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Jim Ziegler asks: Is It Time For the Retail Automotive Community to Rise Up and Get Rid of CarFax?

Enough is Enough!

Haven't you had it with all of these Data Pirates using our own customer information to defame us, lower our profits, alienate our customers... while at the same time they charge us through the nose to do us harm? 

 

Among the worst of them in my opinion is CarFax. They even believe they have the right to price our cars and trades.... too low of course. While at the same time CarFax exploits negative stereotypes that we are crooks in every commercial the Little Car Fox Rats out the dishonest bumbling and inept idiot car sales person. They charge us to defame us. 

Please read this article we just published in Wards Auto Magazine 

"My latest article is out and it's hot.  

Here are more than 250 Consumer Complaints and reviews about CarFax... look... http://www.consumeraffairs.com/automotive/carfax_inacc.html 

We have manufacturers supporting these people and requiring we do business with them. Let's get mobilized and scream at our factory representatives, reprint this article for your dealers, do press releases, and generally alert your State Dealer Associations and 20-groups. 

 

If a consumer asks for the CarFax, tell them it's $39.00. Whoever told you it was free was lying.

I am available to perform 20-group and Dealer Association Keynote Speeches on this subject. As of right now, I am calling out the Tribe to get on this subject. JIM

CarFax Gets Its Facts Wrong

Dealers tell me horror stories about CarFax experiences with customers. Those range from missing information to erroneous information.

I have a problem with data pirates who use dealer information against us, damage our reputation and cause consumer distrust.

 

To me, CarFax is high on that list. Let’s look at what this vehicle-history firm does.

 

It tells consumers its reports are free but charges dealers for them. So, if a dealer asks customers to pay for the report, they look at you like a criminal.

 

CarFax runs TV ads featuring deceitful car salesmen hiding the truth until the little Car Fox character shows up and sets the customer straight. This sets up CarFax as the Consumer Protector battling the Evil Car People.

 

The company uses dealer data to tell customers what to demand for their trade-in, based on what CarFax says is the value.

 

So, here we have another vendor setting prices and limiting dealer profits and charging dealers while it rummages through their customer information. We give them data and pay them to take it from us.

 

But beyond all that, CarFax is creating huge liability risks to both dealers and the auto makers.

 

“CarFax, lawsuit, settlement.” Enter those words in a Google search to see how many lawsuits have been filed against CarFax, from class actions to individual filings.

 

I Googled a number of other vendors using the same search words and couldn’t find anywhere near as many lawsuits and complaints. In one case, a court rejected a $500,000 award because the plaintiff attorneys said it was too low. 

 

Most of the allegations center on inaccuracy of information. I can attest to that. A relative bought a car two years ago, and the dealer showed us the CarFax showing a clean history. Then, recently when he tried to trade it in, another dealer said CarFax indicated the airbags had been deployed in an accident before he purchased the car.

 

Yes, CarFax does have some sort of disclaimer somewhere on its form saying it’s sort of possible its information might be wrong.

 

Does that give it a license to insinuate that consumers should rely on its information when buying? Do some consumers then believe a dealer altered the CarFax report and falsified information if it turns out to be wrong? Now we have more animosity.

 

Dealers tell me horror stories about CarFax experiences with customers. Those range from missing information to erroneous information saying a car had a problem (thus devaluing it) when it didn’t have a problem at all.

 

I am amazed some auto makers and even some dealer associations have jumped into bed with this firm, either endorsing it or requiring dealers to offer CarFax history reports to consumers.

 

The first time a consumer sues your dealership over anything involving CarFax, point to the auto maker that required the vehicle history. That auto company  should be a co-defendant.

 

CarFax has reached out to me several times asking me to meet with them. They know I talk about them in speeches and blogs. I recently had a trusted third party ask me to meet with CarFax.

 

I told that person there’s no reason for me to meet with these people. I think they are disreputable and they deliberately cause consumers to distrust dealers.

 

I do not believe their information is complete nor do I believe it’s fully accurate. They indirectly set unrealistic sales prices and interfere with the sales process. There’s little chance they could say anything to change my mind. And I’m not for sale.

 

If I were you, I would certainly examine my affiliation with CarFax. Then I would make doubly sure the company was not accessing my dealership management system to get information.

 

Then, I would tell consumers when they asked for the CarFax report that I don’t use it because the results can be erratic and unreliable. If the consumers insist, charge them for the report. It sure isn’t free.

 

Keep those calls and emails coming.

 

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com.

WardsAuto readers also may comment on this article by logging in or registering. 

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Comment by Keith Shetterly on October 30, 2012 at 8:31am

Gary, whether this becomes another data bandwagon or not, a valid point is that a vendor has an opportunity to use the data to HELP the dealer or use the data to HURT the dealer.  Just because a stereotype exists doesn't mean it's fair game for advertising in all cases, except, of course, in politics.  The vendor's use of the data, then charging dealers for the consumer's "free" services, and then dis'ing the dealer is just about profit margin:  The vendor could, and should, cast their service as helping consumers AND dealers meet in honesty.  Such an effort would be a true partner, and include respect the fact that the dealer is PAYING THEM.

And as to what you never read about lessening the distrust, the blogs about reputation and efforts in those areas (even to compliance) are here and around.  They exist.  What a blog cannot typically do is be anywhere near as loud as national advertising.

Then, again, should this blog light up as others have before, we may yet see another challenge to that thinking.

Thanks!

Comment by Gary Marcotte on October 30, 2012 at 8:12am

Reader discretion advised...sometimes folks think my pointed comments are mean...and I have no financial relationship to CarFax or Polk in any way.  Here are a couple of points.  1) If distrust did not exist between dealer and consumer, there would be nothing to exploit...I never read posts about lessening the distrust... 2) most of the data is not "yours"...it comes from State's (registrations and price), or Insurance Companies (collision data) or consumers (who consent to allow CF to pull their service data on some of their sites), or OEM's (warranty data), 3) really good dealers use these kinds of things like CarFax to show the customer they are trustworthy and embrace the data...offering it as part of their presentation before the customer even asks. 

The value of Big Data is that it can be used to help dealers a) select the right car, b) make a better presentation, c) coach their people and d) eliminate consumer distrust...I wonder if the industry would find more value in helping to use the data more effectively?  There is no evidence anywhere, if facts are considered, that transparent data does anything other than improve profitability in any industry. 

Comment by James A. Ziegler on October 30, 2012 at 7:25am

250 Reviews and Consumer Complaints about Carfax  Click the link and read what this consumer site has to say about CarFax.

 

Comment by James A. Ziegler on October 30, 2012 at 6:51am

Joe and Pete, you guys are just the tip of the iceberg. I have spoken to hundreds if not thousands of Car People who despise CarFax and what they do to us and our industry. They throw a lot of money around to buy leverage with the shows and the advertising... BUT, if we as an industry stand up and make individual decisions to get these people out of our DMS Computers and out of our dealerships, they will change or die completely. 

TrueCar changed positively, not great but the result is they now have a business model I believe most of us can live with. CarFax is about find out they are not bulletproof and invisible. 

Comment by Joe Tarell on October 30, 2012 at 6:14am

Jim, being an advertising guy from way back I agree completely.  The recent Car Fax and Cars.com campaigns defame reputable auto dealers.  It is sad when you are their source of income.  You pay these people to portray you as a thief or idiot.  I don't even like the Badger or any of the other so-called humorous commercials.  We have a trust issue in the car business and every one of us has to go to work every day trying to solve that, not promote it.

Comment by Pete Richards on October 30, 2012 at 2:37am

I quit using CarFax eight years ago, have saved I guess close to $150,000! AutoCheck is the the only way to go. Glad you brought the subject up. I too am tired of these company's stealing from us. I would not go back to CarFax if they were cheaper than AutoCheck!

Comment by James A. Ziegler on October 29, 2012 at 6:16pm

We know how to do viral, don't we ? This message is important, these people are parasites on dealers backs....

Comment by william robb on October 29, 2012 at 6:05pm

It will hit all over quickly now 

Comment by James A. Ziegler on October 29, 2012 at 4:45pm

The perfect Storm... I predict we are going to be on the verge of another Super-Blog here.... CarFax is resident evil and we know it... Stand up and let your voices be heard.

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