Does 'Car Fox' Tell You Everything You Need to Know?

March 15, 2013— -- Last August, 54-year-old Danny Chaney was heading down Highway 11, in rural Oklahoma near Ponca City, his only companions classic rock on the radio and the 2012 Chevrolet Colorado truck he'd just bought from a major area car dealer.

As Chaney slowed to make a turn, he said, everything froze, and the vehicle veered off the road.

"The passenger wheel locked up and just pulled the truck off to the side of the road," Chaney told ABC News.

That moment revealed a secret unknown to Danny before he spent twenty grand on the truck: the truck's frame -- the bones of the truck -- had been severely damaged in a wreck.

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Danny 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.

"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.

Chaney said he'd been hooked by Carfax's clever TV ads, which feature the wily "Car Fox," who is quick to bust any used car dealer who refuses to "show [you] the Carfax."

"The dealer will not be stupid," said Kansas City attorney Bernard Brown, who has represented car buyers in suits against sellers. "They will have the Carfax checked before they sell it to you, saying, 'the Carfax [shows] this car has never been wrecked."

"A Carfax report is an unreliable car history. It's not complete. The consumer needs to be careful," said Kathi Rawls, Danny Chaney's lawyer.

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.

"They actually come in and say, Show me the Carfax," he said.

Carfax reports obtain data from police departments and insurance companies, among other sources.

"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.

"20/20" co-anchor David Muir played Gamache video of the salesman saying, "A clean Carfax means there's no accidents on it or nothing whatsoever."

"But that isn't what I said," Gamache said, "and it's not what anybody here at Carfax said," said Gamache. "We do say on the Carfax vehicle report that no accident has been reported to Carfax."

But is that what used car salesmen tell you when you try to buy a car? ABC News producers with hidden cameras went to several used car dealers to find out.

At a dealership in Union Township, N.J., a producer asked about a 2011 Mazda CX-7 and a 2011 Hyundai Sonata. The salesman mentioned Carfax within minutes.

"I'm going to show you both of the Carfaxes," he said. "I'm going to show you everything."

Both vehicles' reports showed no accidents or damage reported to Carfax.

"When you look at the Carfax -- no accidents, one owner," the salesman said. "You can't beat that Carfax."

The salesman's boss chimed in.

"The Carfax'll tell you if it's been in an accident. It basically gives you the history of the vehicle of where it's been and stuff like that. You know, we don't keep anything on our lot that has accidents," he said.

In fact, according to one of Carfax's competitors, Autocheck, the Hyundai had been in a rear-impact collision. And the Mazda had been in a multiple-impact collision -- the police report said it had been hit in the front and the back. ABC News also contacted the car's former owner, who said he was in the accident and confirmed that they were the middle car, so the car got hit on both sides.

It wasn't just this one dealer. The ABC News investigation revealed dozens of used cars with clean Carfaxes -- even though the cars had been in accidents, and others had frame damage, according to Autocheck. Like Carfax, Autocheck also includes a disclaimer about its comprehensiveness, but it does boast one important source of information that Carfax doesn't have: Car auction data.

ABC News returned to the New Jersey dealership, armed with the police report saying the Mazda had been in a major accident.

The salesman defended himself by saying, "I don't get under the hood of these cars or anything like that. I print out the Carfax. ... If I print out a Carfax and it says that it's green, that means the Carfax is 100 percent."

When asked if there was a problem telling us that the clean Carfax he showed us actually meant no accidents (as opposed to none reported to Carfax), the salesman said, "You have to take that up with the Carfax. You got to take that up with the Fox himself, I mean."

At least one family -- the Chaneys -- said they wouldn't be outfoxed again.

"The commercials have so much hype to them," Danny Chaney said. "I won't trust Carfax. And I will tell everyone I know, Don't trust Carfax."

Note: Since this story was published, Carfax informed ABC News that they have updated the Carfax reports for the following vehicles mentioned in the story: the 2012 Chevrolet Colorado, the 2011 Mazda CX-7 and the 2011 Hyundai Sonata.