Exactly how does car fax work?

[Sigarms]

Been hunting for a used auto since both kids have their learners permit.

Can anyone explain how car fax works, and how do they make money?

Came across a 16 year old car with pretty low mileage IMO for the selling price, free car fax history. Locally bought (for that area, going to be a two hour drive on my end) and it was probably one of the most detailed car history report I've ever seen, including the water pump and time belt change at the correct interval with oil changes and all the other maintence.

Seems all car fax reports always including where you can see what state it was bought in, when, mileage and where it was transfered with little to no service work records, along with if any accidents were reported or the auto has a salvaged title (my current Avalon was bought from a Toyota dealer, but it was a one car owner from NYC of all places, the irony of being in NC and buying a car from NY and it's pushing 400k LOL).

Don't get me wrong, I wouldn't buy a car only on a written report (car fax) without seeing the car, driving it and having a mechanic look at it, but it does offer at least some more "third party" info on the car.

There is a part of me that thinks car fax can be nothing more than a scam because I'm just not certain how they make money unless the auto dealerships of all sizes pay to have the car fax report. Car fax is a business, and businesses are in business to make money. Just don't know enough about the industry is figure out their angle.

 

[Diggin It]

They're basically a subscription and advertising service for dealers and businesses:

Partner with CARFAX

Plus, they sell reports:

Get a CARFAX Report Now

 

[Gunny]

I think they're charging right at $40 to look up one car for an individual, I'm sure the dealerships get a much cheaper per car report.

Around this area, only the dealerships and body shops report repairs to CarFax, the smaller repair shops don't, so while they may have a lot of info on a vehicle, it's possible that they don't have all the info for a particular car.

 

[Tomtint]

You can get a fair amount of data from Carfax, but not 100% certainty. If a car had a insurance claim or accident..it will most likely show up, but if it was a small fender blender.it may not. If it was serviced at a dealer, it may show up, if it was serviced at Joes tube and lube..it may not. If it was inspected at a private garage that does state inspection stickers it may show up as well. It's a very minimalist gauge of a cars past. Try to read between the lines to get an idea of how the car was cared for.

 

[Sigarms]

I think they're charging right at $40 to look up one car for an individual, I'm sure the dealerships get a much cheaper per car report.

I would understand that. However, the one I found off auto trader was provided by the dealership and didn't cost me anything. I honestly can't remember paying for a car fax report, which is why I'm wondering (added this one car report is the most detailed report I've ever seen per vehicle history).

 

[Diggin It]

I would understand that. However, the one I found off auto trader was provided by the dealership and didn't cost me anything. I honestly can't remember paying for a car fax report, which is why I'm wondering (added this one car report is the most detailed report I've ever seen per vehicle history).

Again, it's a subscription based service for dealers and vehicle selling classified ad sites. Individuals can buy reports for $40, but dealers might pay a buck or five for them and the classified ad sites might roll them into the listing fees. Somebody pays for them, usually the seller/dealer.

 

[Sigarms]

Try to read between the lines to get an idea of how the car was cared for.

I've got like 8 pages of this.



One car owner bought from the original dealership until it looks like the same dealership sold it to a smaller car lot to sell after the original owner. My only question is that it seems its the dealer sold it on 10/14 of this year and the smaller dealership isn't listed. That said, looking at online reviews of the smaller car lot, seems to be mostly positive reviews with the couple negative reviews being that the people didn't actually buy a car there, just thought they didn't "push" the car hard enough on them, like they didn't care to sell cars (which doesn't worry me).

 

[Slowpoke Slim]

It's a subscription based service. They make their money on the dealerships and shops they get to buy long term bulk subscriptions. The "onesey-twosey" individual consumer user is not where their business model is built on. Once a dealer has a full subscription membership, I think they get XXX number of uses free, based on that level of subscription they buy. Then any transactions over that the dealer pays an additional amount per each one that exceeded their level.

 

[kenmac]

Anyone that sells a vehicle can obtain a car fax. Either you will pay for it or the seller will pay for it.

Car fax relies on body shops, etc, to report any damage. If the damage isn't reported. then car fax has no idea of any damage.

If I own a garage, and you bring your vehicle in to me for a new engine. If I don't report that I have in stalled a new engine in your vehicle. Car fax will never know.

I have a 2007 ram truck that I bought from a dealer used. He provided me with a clean car fax.

After buying the truck. I found just by looking at several things it had been in an accident.
Doesn't matter to me, because many vehicles on the road today have most likely been in some sort of an accident

 

[fishheadbob]

I was looking at a used BMW on the dealership website. The Carfax was clean, but in the dealerships' writeup of the car they plainly said it had a blown engine (no wonder it was so cheap.) I figure if you had the engine done at the dealership then it would turn up on the Carfax; If someone bought the car from the dealership and had Bubba drop a new engine into it, probably not the case.