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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 November 16, 2012 at 1:41pm

Comment by Debra L Bly on November 16, 2012 at 12:51pm

Jim, you are right, Car Fax is still only saying no flood damage reported meaning it could come in over the next couple weeks-months. So they can say it is GOOD NEWS but they currently have no solid information one way or the other.  With everyone talking about transparancy in dealership communications with consumers and how we have to get better at that - it seams this particular vendor is creating quite a smoke screen with no actual truth in their actions with customers and dealers. 

Comment by Debra L Bly on November 16, 2012 at 12:40pm

Jim, what I was trying to point out is the dealers regular vehicle car fax still show potential damage but the flood car fax on carfaxes website show the vehicle has no flood damage.  (i ran each of them one after the other.  So dealers are loosing out on the updated no damage report.

 

Comment by James A. Ziegler on November 16, 2012 at 12:32pm

You're right Debra BUT it's too soon. If it was Flood-Damaged, I doubt Carfax would have that information yet. They have still created suspicion on Northeast cars in general. The good news is we can show customers the CarFax warnings and educate them it has made their cars worth a lot less because of CarFax tactics.

Comment by Debra L Bly on November 16, 2012 at 12:22pm

Jeremy,

I ran the same vin number that you had given in your first example through the link that Jim Z had just provided right now. On your Car Fax link it still shows potential Flood Damage however on the Car Fax Flood link it shows clean for flood damage??????????

Comment by James A. Ziegler on November 16, 2012 at 12:08pm

On CarFax website. ALERT: Hurricane Sandy flooded cars along the East Coast, including major metro areas like New York City. There are concerns that many of these cars will be cleaned up and resold. Don't unknowingly buy cars flooded during Sandy, Katrina, or any other storm. Check for flood damage here first.

http://flood.carfax.com/

Comment by James A. Ziegler on November 16, 2012 at 11:38am

I am aware they did something similar in 2005 with hurricane Katrina BUT that still does not make it ethical or right.

Comment by James A. Ziegler on November 16, 2012 at 11:31am

We need to educate consumers that CarFax is intentionally lowering the value of your trade-in by inference. 

Comment by Keith Shetterly on November 16, 2012 at 11:15am

Actually, what these kinds of warnings do to dealers is lower the average ACV across an entire region of the country.  They cost dealers real money, in other words.  For any company that issues these types of broad warnings as part of their direct business model, it's just legal CYA to them.  That's all just my opinion.

Comment by James A. Ziegler on November 16, 2012 at 11:11am

Jeremy I am disappointed they do it at all. It is subliminally telling consumers not to buy cars in the area, but rather you're better off buying your car from a dealer in another part of the country. 

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