Last week’s announcement that more than 120 auto dealerships are suing Carfax for antitrust violations points to the important role that vehicle service reports are playing in the automotive aftermarket. The lawsuit claims that Carfax, the leading provider of vehicle service reports, has excluded competition and results in higher used car prices for dealers who furnish the reports to customers, and for consumers who purchase the reports on their own. The dealers are seeking $50 million in damages.
It will be interesting to see how the court rules in this case. But in the meantime, no one can question that vehicle service reports are playing a bigger role in the automotive aftermarket, and independent repair shops have to understand that the reports have empowered both the car owners and buyers. They have also created new opportunities and challenges for the aftermarket.
About two years ago, Carfax launched its Carfax Service Network, a service information database that aftermarket shops can access to improve their customer service. Carfax claims there are 25,000 shops providing information to this database and 1 million service records are being added daily. This is a tool that no player in the aftermarket can afford to ignore.
In February, Carfax announced its service history check. As reported by VehicleServicePros.com, this web-based feature gives members quick access to VIN-specific maintenance details.
The service history check makes it easy for shops to access service records. According to shops interviewed by VehicleServicePros.com that have used it, the function decreases the time needed to look up information and reduces data entry errors. The web-based service history also includes the name and contact information of participating shops that provided service.
The service history report benefits the car owner. While the tool is not perfect – since it is only as good as the data that service providers willingly provide – it alerts the owner what needs to be done with the car. The data is particularly important for customers who are concerned about their car’s resale value.
Aftermarket shops have a lot to gain by utilizing service history reports and providing data to services such as Carfax, but they face some questions. Do they let customers know they are sharing their car’s service history? Some customers don’t want their records made public.
There is also the issue of how reliable the reports are. Postings on automotive Internet forums indicate that neither shops nor customers are fully sold on the reliability of these reports.
In time, the information services will find ways to improve the reliability.
But in the meantime, independent shops have to decide whether or not they want to make use of service history reports. The recent lawsuit proves they have become a factor in today’s automotive aftermarket.