In ON, what should I know about CARFAX reports for car loans?

In Ontario, CARFAX Canada reports are a crucial tool for both lenders and consumers when considering a car loan, particularly in the 2025 market where transparency remains paramount. These reports provide valuable historical data, including accident history, reported damage claims, service records, and crucial lien information registered across Canada. For lenders, a clean CARFAX report can signify lower risk, potentially influencing loan approval and interest rates, as it helps verify the vehicle's condition and value.

However, it's vital to understand their limitations: CARFAX reports rely on reported data, meaning minor incidents, unreported repairs, or damage not filed with insurance or repair shops may not appear. While they offer a robust lien check, especially for PPSA (Personal Property Security Act) registrations in Ontario, a separate, direct PPSA search is often recommended for absolute certainty before finalizing a purchase to ensure no undisclosed financial encumbrances exist. Therefore, while a CARFAX report is an excellent starting point for due diligence and a key component in the auto finance process, it should always be complemented by a thorough independent mechanical inspection by a trusted mechanic and a personal visual inspection of the vehicle to uncover any potential issues not captured in the report.