Our report on Carfax focused on the reliability of the well known vehicle history service.

But there's another related issue that's very important for buyers and sellers of used cars -- who is responsible for disclosing damages in a car that's up for sale?

Our story featured the case of Stephanie and Matthew Gehrs of Festus. Last December, they purchased a 2005 Jeep Liberty with 18,000 miles on the odometer. They bought their Jeep after seeing a Carfax vehicle history report showed no serious damage issues with the car.

They would soon learn that Carfax report was wrong.

After a minor accident in February, the Gehrs took their car to a dealer recommended by their insurance agent for repairs. The dealer discovered substantial twisting in the car's frame, indicative of a serious accident at some time in the past.

A little luck and some smart detective work on Matt Gehrs part led him to the Jeep's previous owner. She told him how she ran the car into a bridge pillar on Interstate 70 in North St. Louis County in the summer of 2007 -- just months before it was sold to the Gehrs.

So how did that 2007 accident not show up on the Carfax vehicle history?

The previous owner, who was leasing the car, was able to drive it home after the accident. At that point, the leasing company repossessed the vehicle and sold it at auction. A dealer purchased it and sold it to Matt and Stephanie Gehrs.

It's not clear who repaired the damage but what is clear is that all this took place without a police report ever being filed or an insurance claim being filed. In other words, there is no record -- at least no public record -- of the 2007 accident, the damages or the subsequent repairs. That's why the accident and the damage is not on the Carfax vehicle history for the Gehrs' Jeep.

A Carfax spokesperson was quite emphatic in stating to the obvious... that Carfax can not report information that doesn't exist. By the way, Carfax does not get any records from insurance companies.

Who's Responsible?

So, in cases like this, who is responsible for disclosing damage like this to a potential seller?

David Griffith, the public information officer for the Missouri Department of Revenue has a simple answer. The responsibility lies with the seller. And that applies whether the car is being sold by a licensed dealer or a private individual.

So if you take out an ad in the local paper, or stick a "for sale" sign in your car window, then you are required to tell the buyer if you know of any accidents or other conditions that may negatively impact the performance of that car. While previous accidents are the most common example, our recent flooding suggests another scenario that bears mentioning. It is not unheard of for flood cars to be cleaned up and dried out to such an extent that the water damage is not immediately detectable. But of course, flood damage is a serious issue and as such must be disclosed.

And it doesn't have to be serious damage. Griffith points out that if a potential buyer asks if a smoker used the car, then you have to disclose that.

Weak Laws?

So the law is clear. Unfortunately for consumers, it is weak.

Griffith says violations of the disclosure requirements are not criminal offenses. So consumers who discover undisclosed problems after purchasing a car have to seek remedies on their own and at their own expense.

And soon, it could be much harder for Missouri consumers to take any kind of court action in cases like this. A bill recently passed by Missouri legislators would make it harder to sue some dealers for selling cars with undisclosed damages.

Supporters of the bill say it protects both dealers and consumers, but critics say it serves only to shield dealers from legitimate suits.

The bill is awaiting Governor Matt Blunt's signature.

News 4 Investigates producer Steve Perron contributed to this edition of the Daily Briefing.

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