Carfax Business Model | Guide to Building a Business like Carfax

Shahzad Masood


Carfax is very popular when it comes to providing vehicle history reports for car buyers, sellers, and dealers. Since the company was founded in 1984 they have focused solely on providing vehicle data to the general public.

If you want to build a vehicle history business like Carfax, you need to understand the Carfax business model. This article clearly explains everything you need to know to get accurate vehicle data and provide data to consumers, auto dealerships, and other businesses.

What is the Carfax business model?

Carfax’s business model is straightforward. They focus solely on building the most comprehensive data set about vehicles on the road and providing this data to car buyers, sellers, dealerships, and other businesses.

The information provided by Carfax includes:

  • Accident records
  • Frame or structural damage
  • Total loss accident history
  • Ownership history
  • Service history
  • Open recalls
  • Vehicle usage
  • Title information, including salvage or junk titles
  • Odometer rollbacks
  • Flood damage

You must be wondering how Carfax collects and maintains their data. Let’s find out in the next section.

How does Carfax get their information?

Carfax collects their data from several government agencies, manufacturers, and trusted sources including:

  • State DMV records in the US and Canada
  • Auto auctions
  • Insurance companies
  • Auto manufacturers
  • Repair centers
  • Dealerships
  • State inspection stations, and more

After collecting data, they employ rigorous verification processes and ensure their vehicle history reports are up-to-date with the right and accurate information.

Carfax Business Model Canvas

Key Partners

  • DMVs
  • Auto auctions
  • Insurance companies
  • Financial institutions
  • Auto manufacturers
  • Repair and maintenance centers
  • Dealerships
  • Car rentals
  • State inspection stations
  • Fire departments
  • Police departments

Key Resources

  • Over 100,000 sources
  • Data provided by the myCarfax App
  • SEO 
  • Web based services
  • IT infrastructure
  • Data team
  • Marketing team
  • Affiliation channels

Value Propositions

  • To be the top provider of vehicle history information to car buyers, sellers, and dealers.
  • To help consumers make informed purchase decisions and avoid potential problems
  • To provide used car records and maintain an up-to-date database in North America
  • To help shopping for used cars less likely to go wrong
  • To help consumers buy or sell confidently with history reports
  • To provide a free car maintenance app and recall alerts

Customer Relationship

  • Transparency
  • Trust
  • Web based service
  • Real-time information
  • B2B relationships
  • Customer support

Customer Segments

  • Individuals
  • Consumers
  • Businesses
  • Dealers


  • Website
  • API Integration
  • My Carfax App
  • App store
  • Google Play
  • Vehicle history and research
  • Social media
  • E-mail
  • Offline marketing

Cost structure

  • Data acquisition costs
  • Data management costs
  • Marketing and advertising expenses
  • Operational costs
  • Affiliate fees
  • Software development
  • Legal and agreements
  • Employees
  • Offices

Revenue streams

  • Sales of vehicle history reports
  • Bulk purchase plans
  • Subscription services for B2B customers
  • Revenue from adverts

Carfax Reports: The best-selling Product from Carfax

A vehicle history report is a document containing the past records and history of a vehicle. With a carfax report, consumers in the market can easily identify damaged vehicles, stolen vehicles, cars with title brand records, and more.

With over 286 million vehicles on the road in the US, you can expect to find more vehicles in the used car market and customers will always seek as much information as possible. So, if you are planning on setting up your own vehicle history business, now is the right time to do so. 

How do you get started?

Building Your Own Vehicle History Business

To create a similar business model, you need to follow these steps:

Build a Website or Mobile Application

First, you need to create an online platform via a website or mobile application. This will be the primary interface for your business and you can clearly state your services and products here for consumers.

Make sure to prioritize user experience and easy-to-understand navigation when designing your website or app. Through these platforms, you can provide as much information as Carfax and even more services.

Application Programming Interface (API) Integration

When it comes to setting a business like this, you need to gain access to an accurate database or data source. Do you need to collect data yourself? No. There are already existing databases with millions of vehicle data that you can rebrand and resell as yours.

There is no Carfax API available, but fortunately Vehicle Databases provides alternatives that can be used to gain access to vehicle information from their database having over 60 millions vehicle records.

After registering, you will be able to test the accuracy and speed of their APIs with 15 free credits and then you can proceed to integrate with your website or mobile application. Some features you can expect with their APIs are:

  • Support for modern and classic VINs
  • 99.99% uptime reliability
  • Scalability and adaptability
  • User friendly interface
  • JSON and HTML formats
  • Fully Customizable
  • All vehicle types and manufacturers
  • Detailed Documentation

Legal and Compliance Considerations

Now that you have data and a platform to reach out to consumers, you should think about the legal requirements next.

Since you’ll be handling sensitive vehicle information, it’s crucial to navigate legal frameworks to safeguard user data and maintain regulatory compliance. This may involve data protection laws, privacy regulations, and industry-specific guidelines.

Make sure you’re safe and not missing any requirements. Also provide a clear privacy policy and terms and conditions that clearly highlight how user data will be collected, stored, and shared.

Marketing and Partnerships

Now it’s time to create strategies to attract consumers and grow your business. Make sure to utilize search engine optimization to create interesting ads, campaigns, blogs, videos, and more. Try to collaborate with other bloggers in your niche, create an affiliate program, and utilize social media to reach a wider audience.

You can also get a partnership with automotive businesses like dealerships, auto service centers, insurance companies, classifieds or online marketplaces, and others. This would help improve your business’s credibility and visibility.

In conclusion, understanding Carfax’s business model is crucial if you want to set up a similar business. With Vehicle Databases APIs, you can gain access to every single vehicle detail you need to provide accurate vehicle history reports. With their white labeling feature, you can get these reports in json or html format, rebrand, and resell to your own customers.

Get started now!

Frequently Asked Questions

How does CARFAX make their money?

Carfax makes their money from selling vehicle history reports to car buyers and sellers and also provides this service to over 30,000 dealerships. B2B businesses in need of vehicle history reports are the main source of revenue for Carfax.

What type of business is CARFAX?

Carfax is simply a data-driven business that compiles vehicle data from different sources including government agencies, car manufacturers, dealerships, auto insurance companies, and more. 

Where does CARFAX get their values from?

Carfax collects their data from several government agencies, manufacturers, and trusted sources including:

  • State DMV records in the US and Canada
  • Auto auctions
  • Insurance companies
  • Auto manufacturers
  • Repair centers
  • Dealerships
  • State inspection stations, and more

What is the annual revenue of CARFAX?

Carfax has around 1,000 employees with an annual revenue of $500 million. It had the highest in 2023 with a paid revenue of $500 Million.

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