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Carfax data comes from many sources

Date: Apr 1, 2005
Contributor: April

COLUMBIA — Entering the office of Carfax in Columbia is like remembering the best of the dot-com era.

Employees share computers in lab-like settings, wear blue jeans, and play darts if they want to let off steam. The lights are dimmed — a night owl's dream — and if it were a little darker, the office would look like a nightclub. The company, which uses more than 3 billion records to run background checks on used vehicles, has its two data centers in Columbia.

“People don't believe we are in Columbia, Missouri,” said Jim Noel, product services director. “We don't sit and wait for things; we make things happen.”

A local entrepreneur, Ewin Barnett, started Carfax in 1984 as a small business offering vehicle history reports to auto dealers. Today, 70 people work in the Columbia location, 150 are in the administrative offices in Fairfax, Va., and about 25 work from home offices around the country.

Barnett, 52, who is not with Carfax anymore and advises startup businesses from his Ashland home, said the company's name was short for “car facts.”

“I was looking at various data sources, and the data sold by the states for mailing lists had a lot of other vehicle information that nobody was paying attention to,” Barnett said.

Firms producing demographic studies or advertising specific products to, for example, Jeep owners, used to buy information from the states on magnetic tapes that contained not only the names and addresses of vehicle owners but also facts about the cars, such as mileage and previous title numbers.

Barnett started Carfax from his basement, where he stored countless magnetic tapes with data. At first, the company had records only for the state of Kansas, then for Missouri, then for Illinois, Iowa and Arkansas. Gradually, more records kept pouring in the database.

In the late 1980s, CBS' “60 Minutes” did a story about Carfax. The next day, the phones at the office were ringing off the hook, Barnett recalled.

“As we grew, we had much more value,” he said.

Barnett did all the programming by himself in the early days, but over time attracted investors and hired other programmers.

Before the Internet became popular in the late 1990s, only car dealers were Carfax customers.

Today, the company continues to buy new records and keep its database up to date.

Carfax administration moved to Fairfax, Va., in 1993, after Blackburn Marketing, a Toronto-based company looking to expand in the United States, bought more than 50 percent ownership in the company. Barnett and other founders kept some stock until 1999, when Carfax became a wholly owned subsidiary of Michigan-based R.L. Polk Co.

Carfax's data centers never left Columbia.

An estimated 43.6 million Americans bought used cars last year, according to the Manheim's Used Car Market Report. Used car sales made up about 85 percent of all car transactions.

The average lifespan of cars has grown over the past few decades, which means they can be resold more often than in the past. This has fueled the business of Carfax, as more consumers need car reports.

On the other hand, falling prices of used cars have squeezed dealerships, making them re-evaluate every expense, including the use of Carfax's reports.

Carfax data comes from more than 6,100 sources, including motor vehicle bureaus, fire departments, auto auctions, car dealers and maintenance shops. The company has records from all 50 states, Canada and Mexico.

The company pays for lunch every Friday. There is a think-tank room for brainstorming, a shower, a basketball court, and a flying disc and golf area. A walking track surrounds the property. Carfax does employee satisfaction surveys every year and distributes 15 percent of its profit as bonuses to employees across the board. Employees get glucose and cholesterol screenings at the office, and, when available, free flu shots.

“I'd like to think that a lot of what you see today is from the legacy that I established,” Barnett said. “I always wanted to treat people like I was grateful that they came to work.”

Mark Schlemper of Columbia, who has been with Carfax for more than seven years, said that the job is not always perfect and that some days can get very stressful.

“But I can honestly say this is the best place I've ever worked,” Schlemper said. “They listen to us.”

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