How Carfax has cornered the market on car history reports
According to an Automotive News report, Carfax has created undeniable brand cachet, and it has also arranged some deals that make it difficult for the competition to gain footing. Marketing agreements, inked with sites like AutoTrader.com and Cars.com, mean that dealers who would like to advertise on these sites are forced to use Carfax instead of less expensive competitors. AutoCheck, from Experian Automotive Inc, provides a similar service, and Cars.com allows for the use of AutoCheck, causing a battle between it and Carfax. At the moment, Carfax has roughly 32,000 dealers, compared to AutoCheck's 12,000.
Those dealers using Carfax are paying much more than those using AutoCheck. Pressure from clever ad campaigns and slogans like "Show me the Carfax," lead customers to think that Carfax offers the only legitimate vehicle history report available. That said, other dealers contend that Carfax has far more comprehensive reports, and favorable in-dealership support.
According to Automotive News, there are ten vehicle history report providers, including Carfax and AutoCheck, but in a market where the only competition is a near-unknown, Carfax can afford to do business like it is the only show in town.
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