Yo CarFax and AutoCheck - time to chill on the scary stuff!

[Alex Snyder]

We have a "perfect-used-car" scarcity problem that ain't going away for a long time. The cream puffs are waaaaaaaay harder to find and the payments on the newer used cars are waaaaaay harder to afford.

Dealers are beginning to carry more and more 100,000+ mile vehicles as front-line pieces. They are going to need more help in merchandising those vehicles. Most cars are incredibly reliable now. You rarely see cars broken down on the side of the road. You rarely see cars getting flat tires. I remember when it was a common occurrence to see a car in trouble every few miles on the interstate. The things that break on cars built in the last 2 decades seldom stop the car from running.

We all know this.

What I have an issue with is that consumers get frightened of cars when a big deal is made about accidents and previous owners. Of the 50+ cars I've owned and sold privately, I just went through the first one, where multiple buyers were worried because I was the fourth owner of an insanely clean and low-mileage vehicle. That was due to a CarFax report I provided to them.

The screenshot at the top is of a perfectly nice 2014 Lexus GX460 that is priced right and has low miles on CarGurus. Two accidents were reported with no damage (that's a bit of a WGAS for me). It had three previous owners (another WGAS for me). As these cars age, more people will own them, and little fender benders will happen.

It is now time to provide shoppers with reassurance about the state of the used market or you're going to find your products becoming much less relevant... and maybe even undesirable for retailers to show as prominently as they have.

 

[Jeff Kershner]

Thanks for the wake-up call Alex. I've always been a 1 previous owner buyer with zero accidents, but anymore it really narrows the search results. So now I take the time to comb through the CarFax and see what the possible damage was.

Dealers taking extra time to describe the history, maintenance, reconditioned items for passing inspection on these older 100+K miles vehicles will WIN OUT!

 

[BillKVMotorCo]

I tell customers all the time that CarFax has made a boatload of money convincing customer's that this stuff is a big deal. They have some pretty fantastic marketing. I keep it pretty simple. I tell our guests that I don't devalue their car because of the CarFax, so I don't sell mine cheaper because of it. It's when dealers make the mistake of trying to use the CarFax report to devalue the guests vehicle that causes everyone problems.

 

[Jon Singo]

Carfax has made a boatload of money sticking their nose in places it doesn't belong. I prefer Autocheck for a few different reasons but it's harder to get customers on board due to their complete absence of marketing, vs Carfax marketing overload.

I always get excited when I see a TrueFrame or other similar inspection report on a Carfax listing accidents. It does wonders to diffuse the customer objections.

Makes me wonder if there's an opportunity in the current market to doing 3rd party inspections on all Carfax reports with accidents? What's a service like that worth?

 

[Tallcool1]

I used AutoCheck for years, but as @Jon Singo said there just isn't the name recognition. So enter CarFax.

The methods that CarFax uses to log a new owner are flawed, but I can't offer a solution. Customer Leases a car for 24 months, (Owner 1). Same customer buys out their Lease because the equity is amazing. (Owner 2). Customer cashes in their Equity by trading to an out of State dealership that gets the title placed into their State. (Owner 3). Now we have a 3 Owner vehicle that is really a 1 Owner vehicle.

Any Accident that is labeled Minor doesn't even get me to slow the scroll. If 2 cars bump each other in the WalMart parking lot and the police are notified...Accident. Not even a scratch and the Accident hits CarFax.

What I like about CarFax...Service History. I bought a Lincoln MKX a few weeks back. 165K miles. Every single service record was performed at a Lincoln Dealership. Tons of Maintenance. Most dealers shy away from those. Hell I usually do!

CarFax pricing is our new JD Power Retail. It is really easy to justify our pricing with the "we are a CERTIFIED CarFax dealership so we subscribe to their pricing model". I have no idea where my guys came up with that, but it works.