When you're buying a vehicle, you have plenty on your mind. How to secure financing, what car to choose, and how to budget are all significant factors. But don't forget about a Carfax report. Perhaps the most reputable of all vehicle history report companies, Carfax provides vital information on a vehicle that can impact your buying decision. Use this guide to learn everything you need to know about getting a Carfax report and how it can benefit you when shopping for your next car.

What Is a Carfax Report?

With operations in Canada, the United States, and Europe, Carfax is the undisputed leader of web-based vehicle history reports. Since 1984, the company has compiled the world's most comprehensive database of vehicle history, giving buyers in-depth insight into the most important aspects of used vehicles. As a result, reputable car dealers and even some private sellers offer Carfax reports to potential buyers through Carfax Canada — the Canadian version of the U.S.-based company.

What Does a Carfax Report Tell You?

Canadian Carfax report next to red car

A Carfax report provides a vast amount of information in one place. The key to unlocking the power of the Carfax report is simply knowing the vehicle identification number, or VIN. Once you input this number on the Carfax website, you can expect a full vehicle history report within seconds.

A Carfax report shows the following:

  • The accident history of the vehicle or whether it's had damage from other sources (fire, hail, flood, etc.), including insurance claims on the vehicle
  • Where the vehicle has been registered and inspected
  • If the vehicle has undergone routine, periodic, or scheduled maintenance (its service history)
  • A close estimate of what the odometer should read (the actual reading should always be more than the amount listed on the Carfax report)
  • The number of previous owners
  • A lien check, but not necessarily information on a lien release
  • When and where the vehicle has been sold
  • Title history, including whether it's a salvage title and where the vehicle has been titled in the past

Car buyers should keep in mind that a new car will not have a Carfax report. This is because the car has no vehicle history nor has it been registered in any province. Therefore, you can cross the report off your list if you plan on making a new car purchase.

Where Does Carfax Get Its Information?

The key to Carfax's unbeatable reputation lies in its sources. In total, the company uses over 100,000 sources to provide an exhaustive list of a car's history. This includes information from:

  • Police departments and law enforcement agencies (for theft or accidents)
  • Insurance companies
  • Car auctions
  • Car dealerships
  • Rental companies
  • Service and repair businesses
  • Provincial inspection stations
  • Automakers

By obtaining such a breadth of information, Carfax maintains that its reports are the most accurate in the industry, even over rivals such as Carproof and AutoCheck. 

What To Look for on a Carfax Report

Six things to look for on Carfax report

Reading a Carfax report can be a bit tricky at first. For the sake of ease and brevity, here are some aspects to look for when you get the vehicle history report.

The Quick Summary

A quick summary of the vehicle history is at the beginning of the Carfax report. If you read only one thing, this should be it. This includes a quick breakdown of:

  • Whether the vehicle has been in an accident
  • Number of owners
  • Maintenance records
  • Odometer reading
  • Title type
  • Where the vehicle was last registered
  • Type of vehicle (fleet, commercial, personal, etc.)

At first glance, the summary may provide deal-breakers or red flags. Still, it's a great starting point to know where to look in the various sections of the report.

Number and Type of Owners

Buying a vehicle that’s had only one or two owners is advantageous. With a limited number of owners, you can ask the right questions, such as if the car has been in an accident or any other issues they’ve had with the vehicle. Furthermore, fewer owners typically translates into more in-depth service records, giving you an idea of whether the car has been properly maintained or if it’s a ticking time bomb.

The detailed vehicle owner section of a Carfax report shows everything you need to know regarding the ownership history of the vehicle. This section contains:

  • Year purchased
  • Type of owner (personal, fleet, etc.)
  • Estimated length of ownership
  • Estimated miles driven per year
  • Estimate of odometer reading

Whether to buy a personal or fleet vehicle is also a vital aspect of car shopping. Companies often use fleet vehicles for commercial purposes. In some cases, they may still have some life in them, but keep in mind that many companies use them until they’re beaten into the ground or have reached the end of their tax breaks for depreciation. Tread lightly on these, as major mechanical work could be right around the corner.

Accident History

To avoid buying a lemon or a vehicle with significant structural or mechanical problems, always read the accident history. This will show if the vehicle has:

  • Been declared a total loss (salvage or branded title)
  • Had its airbags deployed
  • Suffered structural damage
  • Been in an accident or has other damage (aside from structural)

Acceptable Accident History and Red Flags

Just because a vehicle has had a claim or been in an accident doesn’t necessarily dismiss it from your consideration. Claims can often be cosmetic in nature or a routine repair that doesn’t impair the mechanical aspects of the vehicle. Examples of an acceptable accident history might include:

  • Windshield repair from cracking, chipping, or a one-time anomaly. An accident claim for glass is acceptable as it was likely the windshield or window that was replaced and has no effect to the mechanical operability of the vehicle.
  • An accident claim of under $3,000 is acceptable as it is likely body work. A door and bumper repaint can cost $1,500-$2,000 at most body shops. An accident under this dollar amount is usually cosmetic body work and has no effect on the mechanical or structural operation of the vehicle. 

Conversely, an accident claim greater than $3,000 or with an unlisted dollar amount is a vehicle to stay away from as it was likely in a major accident that caused severe mechanical or structural damage. Furthermore, the amount of insurance repairs are often expensive and arbitrary — take them with a grain of salt. Structural damage, major mechanical repairs, problems with air bags, and accident damage can cost exorbitant amounts to repair — often to the point where buying a more expensive yet undamaged vehicle is the better financial decision. But if you know an awesome mechanic or you're the DIY type, you might consider using this to your advantage in negotiations.

Odometer Reading

The odometer reading on the Carfax report is another item to keep your eye on due to rollback fraud. Rollback fraud, or odometer fraud, is when the seller of a car purposely sets the odometer back to fetch a higher price for the vehicle.

Fortunately, a Carfax report lists the last odometer reading as reported through its sources. By comparing the kilometers on the report to what's present on the odometer, you can ensure that you don't become a victim of rollback fraud. 

Where the Vehicle Has Been Registered

You may think the province where the vehicle has been registered may seem somewhat insignificant, but if it's frequently registered in new provinces, it could be a red flag. A common ploy of some curbsiders or dishonest sellers is to buy a flood-damaged or fire-damaged car (that may or may not show up on Carfax) and register it as far away as possible to avoid suspicion. Furthermore, car thieves often use the same technique to skirt authorities and sell the vehicle to an unsuspecting buyer.

If you notice that a vehicle has been registered numerous times in several provinces, ask questions. If they're not answered to your satisfaction, walk away. 

Note: If your car was registered in British Columbia, you need to ask for a different Carfax report than the standard one, as insurance goes through the Insurance Corporation of British Columbia (ICBC). The cost for this supplemental report is $20.

Service History

Service history is another important facet of the Carfax report. If the car has been neglected, it may run fine now, but it's also a ticking time bomb. 

As a rule of thumb, you have two ways to make sure that the vehicle has been serviced properly:

  • Take the current year and subtract the model year of the vehicle. Multiply that by 2. If the number of service history records is substantially less than this number, you should inquire why the car hasn't been serviced up to the manufacturer's recommendations. 
  • Another method is to take the odometer reading and divide it by 5,000, as 5,000 km is the typical interval between servicing. Again, if the number is close, you're probably fine. But you may as well ask.
  • A detailed service history is also beneficial because it shows that the previous owner took proper care of the vehicle. The more diligent the record-keeping is, the greater the chance that the vehicle is in tip-top condition.

Note: Not all service centres are linked to Carfax, so a vehicle may not show it’s been serviced even when it has. Make sure to ask the seller for a comprehensive list of service records to better inform and guide your buying decision.

Lien Check

If the previous owner still owes money on the vehicle, you should see on the Carfax report that the vehicle has a lien against it. To protect yourself from fraud or problems with registering the car, make sure that the owner provides you with a lien release from the lender. This name on the lien release should always match the name on the title, as well as any other documentation on the vehicle regarding liens, financing, or payoff information.

How Much Does a Carfax Report Cost?

As of 2021, pricing for a Carfax Canada vehicle history report is:

  • $41.95 for just the vehicle history report
  • $57.95 for the vehicle history report and a lien check
  • $94.95 for three vehicle history reports and one lien check

Clutch: The One-Stop-Shop for a Free Vehicle History Report

Where to find Carfax on Clutch site

When you want a free Carfax report without chasing the salesman or asking numerous times, Clutch is the answer to your problems. We provide a Carfax report directly with each vehicle listing and check the odometer for rollbacks. Plus, we never purchase a vehicle with high-dollar accident claims and most of our vehicles are accident-free.

With a 100% at-home car-buying process that includes a free vehicle history report, 210-point inspection, and 90-day, 6,000-km warranty, Clutch provides an easy, worry-free way to purchase your next used vehicle. 

Not only can you view the Carfax report at your leisure, but you'll also be certain that your car is in tip-top condition. That's peace of mind you just won't find in traditional car-buying scenarios. So, if you're in the market for a vehicle but don't want the hassle, let Clutch become the one-stop-shop for all your used car needs.