Car insurance and Carfax reports

Buying a new car or truck gets more expensive every year and the prices seem to be increasing faster than the rate of inflation. True, they are more complicated than ever, and air bags, global positioning systems and antilock braking systems cost money. Still, the prices are dear, and few people rush out to buy a new car without giving it a lot of thought. With prices as high as they are, more and more people are considering buying used cars, but they come with risks of their own.

Even used cars are pricey, so how can you be assured that you’re buying one that’s safe and reliable?

The usual answer is, “Get a Carfax report.” Carfax is a company that will sell you a report, for a small fee, that outlines the past history of the car:

• Odometer accuracy - Is the unit original? Does the figure on it represent an accurate figure?
• Title analysis - Has the car previously been returned as a lemon or wrecked? Has it been declared to be salvage?
• Prior ownership - Was the car formerly a rental vehicle? Was it part of a corporate fleet?

These are the sorts of things that prospective buyers want to know. It would seem to the casual observer that purchasing a report from Carfax would be a “no brainer.”

While buying a report from Carfax might be useful, there is no guarantee that the information in such a report is either accurate or complete. Buying from Carfax might be helpful, but it also may not disclose potential problems.

Information contained within the document is probably accurate. That’s not the problem. The problem is that in most states, there is little to compel anyone to report information regarding flooding or salvage. Few insurance companies provide any information to Carfax; the same is true of most law enforcement agencies. Furthermore, there are no laws that require them to do so. The information in these reports comes from a variety of sources, but one cannot assume that it is complete. If you have a report, you can see what it says and assume that what you see is accurate. Unfortunately, you cannot make any assumptions at all about what isn’t there.

If the report does not mention that the vehicle has been in an accident, you cannot assume that it has never been wrecked.

That said, there is useful information to be gleaned from a vehicle history document. It should probably be part of any prospective buyer’s arsenal of tools prior to purchasing a vehicle. Buyers just need to remember that the picture painted by such a document may or may not be complete, and that there is no way to know.

As always, the best way to find out if a used car is worth buying is to have it inspected thoroughly by a qualified mechanic. After all, the thing you want to know most is what sort of condition the vehicle is in today. That information is best determined right now by someone who is in a position to make that determination.

These documents are good toolsl to use when buying a used car. Just make sure to understand that it should not be your only tool.

Copyright 2006-2007 Retro Marketing. All rights reserved.