Stop Signs on a Vehicle History Report

Buying the Right Used Car

Broken Windshield
Getting the Background Check on Your Used Car

When you buy a used car you want some idea of the car’s history, like whether it was used to train gorillas in the art of demolition derby. A vehicle history report, like the ones offered for a fee by CARFAX, AutoCheck or the Department of Motor Vehicles (DMV) can offer some important insight into where your car has been all its life. Generated using the records kept by police, auto auctions, dealers, insurance companies, the DMV and other organizations, the reports can be very useful, if you know what to look for. Here are some areas to pay special attention to:

VIN Match

If you were given a Vehicle Identification Number (VIN) by the seller to run the vehicle history report ahead of time, make sure it matches the actual one on the car. On newer car models, the VIN can usually be seen on the lower driver side of the front window.

Odometer Reading

The mileage listed on the report will be the figure recorded at the DMV the last time the title changed hands, so compare it to the car’s current odometer reading. If the odometer number is lower than what is listed on the report, this could be a sign that the odometer has been tampered with.

Serious Damage

Figuring out the severity of damage a car has suffered isn’t always going to be as easy as finding bold letters advising you, “DON’T BUY THIS CAR!” Sometimes you may find a notation on the report that the car has been listed as an “Insurance Loss” or a “Salvage Title,” which could mean that the vehicle was considered beyond repair at one point. These types of vehicles are usually best to avoid. Cars labeled as “Rebuilt,” “Junk,” or as being damaged by water, hail, fire or collision are also ones to steer clear from if other options exist.

Ownership History

This section will show how many registered owners the vehicle has had. If a car has had a more than 2 previous owners, this could be a red flag that the car has a chronic problem of some kind.


You want to make sure the seller of the car has no outstanding liens against the vehicle. In some cases, people have even been known to sell cars they don’t legally own.

Emissions Inspection

If you live in a state where an emissions test is required to register a vehicle, you don’t want to invest in a car that has failed an emissions test before since this could be a big money hole going forward.

States Owned In

If a report lists that a vehicle has been owned in several different states, this could be a sign that dealers have been trying to play a shell game to obscure the true history of the vehicle.

Bought Back

Some states and manufacturers have programs through which “lemon” vehicles that don’t work properly are bought back. If you see this kind of activity on a report, be very wary.

It’s important to remember that a vehicle history report gives you a glance at a car’s past and may not represent the entirety of its background. A report should never be substituted for checking the car out in person. Take advantage of the Used Car Test Drive Checklist to give the vehicle a full run-down and try to have it checked by a mechanic before you buy.

The article was originally published by BALANCE℠ Financial Fitness Program. Copyright © 2012 BALANCE.