Credibility problems for Carfax?
New car sales are brisk. Used car sales are strong too and used car prices are increasingly reflecting that more consumers are interested in cutting their overhead cost and avoiding unfriendly auto financing and burdensome loans associated with new car purchases.

Naturally competition increases and some used car dealers may be less than scrupulous about disclosing any discouraging news about the condition of their vehicles.

Anyone who's seen Carfax TV commercials lately knows that the company does its best to alleviate consumer anxiety... Their ads suggest that consumers learn all the facts they need to make an informed decision just by 'asking for the Carfax'...

But a recent report from ABC News '20/20' says placing your trust in Carfax may lead to disappointment.

Frankly, it was an admirable piece of news reporting.

20/20 interviewed Danny Chaney, an Oklahoma man who bought a truck he thought was in fine condition.he spent $20,000 for the vehicle and soon learned that the truck's frame had been severely damaged in a wreck.

He learned the truth about his car when it was towed and inspected by a mechanic. But just to be sure, ABC News took Chaney's truck to GW and Son Auto Body in Oklahoma City to have it inspected by a second mechanic, Brandon Lovato.

Lovato "I'm definitely deeming the vehicle unsafe to drive," said Lovato.

Danny was shocked when he first learned that his vehicle had frame damage. That's because he was shown a Carfax report -- a history of the vehicle purchased by buyers, and also dealers, all over America. A green check mark signified no accidents or damage reported to Carfax.

"I bought into it, man. I was sold. If it didn't have a good Carfax behind it, I wasn't going to buy it," Chaney said.

Of course they interviewed Carfax management too. At Carfax headquarters, in Virginia, Communications Director Larry Gamache proudly said millions of consumers all over America mention the company by name when they're car shopping.

But he admitted that the company is not vouching for any vehicle's condition; it's only stating that it is unaware of any problem.

"We have a database of 12 billion pieces of information," Gamache said. However, he added, "we don't know everything about a used car's past."

How much don't they know?

"It's impossible to know how much we don't know," he said.

Click here for the broadcast of the 20/20 report:
ABC-TV's 20/20 investigation on Carfax