With used car prices rising dramatically in recent years, it’s important to make sure the one you buy is worth its price. One important tool to use while you’re shopping is Carfax, which provides an accounting of a vehicle’s history. Here’s an overview of information in a Carfax report that can help you avoid getting stuck with a lemon.

Keep in mind that the level of detailed information depends on how thorough the reporting entities are. You should also check out the vehicle yourself and ask a trusted mechanic to do an inspection.

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Look for these warning signs:

Crash damage

This obvious red flag indicates a collision has occurred and gives the extent of the damage. Additional information is contained in the detailed history section of the report.

Odometer readings

Finding a lower number of miles on the display panel than in the history report is cause for suspicion. Rolling back miles on an odometer is more difficult than it used to be, but not impossible.

Open recalls

It’s not unusual for a vehicle to be recalled, but open recalls can alert you to outstanding issues that may require your attention and may hint at how attentive a former owner has been to the vehicle.

Service history

It’s unrealistic to expect the report to include every detail of a vehicle’s service record. But you can use the report to get a general sense of whether major service milestones were met. And if you see ongoing issues with a major component (e.g., transmission, engine), it may be a sign of a significant problem.

Title history

This section indicates whether the car has:

  • Received a salvage or junk title (both indicate extensive damage to the vehicle).
  • Been rebuilt or reconstructed.
  • Suffered major damage from fire, hail or flooding.
  • Been declared a lemon and repurchased by the manufacturer. Remember, not all states issue buybacks, and requirements for a lemon law vehicle vary.

Water damage

Water damage due to flooding is another warning sign you should consider. See our slideshow below to help you recognize evidence that a car may have experienced flooding.

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Other data points

The following points shouldn’t automatically eliminate a vehicle from consideration, but
they do warrant extra attention.

  • A car that has bounced around in multiple states in a short time may indicate problems or an attempt to hide problems.
  • A car that’s had multiple owners is typically less valuable than a single-owner car.
  • Airbag deployment might call for some investigation into the circumstances.

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