An investigation by CBC-TV's Marketplace has revealed that vehicle history reports obtained from Carfax are often lacking key data from several sources.

Using a web-based service, the company provides reports to individuals and businesses on used cars and light trucks in Canada and the United States. But, the Marketplace investigation showed those reports are often missing information, like some Canadian and most U.S. insurance claims as well as inspection information from auction houses, which means consumers may be lulled into a false sense of security about a potential used car purchase.

Marketplace ran Carfax reports using the unique Vehicle Identification Numbers, or VINs, for used cars for sale or already sold in Canada and then the results were compared to information gleaned from other databases.

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This Carfax report, provided by a used car dealer and captured on a Marketplace hidden camera, showed no problems with a car later found to have been involved in two accidents. (CBC)

Ads for the company, which is based in Centreville, Va., encourage consumers not to buy a used car without first checking Carfax. The company claims it is, "the first step to protecting yourself against buying used cars with costly hidden problems."

The Carfax website claims the company, "receives information from more than 20,000 data sources including every U.S. and Canadian provincial motor vehicle agency, plus many auto auctions, fire and police departments, collision repair facilities, fleet management and rental agencies, and more."

The Marketplace investigation revealed that while odometer readings and junk or salvaged titles are provided to Carfax from provincial and private insurance providers, accident or insurance claim history is not always included.

At one dealership in Port Coquitlam, B.C., a dozen vehicles with accident-free Carfax reports actually had frame damage records from the U.S. auction houses where they were sold to Canadian dealerships.

Data not always up to date

Another problem plaguing the popular service, which costs $39.99 US for 30 days of unlimited searching, is a time lag between when an accident or insurance claim occurs and when it is recorded in the Carfax system.

Marketplace uncovered police reports on two accidents involving the same 2005 Acura RSX. One of the accidents took place in 2005 in New York State, and the other in 2008 in Florida. Only the 2008 accident is noted in a Carfax report.

Larry Gamache, a Carfax spokesman, told Marketplace host Erica Johnson, "As quickly as people can report the information to us, we include it in our database."

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Marketplace host Erica Johnson checks out frame damage on a truck with mechanic Chris Evans. The damage found by Evans contradicts the Carfax report indicating the vehicle had an accident-free history. (CBC)

Darren Brockett bought a 2002 Nissan X-Terra after seeing an accident-free Carfax report on the Port Coquitlam dealer's website.

A frame damage record from the auction house was found when Marketplace ran the VIN of the X-Terra through other databases. With the owner's permission, Marketplace took the truck to a frame alignment specialist, and confirmed the frame damage.

"It looks like it took an impact on the front, either sideways or more directly in front, bent this rail in, kinked it up in this area, and when they straightened it, [it] cracked," said Chris Evans, a mechanic at West Coast Alignment and Frame in Vancouver.

Evans inspected the damage to the front right side of the truck and said it was likely unsafe to drive.

During the interview with Carfax, Johnson explained that Brockett trusted Carfax to "let him know if the truck he was buying had any problems."

Gamache's response was, "I'm sorry he was mistaken."

Marketplace airs at 8:30 p.m. on Friday night.