Why You Need to Get a Vehicle History Report

So you’ve decided to buy a new-to-you car, right? You’ve found the perfect vehicle—reasonable cost, low mileage, the right color, and conveniently in your neighborhood. Sounds great, right? Time to head over and sign on the dotted line? Hold your horses.

Before you plunk down your hard-earned cash on a used car, there are a few steps you should take before you decide if that diamond in the rough that you’ve discovered, is actually, well….a diamond.

First and foremost go and check it out. Test drive it, take it for a spin. We have some tips on what to look for when you do go and get behind the wheel. Next see about getting a mechanical inspection. Want to know why that’s so crucial—read this. Sure you need to figure out financing and the true cost of ownership before really getting down to brass tacks on the purchase, but before you even do that—check out a vehicle history report.

Think of the vehicle history report as the DNA report of a car. It tracks the detailed history of the vehicle from the time it was first sold until it ends up in your hands. The report is tied to the vehicle identification number or VIN of the car and can show you all sales, registrations, titles and repairs. There are any number of things that can get a car a “branded” title—including getting totaled by an insurance company for theft or damage, being rebuilt, or landing in a junkyard. Think of it the way cattle get branded—it’s a mark on the title. While cars with these branded titles can offer a good deal, you need to know what you are doing if you decide to pursue something with a marred title. Want to know more? Read about why you should try to avoid cars with a salvage title, here.

So where do you start looking for a vehicle history report? There are a number of different companies out there that offer up vehicle history reports. Some even focus on specialty markets like trucks. The National Motor Vehicle Title Information System (or NMVTIS) lists a number of companies that are “approved data providers.” The providers listed on the NMVTIS site offer consumers, dealerships, financial institutions, and others information about vehicle history, equally—so no punches are pulled or data hidden. They get their info from participating motor vehicle registries and, according to their site, currently cover 87% of the U.S. vehicle population. Despite the wonky acronym it’s the only publicly available system that all insurance carriers, auto recyclers, junk yards, and salvage yards are required to report to on a regular basis, under federal law, and it’s run by the Department of Justice.

The NMVTIS is a good place to start but it focuses on only five indicators: the current state of the title and last title date, the “brand” history (or the status of a vehicle –this is where you will find if a car has been flooded, salvaged or junked), odometer reading, total loss history, and salvage history. You should be aware that there are differences from state-to-state. For example, if a car has been in the possession of a salvage or junk yard, the state may not be required to “brand” that car as such—which means you could get a false negative on the report. In addition, just because an insurance company has determined that a vehicle is a total loss, doesn’t mean that the vehicle has been destroyed or is worthless, either.

There are other private companies that also provide a bit more car history data than the NMVTIS. If you have been on the market for a used car, you’ve probably heard of Carfax. Carfax has been around since 1986 and pioneered the idea of letting everyday people access the information that the DMV had on all cars. They used to fax the information to people when they requested it—hence the name. There is also a company, owned by Equifax (the credit card ratings company) called AutoCheck that offers users access to VIN reports for a fee. Don't want to pay a fee? Instamotor actually provides a free history report by AutoCheck on each vehicle listed.

The report from one of these companies will usually include more comprehensive data than that from the NMVTIS. It can include information from a wide variety of databases. The information usually includes a summary—an overall evaluation of the vehicle with supporting details, dates, and locations. It will also show the states in which the car has been registered, in addition to the number of previous owners, mileage, accident information, and lemon and recall checks. You should pay particular attention to the mileage and vehicle history on a car you are considering buying as any non-sequential mileage reporting could indicate that the odometer has been rolled back and fraudulently changed. That’s a big no-no and likely a deal breaker.

Want to know more about how to buy a great used car? Check out the other blog posts here on Instamotor and find your next new-to-you car.