What Is a Vehicle History Report? Understanding Its Pros and Cons
Written By
Peter O'Neil
Published
May 1, 2024
Uncover the origins, components, and benefits of Vehicle History Reports (VHRs) in this comprehensive guide. Understand the pros and cons today.
Introduction
Purchasing a used vehicle can be a daunting task, as you can never be entirely sure about the car's history and potential issues. That's where vehicle history reports come into play, providing invaluable insights into a car's past, including ownership history, accident records, maintenance logs, and any title brands or odometer discrepancies. These reports aim to reveal important details that could impact your buying decision, such as whether the car has been involved in major accidents, suffered flood damage, or had its odometer rolled back.
While vehicle history reports from reputable providers like Carfax and AutoCheck can uncover crucial information about a used car's past, it's essential to understand their limitations. These reports do not substitute for a comprehensive mechanical inspection and cannot fully capture the vehicle's overall condition or previous owners' driving habits. Nonetheless, obtaining a car history report is a wise first step in the used car buying process, helping you 'trust, but verify' the seller's claims and make a more informed decision.
The National Motor Vehicle Title Information System (NMVTIS) provides vehicle history reports that can help consumers avoid purchasing flood-damaged, salvaged, or other unsafe vehicles. NMVTIS is a tool that assists states and law enforcement in deterring and preventing title fraud and other crimes. Consumers can access NMVTIS vehicle history reports, and reporting entities can obtain an NMVTIS reporting ID and report required data to the system.
However, the reports available through NMVTIS are very basic and only indicate if a vehicle has a branded title, providing little additional context. For more comprehensive information, consumers may need to consult other sources or purchase reports from third-party providers.
Understanding Salvage Titles
A 'salvage' title indicates that a vehicle has and has been declared a total loss by an insurance company. This could be due to collision, fire, flood, accident, hail damage, theft, or other occurrences.
A 'branded title' is a specific designation on a vehicle's title that indicates it has sustained damage or may be potentially unsafe to operate. Examples of branded titles include salvage, rebuilt, flood-damaged, and hail-damaged. A 'salvage vehicle' is a motor vehicle that an insurance company has obtained from the owner after paying a total loss claim.
A 'revived salvage is a vehicle that was subsequently repaired and reregistered with the DMV.
The purpose of the salvage law is to ensure the vehicle is properly repaired to its original condition before it can be driven again. This includes the repair or replacement of specific major and minor parts. Specific documentation is required for a salvage inspection, including the salvage title, invoices for all replacement parts, a work order, and photos of the vehicle before repairs. There are also specific requirements for flood-damaged and hail-damaged vehicles, including the need for an inspection and additional documentation.
Considerations for Salvage Title Vehicles A salvage title indicates that a car has been damaged to the extent that the repair costs exceeded its fair market value, and the car was deemed a 'total loss' by the insurance company. The vehicle can be repaired and put back on the road after passing a safety inspection, but it will have a 'rebuilt salvage title' or similar branded title, depending on the state.
Reasons to Avoid Buying a Salvage Title Car & Situations Where Buying May Make Sense
Buying a salvage title car comes with several risks and limitations that should be carefully considered. These vehicles often have financing limitations, making it difficult to obtain a loan; thus, paying cash may be necessary. They can also be hard to insure due to safety concerns and the uncertainty about the extent of past damages. Moreover, salvage title cars typically have a minimal resale value and carry a heightened risk of fraud, especially if the full history of the vehicle isn't known. However, there are situations where purchasing a salvage title car might make sense, such as when the damage is minor, you possess extensive mechanical knowledge, or you do not plan to resell the vehicle.
Ownership History
Vehicle Title and Registration Records Vehicle title and registration records can provide valuable insights into a car's ownership history. These records contain detailed information about the vehicle and its owners, which can help potential buyers make informed decisions.
Vehicle Title Record Abstracts Vehicle title record abstracts include the following information:
Vehicle Identification Number (VIN)
Year
Make
Body type Weight
Color
Fuel type
Number of cylinders
Current owner's name and address Any lien holder information Details on previous owners
Vehicle Registration Record Abstracts Vehicle registration record abstracts contain the following details:
Make
Color
Body type
Weight
Fuel type
Number of cylinders
Information on other vehicles previously registered to the same plate number Previous plate numbers used Events affecting registration status (e.g., insurance lapses, parking violations)
Importance of Ownership History A vehicle history report can provide valuable information about a car's ownership history, including:
Major accidents
Mileage rollbacks
Multiple owners
Structural damage
Whether the vehicle was ever declared as salvage
Knowing the ownership history can help potential buyers make informed decisions and avoid purchasing vehicles with hidden issues or a troubled past.
Accident Records
The transparency offered by VHRs can unearth skeletons in a vehicle's closet, such as odometer fraud, hidden accidents, or title anomalies. This revelation not only empowers buyers with knowledge but also instills a sense of confidence in their purchase decision. However, the reliance on VHRs is not without its pitfalls. Potential buyers might be lured into a false sense of security, undermining the necessity of a physical inspection. Additionally, VHRs are not infallible; they may harbor inaccuracies or fail to report incidents that went unrecorded.
While VHRs stand as a beacon of transparency, it's critical to acknowledge their limitations. Not all accidents are detrimental in the long run—a minor dent shouldn’t deter a promising purchase. Moreover, the variation in data collection methods between providers like CarFax, AutoCheck, and newer entrants like VinWiki or CarOracle, could result in discrepancies in reports, especially concerning repair and maintenance records.
Cons of Vehicle History Reports
Vehicle history reports contain crucial information about a car's accident history, which can help potential buyers assess the extent of damage and determine if proper repairs were conducted. Understanding a vehicle's accident records is vital, as it can reveal potential reliability and safety concerns.
Accident History Details The accident history section of a vehicle history report sheds light on any reported accidents the car has been involved in. The reports aggregate data from various sources, including government agencies, vehicle auctions, and auto repair shops, to provide these details. Some key elements covered in the accident history include:
1. Number of reported accidents
2. Severity of the accidents (minor, moderate, or severe)
3. Types of damage sustained (front-end, rear-end, side-impact, etc.) 4. Estimated repair costs
5. Whether the vehicle was declared a total loss
Red Flags to Watch Out For
While not all accidents carry the same weight, there are certain red flags to be aware of when reviewing a vehicle's accident history. These include:
Multiple Accidents: A history of multiple accidents may indicate underlying mechanical issues or safety concerns.
Severe Damage: Accidents resulting in significant structural damage, such as frame damage or deployment of airbags, can compromise the vehicle's safety and reliability.
Unrepaired Damage: If the report shows that the vehicle was not properly repaired after an accident, it could have lingering issues.
Limitations of Accident Records It's important to note that vehicle history reports are not perfect and can have gaps in the information they provide. Some limitations include:
Unreported Accidents: There is no centralized database for accident reports or repairs, so many accidents and repairs may not be captured in the reports.
Totaled Vehicles: Not all totaled vehicles end up with negative 'reconditioned or salvage' titles, as some insurance companies did not report totaled vehicles to the DMVs.
Incomplete Data: If an accident or repair was not reported to the database, it will not show up on the report. Despite these limitations, the accident history section of a vehicle history report remains a valuable tool for assessing a used car's condition and making an informed purchasing decision.
How does the CARFAX Buyback Guarantee work?
The CARFAX Buyback Guarantee provides a specific form of protection for buyers of used vehicles, focusing solely on inaccuracies related to the title status. This guarantee comes into play if a CARFAX Vehicle History Report erroneously indicates that a vehicle does not have a Branded Title when, in fact, it does.
A Branded Title could include significant issues like salvage, flood damage, or odometer fraud that dramatically affect the vehicle's value and safety. If such a discrepancy is found, CARFAX may compensate the vehicle's owner with an amount up to the lesser of the vehicle's purchase price or 110% of its CARFAX History Based Value.
This guarantee applies only if the Branded Title was issued at least 60 days prior to the report and the claim is made within a year of the report.
It is important for buyers to understand that this protection does not extend to inaccuracies regarding the vehicle's accident history or other non-title related issues, focusing strictly on title branding mistakes.
Maintenance Records
Limited Access to Repair Information Vehicle history reports often lack comprehensive maintenance records, as companies have limited access to automotive repair information. These reports may not show the full service history, especially for work done at smaller repair shops. This means that potential buyers cannot verify if repairs were done properly or if the vehicle was well-maintained by previous owners.
Annual Safety Tests vs. Pre-Purchase Inspections It's important to note that annual safety or emissions tests are not the same as a comprehensive pre-purchase inspection. While these tests may catch some issues, they do not provide a complete picture of the vehicle's overall condition and maintenance history.
Common Car Services and Repairs Vehicle history reports may include information on common car services and repairs, along with pricing details. However, this information is often limited and may not accurately reflect the specific work done on a particular vehicle.
Factors Affecting Maintenance Records Several factors can contribute to the lack of comprehensive maintenance records in vehicle history reports:
Unreported Repairs: Many repairs, especially those done at smaller shops or by individuals, may not be reported to the databases used by vehicle history companies.
Incomplete Data: If a repair or service was not reported to the database, it will not be included in the report, leading to an incomplete picture of the vehicle's maintenance history.
Owner Discretion: Some owners may choose to perform maintenance and repairs themselves or at facilities that do not report to vehicle history databases, resulting in gaps in the records.
Data Sharing Limitations: Automotive repair facilities may have limited data-sharing agreements with vehicle history companies, further restricting the availability of maintenance records. While vehicle history reports can provide valuable information, it's essential to understand their limitations when it comes to maintenance records. Potential buyers should consider these reports as a starting point and supplement them with a thorough pre-purchase inspection by a qualified mechanic to gain a more complete understanding of a vehicle's condition and maintenance history.
Odometer Discrepancies
The Importance of Checking Odometer Readings
Vehicle history reports play a crucial role in detecting odometer discrepancies, which can be a significant red flag when purchasing a used car. An odometer discrepancy occurs when the mileage displayed on a vehicle's odometer does not match its actual mileage. This can happen due to various reasons, including odometer tampering, fraud, or simply a mechanical issue with the odometer itself.
How Vehicle History Reports Detect Odometer Discrepancies
Vehicle history reports rely on data from various sources, such as state motor vehicle agencies, auto auctions, and repair facilities, to track a car's mileage history. By comparing the odometer readings reported at different points in the vehicle's life, these reports can identify potential discrepancies or irregularities.
Mileage Inconsistencies: If the mileage reported during a service or inspection is lower than the previous reading, it could indicate odometer tampering or rollback.
Sudden Mileage Jumps: Significant and unexplained increases in mileage between two reporting periods may also raise suspicions of odometer discrepancies.
Mileage Freezes: If the mileage remains unchanged for an extended period, it could suggest that the odometer has been disconnected or tampered with.
Consequences of Odometer Fraud
Odometer fraud is a serious offense that can have legal and financial implications for both buyers and sellers. In many states, it is considered a criminal offense, punishable by fines or even imprisonment. Additionally, odometer fraud can lead to the following consequences:
Diminished Vehicle Value: A vehicle with an inaccurate odometer reading will have a lower resale value, as potential buyers will be hesitant to purchase a car with an unknown mileage history.
Increased Maintenance Costs: Buyers may end up paying more for repairs and maintenance than anticipated, as the true mileage and wear and tear on the vehicle are unknown.
Safety Concerns: Odometer tampering can mask the need for critical maintenance or repairs, potentially putting the driver and passengers at risk.
While vehicle history reports are not foolproof, they serve as an essential tool in detecting odometer discrepancies and protecting consumers from odometer fraud. It is crucial to obtain a comprehensive vehicle history report and carefully review the mileage history before making a used car purchase.
Recall Information
Checking for Vehicle Recalls The National Highway Traffic Safety Administration (NHTSA) provides a convenient way to check for vehicle recalls, investigations, complaints, and manufacturer communications by entering the Vehicle Identification Number (VIN), license plate, year/make/model, or NHTSA ID. When searching by VIN or license plate, you can see if a specific vehicle has any unrepaired recalls. However, it's important to note that the search will not show: Recalls that have already been repaired Recalls for vehicles over 15 years old Recalls by small manufacturers Non-safety recall campaigns To stay informed about recalls, you can sign up for recall alerts via the NHTSA SaferCar app or email.
Reporting Safety Issues If you encounter a potential safety problem with your vehicle, you can file a complaint with NHTSA. These complaints help the agency investigate and identify potential safety defects that could lead to recalls. NHTSA's recall process involves screening complaints, conducting investigations, and then requiring manufacturers to announce and remedy safety defects.
Manufacturer Responsibilities Manufacturers are responsible for notifying owners of recalls and providing free repairs. If you receive a recall notice, it's crucial to follow any interim safety guidance provided and get the recall repair done as soon as possible.
Vehicle Safety Recalls Week To raise awareness about the importance of checking for and addressing vehicle recalls, NHTSA has designated March 4-10, 2023, as Vehicle Safety Recalls Week. During this week, NHTSA highlights the following: A new feature in its recall lookup tool, allowing vehicle owners to check for recalls by license plate number or VIN. Recalls issued for child car seats, tires, and other vehicle-related equipment, which can be checked at NHTSA.gov/Recalls. The NHTSA's free SaferCar app, which can send recall information directly to your phone.
Recall Statistics and Importance In 2023, there were 1,000 recalls for vehicles, car seats, tires, RVs, and other equipment, affecting over 34 million vehicles in the U.S.. Despite the high number of recalls, millions go unrepaired or unaddressed every year. To stay safe, it's recommended to check for open recalls at least twice a year, as hundreds of recalls are issued and updated annually.
VIN Search Tool The NHTSA provides a VIN (Vehicle Identification Number) search tool to check if a specific vehicle has any unrepaired safety recalls in the last 15 years. This tool covers safety recalls that are incomplete on a vehicle and safety recalls conducted over the past 15 calendar years by major light auto automakers, including motorcycle manufacturers. However, the VIN search tool does not cover: Completed safety recall information
Manufacturer customer service or other non-safety recall campaigns International vehicles
Very recently announced safety recalls
Safety recalls that are more than 15 years old
Safety recalls conducted by small vehicle manufacturers
The recall information provided through the VIN lookup tool is sourced directly from the manufacturer conducting the recall. NHTSA does not record VIN information or results provided through the VIN lookup tool.
The VIN lookup tool supports a wide range of vehicle manufacturers, including Acura, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Honda, Hyundai, Infiniti, Jaguar, Jeep, Kia, Land Rover, Lexus, Lincoln, Maserati, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Polestar, Porsche, RAM, Subaru, Tesla, Toyota, Volkswagen, and Volvo, among others.
Additional Recall Information The content provided also covers:
Details on several recent vehicle recalls, including those by Kia, Ford, GM, Hyundai, Kia, Subaru, and Ford.
A Q&A section answering common questions about what to do when receiving a recall notice, how to check for recalls, and who pays for recall repairs. A list of recalls by vehicle make and a directory of service centers by city. Additionally, you can check the National Highway Traffic Safety Administration website at safercar.gov to see if a vehicle has any open safety recalls.
Report Limitations
Limited Scope Vehicle history reports cannot determine the current condition of any component or system in a used vehicle. They merely provide a snapshot of the vehicle's past, but do not offer a comprehensive assessment of its present state. A vehicle history report alone is not sufficient to determine the true value of a used vehicle.
Unverified Information Vehicle history companies do not verify the information provided to them, leading to potential errors in their reports. Some used car dealers knowingly sell vehicles with undisclosed frame or accident damage by providing a 'clean' history report. This lack of verification can result in incomplete or inaccurate information being presented to consumers.
Ownership Anonymity Vehicle history reports do not indicate who the current owner of the vehicle is. This anonymity can make it difficult for potential buyers to contact the current owner and inquire about the vehicle's condition or maintenance history.
Time Lag There is often a time lag between when an incident occurs and when it gets reported in a vehicle history. This delay means that the report may not reflect the most recent events or issues related to the vehicle.
Cost Considerations Vehicle history reports can be expensive for the limited information they provide. Reputable providers like AutoCheck or Carfax typically charge $25-$45 for a single report, which may be a significant cost for some consumers.
Dispute Resolution Vehicle history companies are not always consumer-friendly when it comes to disputing errors in their reports. They may hide behind disclaimers when their reports miss important information, making it challenging for consumers to address inaccuracies or obtain a refund.
Over-reliance on Reports Consumers sometimes mistakenly believe that a 'clean' vehicle history report eliminates all risks associated with purchasing a used vehicle. However, these reports are not infallible and may contain errors or miss unreported incidents.
Varying Data Sources Different vehicle history report providers (like Carfax and AutoCheck) may have unique data sources, leading to differences in the information reported. This variation can make it difficult for consumers to determine which report is more accurate or comprehensive.
Interpretation ChallengesInterpreting the information in vehicle history reports requires some knowledge and understanding of what the different data points mean. Without proper guidance, consumers may struggle to fully comprehend the significance of the reported information.
Supplementary Inspection While vehicle history reports provide valuable insights, it's recommended to get an independent vehicle inspection, as a history report is not a substitute for a thorough mechanical evaluation by a qualified professional.
Obtaining Reports Vehicle history reports provide valuable information to buyers, especially for used vehicles, to avoid purchasing a 'lemon' or problem vehicle. Carefully reviewing all the information in a vehicle history report, especially the detailed chronological history, can help buyers make an informed decision and avoid purchasing a problematic used vehicle.
Reliable Sources The AutoCheck vehicle history report is highlighted as a reliable and detailed source that provides a proprietary scoring system to compare the condition of the vehicle against the average for that model. Paid vehicle history reports cover details like flood damage, airbag deployments, past owners, odometer rollbacks, and liens, which can indicate serious issues with the vehicle. Reviewing a comprehensive vehicle history report is important to ensure you are buying a safe, reliable, and properly maintained vehicle.
Free Reports from Dealers Many major used car dealers and car-selling sites provide free vehicle history reports, usually from Carfax or AutoCheck, to interested buyers. However, it's important to note that vehicle history reports can instill a false sense of security, causing potential buyers to skip or downplay the importance of a physical inspection. VHRs should be used in conjunction with a vehicle inspection and a mechanic's assessment, as they are just one piece of the puzzle in the used car buying process.
Accessing Vehicle History Reports You can visit the National Motor Vehicle Title Information System (NMVTIS) website at vehiclehistory.gov to access NMVTIS-approved providers of vehicle history reports. Other providers that offer additional information beyond NMVTIS include AutoCheck.com, Carfax.com, and Vinaudit.com.
The Department of Justice provides a list of Approved NMVTIS Data Providers that can provide vehicle history reports to both commercial and public customers. The approved NMVTIS Data Providers include companies like Bumper.com, Carsforsale.com, Carvertical.com, and Vinaudit.com.
Additional Resources Resources are provided for researching a car's value, such as Edmunds.com, Kelley Blue Book, and the National Automobile Dealers Association Guides. If you suspect fraud from a car dealer, you can report it to the Federal Trade Commission or your state/local consumer protection office. To obtain a vehicle history report, you'll need the car's 17-digit vehicle identification number (VIN), and popular services like Carfax and AutoCheck charge $25- $40 per report.
Conclusion & FAQs
In summary, vehicle history reports offer invaluable insights into a used car's past, but they have limitations. While they can uncover crucial details about accidents, ownership transfers, odometer discrepancies, and maintenance records, these reports should not be solely relied upon. They serve as a starting point, complementing a comprehensive mechanical inspection by a qualified professional. Should you be interested in finding a pre-owned vehicle, and are a resident in California, consider reaching out to CarOracle and learning about our Auto Buying Program.
Ultimately, purchasing a used vehicle requires diligent research and a holistic approach. By carefully reviewing vehicle history reports, conducting thorough inspections, and seeking expert advice, prospective buyers can make informed decisions and mitigate potential risks associated with pre-owned automobiles.
FAQs
Q: What is the significance of vehicle history reports? A: Vehicle history reports are crucial for purchasing a vehicle that will offer dependable and safe use for years to come. They provide extensive information about a car's past, including details of any damage, the accurate mileage, maintenance history, and any recalls that may affect the vehicle.
Q: Can we trust the information in a vehicle history report? A: Generally, a vehicle history report provides a fairly accurate overview of a car's history, such as its maintenance record and any accidents it has been involved in. However, there is a possibility of errors in the report, and consumers should also be aware of scams related to these reports, especially in the context of buying or selling used cars.
Q: Which service is known for providing the most reliable vehicle history checks? A: Carfax is widely recognized as the leading provider of vehicle history reports, known for its reliability in the industry.
Q: What are the critical aspects to focus on in a vehicle history report when considering the purchase of a used car? A: When reviewing a vehicle history report, the most critical elements to consider are:
1. Junk, Salvage, and Loss Events: Indicators of significant past damage or total loss are major red flags.
2. Other Damage: The report should detail not just major accidents but all types of damage the vehicle has sustained.
3. Odometer Readings: Verifying the true mileage is essential, as there is a significant value difference between a car with low versus high mileage.
4. Title Information: Ensuring the title is clean and not branded with any issues.
5. Recalls: Being aware of any past or present recalls that may affect the safety or functionality of the vehicle.
