How CARFAX Works

cheesy used car salesman
Image Gallery: Classic Cars Don't take this salesperson's word for it -- get a CARFAX report. See pictures of classic cars.

Despite the old cliché of the shady used-car salesman spinning yarns on a weedy, potholed lemon lot, many used-car dealers are honest, hard-working people trying to make a buck selling low and buying lower. But reputations are hard to shake, and since most people have at most a basic understanding of vehicular mechanics, the opportunity exists to sell used vehicles that appear sound but in truth have serious problems -- even die-a-mile-down-the-road problems.

And if you think private sellers have a sterling track record, think again. Transactions between private citizens don't always include the full and free exchange of information regarding the vehicle at hand. Often, the buyer and seller connect through a newspaper or online advertisement and never see each other again.


These sellers and their used cars aren't always quite what they seem. Sometimes, cars with "for sale" signs parked in grocery store parking lots give the impression that they're being advertised by a private seller, when in fact the seller has many such auction-bought clunkers strewn about the public parking lots of an entire city.

There are quite a few potential deal-breakers when it comes to the purchase of a used car. If the car has been in a series of wrecks or has been totaled out by an insurance company, the chances are pretty good it will have significant problems. Some cars have recalls, or have been categorized by state motor vehicle agencies as "lemons."

Cars or trucks originating from coastal areas may have rust in hard-to-see spots, while vehicles that have been in major floods -- think "Katrina cars" -- may seem to run normally, only to leave you high and dry long after you and the seller have exchanged titles and cash and parted ways.

Pulling the wool over one's eyes about the murky origins of a car became considerably more difficult with the rise of CARFAX, a vehicle history-reporting company that is used in millions of car transactions each year.

Used-car buyers can now access records related to any given car in a matter of seconds through CARFAX, allowing a consumer in need of new (old) wheels to make a much more informed decision, while empowering used-car salesmen to back up their claims with a clean CARFAX report.

Next, we'll run a background check on CARFAX.