Can I Sue Over a Used Car History Document or Service?

This article focuses on suing a company that prepares vehicle history reports (VHRs). If you are interested in learning more about suing a dealer for lying to you about a car’s history or the work done on the vehicle, see How to Sue a Car Dealer for Misrepresentation.

While you may have a valid claim to bring legal action against a VHR company, it isn’t always easy or straightforward. If you are considering suing a VHR company, you may want to consult with an experienced consumer protection attorney.

Your options depend on which company you obtained your VHR from. Several companies sell VHRs, but the two big ones are Carfax and Experian’s AutoCheck. In this article, FindLaw discusses these two companies.

See what you can do after getting a bad car report below:

• What Is a Vehicle History Report?
• What You Don’t Get on a VHR
• How Do You Get a VHR?
• When Might You Want To Sue?
• What To Do if the Used Car Report Was Wrong
• Recovering Losses From Carfax
• Recovering Losses From AutoCheck

What Is a Vehicle History Report?

Vehicle history reports are helpful tools when buying a used vehicle. The key to a VHR is the car’s Vehicle Identification Number (VIN). The 17-digit VIN is used to record every major event in a car’s history.

Based on the VIN, a VHR will contain a summary and overall evaluation of the car, along with dates, locations, and details. You can see if a car has been registered in multiple states.

Other information can include the following:

• A description of a vehicle
• The number of previous owners
• Accident information
• Confirmation of recent mileage
• Lemon Law and recall checks

Of most importance, you can learn if a car has a “branded title” or “salvage title,” which means that an insurance company has declared a car a total loss due to, for example, an accident, a flood, or some other catastrophe. This information about the condition, service, and maintenance history makes searching for a used car much easier.

What You Don’t Get on a VHR

VHRs are not perfect. They consist of events that are reported to the company. If the VHR company hasn’t heard about it, it won’t show up on the VHR. If the information the company gets is inaccurate, that inaccurate information will show up on the report.

For example, if you are in a minor accident but don’t get your insurance company involved, the accident will not show up in the VHR. If you get your car serviced at a shop that does not report repairs to VHR companies, the work will not show up on a report. Make sure that if you are buying a used car, you consider getting a pre-purchase inspection.

How Do You Get a VHR?

There are generally two ways to get a VHR. The first is from a company’s website. Make sure you get your VHR from a reputable company. There are a lot of scams out there, so you want to be careful. A single report is often less than $50.

The second way is direct from a used car dealer. Dealerships have agreements with the major VHR companies and will often provide a free VHR to interested buyers.

When Might You Want To Sue?

A few types of disputes might prompt a vehicle owner to consider suing a VHR company. One of them is misleading or incorrect information in the report. This lack of information can affect your purchasing decisions.

VHR disclaimers may hinder your ability to recover. They usually warn the customer that the company isn’t responsible for missing details. 

Example of a VHS Dispute

Suppose you are searching online for a new car. You find one you like at Fred’s Used Cars, a car dealership. You haven’t been to Fred’s before, but you like the look of the car. So you head on over there and meet up with a sales agent.

After a pleasant test drive, you tell the agent you are interested in the car. They run a Carfax report and hands it to you. “Clean Carfax report,” they say. You’re really not sure what that means, but you don’t want to look stupid, so you just glance over the report and nod. You decide to buy the car “as is,” as the Buyer’s Guide says.

Here’s what you see when you skim over the language at the bottom of the VHR (as of March 2022):

“Carfax depends on its sources for the accuracy and reliability of its information. Therefore, no responsibility is assumed by Carfax or its agents for errors or omissions in this report. Carfax further expressly disclaims all warranties, express or implied, including any implied warranties of merchantability or fitness for a particular purpose.”

What this means is best explained through an example.

On your way home from the dealer, the used car you just bought starts shaking. Rather than go back to Fred’s, you take the car over to your trusty mechanic friend. Your friend discovers that your car has significant frame damage that wasn’t reflected in the Carfax report. The car is not worth repairing. You are stuck without a vehicle warranty. You can ask to recover the money you paid Fred, but the business might refuse.

What To Do if the Used Car Report Was Wrong

Your next steps can depend on the service you used. If you anticipate the need to take legal action, it’s a good idea to start by consulting with a lawyer to understand your options.

Contact the Company for Support

VHR companies have an interest in keeping customers happy. You might reach a remedy if you contact their customer service department and explain the issue. 

Alerting the company as early as possible after you detect an inaccuracy is a good idea. As time passes, there could be more doubt about whether the problem started while you owned the vehicle. Be ready to provide documentation of the vehicle’s condition and the timeline.

The company can investigate your claim to figure out why the report was incorrect. Some companies offer to buy a vehicle with hidden problems back from the customer. Note that a vehicle buyback isn’t quite as simple as a typical return or refund.

If the company doesn’t provide a fair remedy, you might then consider legal action. 

Determine Whether You Can Sue

Your ability to sue the service depends on a few factors, including:

• Disclaimers of warranties
• The terms of service
• Whether you opted out of mandatory arbitration

These factors will be explained in more detail below according to each popular company. Once you know the legal options available to you, you can decide how to proceed. You can also weigh the potential obstacles, such as limited damages or where you can sue.

File a Consumer Complaint

Another option is to file a complaint with your state’s attorney general’s office. They have the power to enforce state consumer protection laws and may be able to help you reach a satisfactory settlement of your complaint with the VHR company.

You could also register a complaint with the Better Business Bureau (BBB). Most companies are concerned about their BBB rating and may be willing to resolve your concerns in order to avoid a negative review.

Recovering Losses From Carfax

Let’s start with Carfax. The report the used auto dealer gave you includes the language quoted above. As you can see, Carfax expressly states that it is not responsible for any errors or omissions in the report.

It further disclaims, or repudiates, any warranties. A warranty is a guaranty given by a seller to a buyer that a product meets a level of quality and reliability. By disclaiming any warranties, Carfax avoids legal responsibility for any mistakes in its reports. This language makes it much harder to get legal relief from Carfax.

Moreover, if you buy a report from Carfax yourself, you are bound by Carfax’s terms of use. The terms of use impose even greater limitations on Carfax’s responsibility, as well as your ability to get relief.

Small Claims Court

The Carfax terms of use require you to bring any lawsuit in small claims court. Small claims courts were created to handle claims that fall below an amount determined by each state’s law, which ranges between $2,500 and $25,000. In many states, you cannot be represented by a lawyer in small claims court.

Small claims court is probably the right place for you. The terms of use also limit any amount you can recover, known as your damages, to whatever you paid for your Carfax report. This amount is often around $50.

Arbitration

Maybe your damages are more than the small claims court will handle. If you want to try to get around the limitation on damages, you will need to pursue arbitration. Arbitration is a dispute resolution process that takes place out of court. Many people believe it is faster, less expensive, and more efficient than going to court.

Here’s how it would work. You and Carfax would select an independent third party called an arbitrator. The arbitrator would review the submissions of the parties, look at the evidence, and hear arguments. After consideration, the arbitrator would issue a decision. That decision binds the parties. In general, you cannot appeal an arbitrator’s decision.

Although some arbitrations are straightforward, many are complicated. Most often, people hire lawyers to represent them in arbitrations. If you are interested in arbitrating a claim, you should give strong consideration to consulting an experienced arbitration attorney. They can represent you, provide you with legal advice, and help you select an appropriate arbitrator.

Arbitration Opt-Out Option

Note that if you notify Carfax in the precise manner set out in the terms of use, you can opt out of arbitration. You have to do so within 30 days of the day you purchase or use a Carfax report.

If you do opt out of arbitration and want to sue Carfax in a court other than small claims court, you are limited by the terms of use to file in state or federal court in Fairfax County, Virginia. Unless you live near there, filing a lawsuit may not be worth the expense. You may want to consider discussing your situation with an experienced consumer protection attorney.

Buy-back Guarantee

On the bright side, Carfax does offer a buyback guarantee, limited as it may be. If publicly available information relating to the quality of the title of the vehicle is not included in a report, Carfax will buy the car back from you.

Recovering Losses From AutoCheck

Now let’s look at AutoCheck. AutoCheck’s terms and conditions similarly limit damages to the amount you paid for your report, which is about $25. They also disclaim any warranties, which makes it even harder to get any relief.

If you do decide to try to recover damages from AutoCheck, you can bring a lawsuit, and it does not have to be in small claims court. Nor is there an arbitration requirement, but you must bring your lawsuit in Cook County, Illinois. Once again, unless you live near there, filing a lawsuit may not be worth the expense.

AutoCheck also has a buyback guaranty. It’s a little more generous than Carfax’s, but it still is limited to a situation where publicly available information relating to the quality of title is not included in a report.

Consider Consulting a Lawyer

As you can see, trying to recover damages from a VHR company is an uphill battle. You have to avoid limitations on liability and disclaimers of warranties, which courts generally tend to enforce. You may have a better shot recovering from the used car dealer than from the VHR company.

If you are considering bringing a lawsuit, consider consulting an experienced consumer protection attorney. They will be able to advise you of your legal rights and help you decide what your best options are in your situation. Keep in mind that you have a limited time under the law in which to bring a lawsuit, so consider acting promptly.