHR are a very good reason to walk away or reduce your offer, and if you’re a car dealer, red flags on the VHR will definitely shrink the trade-in value of a car.
That’s why you shouldn’t wait until you’re trying to sell or trade in a vehicle to check the VHR—just like your credit reports, you should be checking the VHR on your car once a year.
Common inaccuracies found on a VHR
Just as the worst time to discover your credit reports have a mistake is when you’re sitting in the bank applying for a loan, the worst time to discover that your VHR has inaccurate information is when you’re sitting in a dealership or negotiating with a private buyer for your used car.
And VHRs can be really inaccurate. Problems include:
Missing information. Companies like Carfax rely on reports from a wide range of government agencies, insurers, and repair shops—but not everything gets reported in the right way, or through the right channels. Missing data concerning the specific details of an accident or repair can give an impression of a larger problem, or turn a minor fender bender into massive damage.
False information. VHRs can incorrectly report a lack of maintenance (due to a lack of reports), incorrect odometer readings that can erode the perceived value of your vehicle, or even report phantom accidents that never happened—and it’s usually impossible to figure out where the false information is coming from (Carfax, for example, won’t disclose the sources for any particular detail on a VHR). One journalist reported a VHR from Carfax that showed the airbags on his car had deployed, implying a bad accident. The only problem? His car didn’t have airbags.
Misleading information. Another problem that can lurk on your car’s VHR is data that is technically correct but incomplete. Most VHRs will list a vehicle as having been “totaled” (considered a total loss by the insurance company) with zero context—insurers used the term “total loss” to indicate that the cost of repairs on a car exceeds the value of the car. It’s not a description of the level of damage. But many buyers and dealerships will see “total loss” and assume the car was severely damaged and then repaired, which can lead to lowball offers or refusal of a trade in.
Realizing that the VHR is wrong is one thing. Getting them fixed is a whole other battle.
Fixing a VHR
Another reason to review the VHR on your vehicle regularly is the time and work involved in getting these mistakes and inaccuracies corrected. Both Carfax and Autocheck have easy web forms you can fill out if you find an error on your VHR, but it’s not as simple (or as fast) as filling out a form, and it’s almost impossible to find a phone number so you can speak to anyone. You’ll also have to submit some kind of proof that the VHR is in error, which can include stuff like
A rival VHR—for example, if the Carfax report has an error that isn’t reflected in Autocheck’s report, paying for the second VHR can be worthwhile. They cost $25 to $40.
A police report or other documentary evidence of an accident that contradicts the details in the VHR.
An inspection performed by a reputable mechanic or dealership that certifies a lack of damage.
Carfax and Autocheck say they will respond to disputes within a few days, but there is no guarantee it will be that efficient. You may be asked to provide even more documentation, or you may not hear back from them at all—if you’ve ever disputed something on your credit report, you know how long it can take, and how frustrating it can be.
And that delay could be costly if you’re trying to sell or trade-in a car. Delays can impact financing if you’ve locked in a rate and lead to all kinds of ripple effects in your financial life, which is why it’s much better to resolve any discrepancies on a VHR when you’re not selling the vehicle, and can approach the problem calmly and at your own pace.
Vehicle History Reports are useful tools when buying a car, but ensuring their accuracy is often up to the vehicle’s owner. If you want to avoid unnecessary delays and problems getting the full value of your car, pull your VHR today and make sure it’s accurate.
