Carfax

I think Carfax is killing the used car market. Every other car has an accident on Carfax and it's hurting a good car with a minor repair. What do you think ?

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Permalink Reply by MANNY LUNA on March 21, 2011 at 2:01am

Not really Dru,

When selling used cars I don't ever want to sell the customer a bad car, I always asked the customer to take the car to a personal machanic to make sure the car check out.

When the customer would came back from having the car checked out there could be a couple of items that need to be fixed and I would work the price out with them.

Did I lose a sale sometimes? Yes I did but I also gained the customer trust and it gave me a chance to find another car for them that check out OK. I seen not just carfax reports that were wrong, I seen all of them that had mistakes.

Believe me when your selling aots of used cars, there is no time for HEAT or Unhappy customers on the showroom floor.

Permalink Reply by Matthew Coleman on March 21, 2011 at 8:44am

Is there nothing in the pricing that can be done to circumvent the negative perception of a car with a small wreck & repair?  I would think that cars with perfect histories would go at a used car premium, while cars with minor accidents would go for less.  It would be expalined to a buyer as a supply and demand issue.

Permalink Reply by keith millard on March 21, 2011 at 9:28am
Carfax has no business implying a value of any vehicle.They have overstepped their purpose.
Permalink Reply by Rudolph Harris on March 21, 2011 at 9:33am
I personally think Carfax is a far overvalued tool in car shopping. I also think they need to dial back their media presence. If they were in the practice of "verifying" any derogetory information they post about a specific car, they would be an asset. Our dealership recently aquired a totally non damaged vehicle that was involved in a theft. According to the "Carfax" report, it had serious damage, the vehicle was a TMU, and the warranty was voided. And also warned to stay away from that vehicle.  NONE of that was accurate and they refused to ammend the report. How is that a valuable tool?
Permalink Reply by keith millard on March 21, 2011 at 9:38am
 I have had erroneous Carfax data changed promptly by Carfax if you have the proper supporting documents,I will say that, but I do not think they should be venturing any opinions on the value of a vehicle they cannot see.
Permalink Reply by Jason Carroll on March 21, 2011 at 9:42am
In my Humble opinion, this isn't hurting the used car market.  The responsibility we have as Sales people is to help our customers find a car.  Carfax is a tool for both us and the consumer if properly used.  Give the customer the opportunity to choose an "upgrade" that hasn't been in an accident.  Or better still something still in the same price point that hasn't been in an accident but has a few less options.  The commercials present us as the type of people who would want to hide things.  If you present the Carfax as evidence of prior statements, it immediately provides credibility.  When your helping them find the right car...you should already know if a Car accident (even a fender bender) is a deal breaker for them, If so Avoid showing those cars.  Remember your there to serve the customer and help them find one of their largest purchases of their life.  This might also be a reason to ACV those trades differently, knowing that regardless of "Book Value" most dealerships sell based on Market Value.  If its causing that big of a problem, make it a great tool for a different ACV.
Permalink Reply by John Wolf on March 21, 2011 at 10:06am

A minor repair when disclosed to every potential customer early in the process should not be a big problem handled professionally.  I personally disagree with service history being posted as it may or may not show the true story of maintenance history for any vehicle.  Every vehicle history service (CarFax, AutoCheck, etc.) serve as a good tool for odometer history, title history, and salvage/rebuilt history that adds to our dealership's value story with our customers.

The problem is the standard by which CarFax labels a vehicle with major damage.  Where is that standard disclosed?

Permalink Reply by Rudolph Harris on March 21, 2011 at 10:14am
John, You took the words right out of my mouth that I was looking for. They have no standard for labeling a vehicle. They also make no effort to verify any of the information that they put on the report. While their media presence would imply that you are getting the "true story" that isn't exactly the case.

John Wolf said:

A minor repair when disclosed to every potential customer early in the process should not be a big problem handled professionally.  I personally disagree with service history being posted as it may or may not show the true story of maintenance history for any vehicle.  Every vehicle history service (CarFax, AutoCheck, etc.) serve as a good tool for odometer history, title history, and salvage/rebuilt history that adds to our dealership's value story with our customers.

The problem is the standard by which CarFax labels a vehicle with major damage.  Where is that standard disclosed?

Permalink Reply by Steve Devereaux on March 21, 2011 at 10:19am
90% of the cars that are in decent shape have clean vehicle history reports.  I don't think it's killing the used car market because it builds value in most used cars on the road.
Permalink Reply by Bryan K. Eden on March 22, 2011 at 6:55pm
I had a Lexus with minor damage really it was only a scuffle however the other drivers car had more damage. This did hurt my efforts to sell. I do believe however for the most part carfax is on top of their game.
Permalink Reply by Marsh Buice on March 24, 2011 at 8:54pm

Great comments by all of you guys. Here is my opinion on the Carfax discussion:

  • I feel Carfax betrayed its customer base-the dealers. Before a Carfax was a household name, we the dealers used it so that we could make better decisions when appraising vehicles. Carfax needs to report the facts and let the dealers determine what they "should sell it for."
  • Just because a vehicle has been wrecked does not make it a bad apple--no more so than if the pipes burst in your home they dont total the house...they make the necessary repairs to restore your home back to (or better) what it once was.
  • Interview your customer who is trading in the vehicle and find out exactly what happend so that your prospects know the story; most previous owners of the car do not mind telling the customer about their vehicle-just make sure a salesperson is in the room to avoid any mishaps :)
  • We post a moroney size label on our used cars with the first page of the vhr (Autocheck) which gives a summary of the vehicles history.
  • We have also seen cars that had paintwork and nothing reported on the VHR. Does that mean it's a "good car?"

Customers need assurances; the more info you give them the more at ease they will feel and the more credibility you will receive because you are showing them you have nothing to hide.

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