The VHR Breakdown: What Are Vehicle History Reports?

When you're in the market for a used car, it pays to be conscientious in your buying decision. No one wants to spend thousands of dollars on a vehicle only to find out it needs costly repairs or — even worse — is a salvage or stolen vehicle. 

One way to protect yourself from an unfortunate purchase is to request a vehicle history report (VHR) for used cars. This report can provide a detailed analysis of the vehicle's past, including its maintenance, repairs, and accidents.

Vehicle history reports can help sellers, too. With a clean VHR, you'll find it easier to sell your used car. You can reassure buyers of the car's history, and it may help your buyer secure a loan for the vehicle if they need one.

What information does a vehicle history report typically include?

A vehicle history report contains detailed information about the car's history. Some information you'll find in the report includes:

• Ownership details: Number of individuals who previously owned the car and the sale transfer dates
• Accidents: Whether the vehicle was in any reported collisions
• Mileage: The vehicle's mileage at different points in time
• Inspection data: Dates of prior state inspections
• Branding: Whether the car ever received a lemon, flood, junk, or salvage branding
• Use type: Personal, lease, taxi, rental fleet, or police use
• Recalls: Notes on any manufacturer recalls 
• Warranty: Whether the vehicle is under any warranty

A VHR can help you identify essential details about the vehicle's past. However, it won't tell you the names of the prior owners or anything about their driving habits. It's also limited to what dealerships, repair centers, manufacturers, and governmental agencies report concerning the vehicle. If an owner takes the car to a shop that doesn't inform reporting companies, those details won't appear on the report.

Sometimes, there are delays in the reporting process. For instance, an owner may repair and sell a wrecked vehicle before details about the collision appear on the report. You also won't find any information about the car's mechanical condition, such as whether the tires or brake pads need replacing.

Why is a vehicle history report important when buying a used car?

Buying a car is a major investment. You want to know you're spending your money wisely, the vehicle is safe to drive, and it won't need expensive repairs. 

Buying a car is a little like purchasing a house. When you buy a home, you go through several steps before finalizing the sale, such as a title check and home inspection. Those steps help you understand the home's condition and if there are any potential claimants to the property. A VHR gives you insights into the car's history and whether any red flags might make it a bad deal.

Think of the VHR like the car's biography. Start at the beginning, from its initial manufacture and sale, and note all the activities since then. Pay particular attention to regular maintenance and any accident involvement. If there are any unexpected gaps, like major repairs despite no reported accident, you'll want to investigate those further with the seller.

Keep in mind that a vehicle history report is only one factor in your buying decision. You should also get the car inspected at a reputable service facility. A thorough vehicle inspection can identify any issues that may require repairs and may also reveal unreported signs of water or structural damage.

How can vehicle history reports affect the value of a car?

A vehicle's make and model year is just one aspect impacting its worth. Two cars of the same make and model driven off the same dealer's lot on the same day may have significantly different values in later years. 

Four factors can impact a used car's value, all of which you can find on the VHR.

1. Accidents

Vehicles involved in a collision typically sustain some damage. The damage may be severe or negligible. Severely damaged vehicles may be labeled a total loss or require extensive repairs. Even minor damage can impact the car's longevity, reducing its value.

2. Maintenance

Failing to stay current with a car's maintenance can drastically lower its resale value. A VHR can show how frequently prior owners took the car for oil changes and other routine maintenance. 

3. Prior Owners

Vehicles have an average of 2.3 owners over their lifespan. Cars with many ownership changes may indicate problems with the vehicle, reducing its value.

4. Recalls

It's not unusual for manufacturers to issue a safety recall. However, if the VHR shows a recall but the owner never fixed the issue, it can lower the car's value. 

Where can you obtain a vehicle history report?

You can purchase a vehicle history report directly from a reporting company like CARFAX or AutoCheck. Prices range from $25 to $40, and purchasing multiple reports can get you a discount. Buying directly from a reporting company is usually the best option if you're considering a purchase through a private owner. 

Your dealership may offer a free VHR as part of the buying process. If you plan on getting a car loan, you may also ask your bank if they'll foot the bill for a VHR. Some banks won't mind the extra expense since it gives them assurance about the vehicle's worth.

If you obtain a vehicle history report from a dealership or other seller, make sure to match the vehicle identification number (VIN) on the report with the VIN on the vehicle. The car's VIN is on the bottom of the windshield on the driver's side. Matching the VINs confirms that you're reviewing information on the car you want to purchase.

What are the limitations of vehicle history reports?

A vehicle history report can tell you a lot about an automobile, but it probably won't include everything. For instance, if the prior owner took the car for service at a facility that didn't report maintenance, it may lack a history of oil changes. Or, if the owner is an experienced mechanic who performed repairs at home, that information won't be on the report. 

Sometimes, there are delays in the reporting process, so very recent accidents or theft reports may not show up on a VHR. These reports also don't include personal information, so you won't know the names of prior owners.

Try not to rely entirely on VHRs when buying a used vehicle. Getting the car inspected and taking it on a test drive should also be part of the decision-making process.