Well, folks, here we are. I've decided to take a quick break from my usual schedule of writing columns that are exceptionally brilliant, and highly entertaining, and sometimes even truthful, to craft a piece on car insurance. That's right: car insurance. Do you hear that? It's the sound of hundreds of readers collectively saying to themselves: "I wonder what's on Autoblog today."
But don't go away just yet, because today's column is far more exciting than a typical car insurance story. Or at least it certainly seemed that way when I came up with it in the shower this morning.
If you're still with me, our topic today is the connection between car insurance and Carfax. For those of you who aren't sure what the hell I'm talking about, Carfax is one of these companies that provides vehicle history reports when you give them a VIN number. Its primary marketing strategy is a talking fox. Car insurance, meanwhile, is the kind of insurance you get on your car. Its primary marketing strategy is that you'll be arrested if you don't have it. Are we good?
Now, regular readers will remember that I've written about Carfax before. Just a few short weeks ago, in fact, I wrote a column entitled "No, Carfax, That Car Hasn't Had Eight Different Owners," where I lambasted them for reporting that a vehicle gets a new owner approximately each time it's breathed on. Really, it was an excellent story, and I strongly suggest you read it instead of anything by, say, Travis.
But I'm not going to criticize Carfax today. Instead, I'm going to talk about how it's the greatest thing to happen to the car insurance industry since that four-week period in 2010 when Lindsay Lohan was behind bars. And the reason is: Carfax has made everyone scared of filing an insurance claim for a minor accident.
To explain what I mean, we must take a trip in time back to the 1970s. When you got in a minor accident during the 1970s, what would happen is you would get out of your car, and the other driver would get out of his car, and you'd punch each other in the face. Then you'd go about your day. It was a simpler time, the 1970s, and I think we'd all gladly return there, if not for the hairstyles.
The problem is that people became very litigious during the 1980s, which meant that if you got in one little fight over one little traffic dispute, you could find yourself getting sued for making the other driver spend the rest of his life eating soft foods through a plastic tube. And that meant people stopped punching each other after accidents. Instead, they'd call their insurance companies.
Now, this went on without issue for years, throughout the 1980s and 1990s. People would get in fender-benders, they'd call their insurance companies, they'd take their cars to body shops, and POOF! The car would be repaired, good as new, four weeks after the body shop initially said it would be done.
And then came Carfax.
Now that we live in a post-Carfax world, what happens after a minor fender-bender is this: both parties get out, they survey the damage, they check things over, and then they each agree they'll pay for the damage out-of-pocket, no matter how bad it is. "Let's just roll it back on to its wheels," you hear people say, at accident scenes. "I can climb through the broken window and drive it home!"
And why do people do this? Because we now have Carfax reports to tell us every little detail about a car's history — and that means having an accident on your Carfax report can cost you more than the accident itself.
This is especially true of high-end cars that can really lose a lot of value if they have a bad Carfax. For example: my Ferrari is worth quite a bit right now, as a low-mile, stick-shift coupe with original paint and no accident history. But if I was involved in a minor accident, and that accident showed up on the Carfax report, no one would want to buy it. Really. If I were I list it for sale, potential buyers would call and say things like: "Sir, I notice your 360 has been in an accident. Would you be willing to trade it for this decorative vase?"
Now, I'm aware that some insurance companies pay for diminished value, and that's great. But diminished value claims rarely cover the car's actual diminished value, unless you hire a lawyer, and an appraiser, and a mechanic, and by the end of it, you've paid more than your diminished value claim just to have the car assessed for diminished value.
And this is why Carfax is a great deal for the insurance companies: a Carfax accident, or the mere threat of a Carfax accident, is enough to keep people from filing small insurance claims. So instead we must pay out-of-pocket for everything while silently wishing we could go back to a simpler time, an easier time, a better time. A time when we could just punch the other driver in the face.
@DougDeMuro is the author of Plays With Cars. He owned an E63 AMG wagon and once tried to evade police at the Tail of the Dragon using a pontoon boat. (It didn't work.) He worked as a manager for Porsche Cars North America before quitting to become a writer, largely because it meant he no longer had to wear pants. Also, he wrote this entire bio himself in the third person.