Dealers are upset by Carfax price data
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Carfax advertises its reports to consumers. Now it is advising consumers on car prices, and dealers aren’t happy.
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Carfax Inc., known for its vehicle history data, has added vehicle value information to its reports. Dealerships that buy the service are furious.
In late April, Carfax History Impact debuted in the vehicle history reports that
accompany dealers' used-vehicle listings. It reviews a used vehicle's history
and advises that, based on that history, the vehicle is worth more or less than
the vehicle's book value.
Rob Fontano, digital sales and marketing
director at John Marazzi Nissan in Naples, Fla., is irritated. He says he was
caught off-guard by the addition.
"When did Carfax jump into the pricing
game?" Fontano asks. "They've refused to tell us what they're basing it on or
what book values. Part of the frustration is we're paying Carfax to add an
arbitrary feature on our Web sites that can confuse a customer."
spokesman Larry Gamache defends the product, saying it has nothing to do with
dealers' asking prices. He says the adjustment to book values can help dealers
hold onto gross profits and build confidence with consumers.
of factors affecting a vehicle's history, such as service history and whether it
has been in an accident, are analyzed to calculate History Impact value, Gamache
The values debuted in January Carfax reports accessible to dealers
only, Gamache says. From then through April, the company sent letters and
e-mails notifying dealerships about the new values, which derive from "actual
sale prices of vehicles with those history attributes," he says.
Carfax's field staff team, which calls on dealers, also detailed the
change, Gamache says. He adds: "We didn't spring this on anybody."
Carfax doesn't plan to drop the program. But Gamache says the company
takes the complaints "to heart."
A 2008 Cadillac
SRX crossover listed last week on the site of Douglas Auto Group in
Summit, N.J., was accompanied by a Carfax report that listed an odometer reading
of 34,844 miles and no reported accident or damage. The vehicle was reported to
have had two types of owners: rental and commercial.
Based on the
vehicle's history, its price should be $810 less than book value, the report
Ken Beam, creative marketing director at Douglas Auto Group, which
sells Infiniti and Volkswagen, says his dealership pays Carfax, up to $1,300 a
month so customers have free access to its reports on his Web site. If Carfax
wants to get into vehicle pricing, it should do it on its own Web site, not his,
"They don't know what I paid for a vehicle at an auction," says
Beam. "What gives them the right to say what I should sell it for?"
Paul, used-car manager at Goodson Acura in Irving, Texas, is less upset. He uses
the reports as a negotiating tool. Paul asks customers whether they will accept
the deal if he lowers the price by the amount stated in the reports -- and most
But he, too, says he was caught off-guard when he saw the values in
the history reports: "We were shocked and didn't expect it."
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