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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. 

Views: 5570

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Comment by David Moore on April 27, 2013 at 5:59am

Carfax don't give true reports anyway ...pulled a carfax on a car that was given to me by a friends 80 year old mom cause she can no longer drive after she turned left into someone ...the car fax stated minor front end damage and Airbags did not deploy...but both driver and passenger Airbags did deploy ..after replacing core&bumper supports and windshield and Airbags and Airbag module

Comment by Jason Manning on March 19, 2013 at 8:59am
Comment by Jason Manning on March 17, 2013 at 9:27am

If I was a car buying consumer that watched that episode, I'd go to the dealer and ask for an Autocheck Report.  It was a heck of a plug for them.  It was as if Carfax wasn't even prepared for the questioning.  They came across as typical car salesmen.  It was a train wreck to me.

Comment by Tom Gorham on March 17, 2013 at 8:00am

Sadly, I think many salespeople have been mislead as the consumer has.  This article does put things into perspective.  Thank you for the link and for your advocacy!

Comment by James A. Ziegler on March 17, 2013 at 7:28am

You're right Tom, but at least I was able participate in the research and to steer 20/20 producers in the right direction to uncover CarFax fraudulent business practices as I perceived them to be.  

Comment by Tom Gorham on March 17, 2013 at 7:13am

Great story.  I wish it showed the dealer's side that you offered Jim.  It still perpetuated the myth of the bad salesperson misleading the consumer.

Comment by James A. Ziegler on March 17, 2013 at 6:31am

 I was supposed to be on the show BUT the producer wanted me to say the dealers were also at fault,I wouldn't do that.

This is in part, the email I received from Joseph Rhee, the show's producer... "Hey Jim, I had meant to call you but my schedule’s been crazed. We have decided not to pursue the dealer angle you’ve written about for now for our report.. this focuses more on the consumer point of view. But we will follow up on the story, so if there are developments with dealers revolting against Carfax, we will pursue"..... as you can see I was involved in this story with ABC News from the beginning.

http://abcnews.go.com/Business/trust-car-fox-hidden-camera-shows-cl...

Comment by Jason Manning on March 17, 2013 at 12:16am

Just saw the 20/20 episode from last night with Carfax defending themselves and their product.  It was a train wreck.  A complete train wreck.

Comment by James A. Ziegler on February 14, 2013 at 12:01pm

LAWSUIT AGAINST CARFAX -WOW - THIS IS GOING TO BE HUGE

Comment by James A. Ziegler on February 14, 2013 at 12:01pm

I just had an interesting conversation with Attorney, Lenny Bellavia who I have known for several years. His firm has represented dealers' interest in many high-profile lawsuits. Most notable they represented the Chrysler Dealers in the Bankruptcy.

He is preparing a Mass-Action Lawsuit against CarFax on behalf of the dealers and already has more than 100 dealers signed on. I am not involved... not yet anyway and this is the first I've heard of it and I am cheering because he has such a good track record for standing up when dealers are abused and for winning these cases.

Employees should certainly make your dealer aware of this. If I was a dealer myself, I'd be on board immediately. My opinions of CarFax are well known by what we expressed on this blog, in speeches and other appearances. I really hope dealers get behind this.  I've posted his contact inf below and I am assured he reads email on the weekends. 

LBellavia@Dealerlaw.com 

Leonard A. Bellavia, Esq.

Bellavia,Blatt,Andron & Crossett, P.C.
200 Old Country Road, Suite 400
Mineola, NY 11501
516-873-3000  Fax 516-873-9032

PROPOSED DEALER LITIGATION v CARFAX

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