“Show me the Carfax,” you say to a salesperson as he or she walks around the vehicle of your dreams. You know to say this because it’s a phrase that’s been ingrained in your consumer psyche. Little do you know that there are other companies that will show you the same information about a used car for less money.
Dealers claim they didn’t know, either.
Carfax sells its services to both private car buyers and dealerships, but the company has allegedly been hyper-aggressive in selling its services, and it’s been doing it at higher prices. That has angered 120 dealerships into joining a $50 million antitrust suit against the company. According to Automotive News, another 50 want to join in, too.
Dealers are charged $16.95 per Carfax report, or between $899 and $1,599 per month for unlimited use depending on the size of the dealer. Also part of the suit stipulates that some sites that allow people to list their cars mandate that shoppers have to use Carfax to check out the vehicle history reports.
There are 10 different companies that are certified by the National Motor Vehicle Title Information System to do what Carfax does. Alas, we’ve not heard of them, either.
This lawsuit is sort of akin to if graphic designers were to sue Apple because its computers have the most design-friendly interfaces. It’s not Carfax’s fault that it has successfully marketed itself to become a trusted brand. A federal judge will soon rule as to whether or not it’s a monopoly, however, which could open many other cans of worms in the future.
Source: Automotive News (Subscription required)
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By Jacob Brown