Many dealers assume that if they simply pull a vehicle history report and it shows no damage, that they are safe in assuming that the vehicle has no serious prior damage. This is simply not the case, however.
Even the operators of vehicle history report providers give disclaimers that the vehicle history reports they sell may not contain all important information concerning a vehicle’s condition. There are a number of reasons for this.
- Not everyone provides information to vehicle history report companies. For example, a vehicle bought from the manufacturer that was fixed its own vehicle damaged probably did not be report the repair to the vehicle history report service.
- Many body shops and insurance companies provide the information; some do not.
- Even when provided, there can be a significant delay between the time the report is made and the time it shows up on the vehicle history report. In those circumstances, a dealer may buy it, see nothing unusual in the vehicle history report, and then the information winds up on a subsequent report when a suspicious customer pulls it.
A dealer who sells a used vehicle with substantial prior damage runs the risk of significant liability in a lawsuit. So what do you do?
- Run a vehicle history report. If there is information to be seen, see it. And it is important that you keep the vehicle history report. If there is a late report of prior damage, you want to show proof that it was not disclosed on the vehicle history report that you ran.
- If title history is available to you, check it to see if there is any designation on the title that the vehicle was salvaged, in a flood, or had some other serious problem.
- When you take a vehicle in trade, look it over carefully. Put it up on a rack to take a look at the undercarriage for any evidence of damage. Do not rely on the trade in self-evaluation form disclosing that there was no damage. If the customer does reveal major, prior damage, make sure that the information is available and disclosed with the car if you choose to retail it.
- If you buy a car from a wholesaler or a private seller, take the same steps.
- If you buy a car at an auction, make sure it was sold under a green light. Then check the vehicle history report, the title history report, and inspect it.
- If you buy a vehicle through a manufacturer’s online auction, don’t assume that you will be told of damage. Most state laws that require disclosure on new cars do not have the same requirement with respect to used cars. Follow the same procedures listed above to ensure that the vehicle history report, title history, and vehicle itself are free of problems.