CarFax is very good, but like any vehicle history report, it can only do so much.

Here’s a typical example of how a CarFax might NOT show the entire history of a used car…

Two humans get in a car accident and no one was hurt so they peacefully work out the details as to who was at fault and who owes what to whom.

Lets make a deal

And lets say they work out a deal where neither of them will report the accident to the police or their insurance companies provided the guy who’s fault it was quickly pays for the damage he caused.

Insurance skyrockets

This is a scenario that happens quite often because reporting the car accident will cause the person at faults car insurance premiums to skyrocket, and depending on the company, could result in getting cancelled.

Insurance cancelled

Yes, get in a car accident and some insurance companies may pay for the damages they are contractually obligated for, but then they’ll kick you to the curb by cancelling your policy.

Bondo Deluxe

If neither party reports the accident, then that means CarFax won’t show that the car you’re interested in buying to sell for a profit is actually a Bondo Deluxe Cruiser.

Not all accidents mean its a “bad” car

And just because a CarFax says the car was in an accident doesn’t necessarily mean that its a “bad” car now. Sometimes the damage was fixed by replacing a dented bumper or broken tail light with a new one.

Fine print

Read the fine print on the CarFax to see if the car had to be towed away from the accident or drove away on its own.

Bottom line

CarFax and other vehicle history reports can be advantageous when buying and selling used cars for profit, but you still need to do your due diligence when inspecting the car before plunking down your money.

Thanks for reading and please leave your comments and/or questions below.

Steve