TRUE CAR and ZAG Cyber Bandits, Parasites or Good for the Car Business?

Jim Ziegler asks...

I am hearing a lot of discussion about True Car and ZAG.  I continually scratch my head and wonder if  desperate dealers are doing the marketing limbo "How Low Can You Go?" 

Are we so bad at what we do that we have to line up and pay vendors to lose money? AND, who is giving these people access to your data that is used against you? 

 

Who owns these companies and what might be their ulterior motive?  Sometimes I ask questions to which I already know the answer. 

 

Am I wrong?


What do you think... JIM

 

 

Jim Ziegler's Guidance and Recommended Action Plan:

Ten Areas We Need to Concentrate on to Bring This Monster to It's Knees...

  1. Government investigation of ALL Data Aggregators taking consumer information from dealers' DMS. Sadly enough, dealers who do business with TrueCar are exposed to  liability charges. Cut off all access to unecessary data, no matter who takes it from the dealers DMS and make it illegal to "resell identifiable consumer data" and "transactional data".
  2. Educate Your Fellow Dealers; If anyone takes financial transactional data, they expose the dealer that allowed it to violations, especially if it is passed on to other vendors or shared.
  3. Educate Consumers to what they're doing with their information...
    a. You buy a car from a dealer, do you really want your personal information, and maybe even your financial information, passed along and sold and shared by "God knows who?"
    b. These People Charge the Dealer $300 which the dealers have to build into the deal
    c. Your Privacy and the Security of your Information could theoretically compromise your identity if you do business a company that takes data from the dealership.
  4. Educate Investors and potential investors they could possibly be mislead if anyone is telling them this is a safe investment because of all of the dealers pushing back, associations pushing back, and government regulators in many states coming after TrueCar's business model as NOT compliant, in some cases they're saying it is Not Legal.
  5. AMEX, USAA and all of their affiliates do not want the bad consumer relations this push back is creating with their members and customers.
  6. Cancel your dealership's Affilation with TrueCar. Tell people with TrueCar certificates that YOU don't honor TrueCar and you feel the company is NOT reputable. Educate consumers as to perceived data exposure if they buy from a TrueCar dealer. Make sure that each consumer knows that using TrueCar actually increases their vehicle cost by $300 to $400.
  7. Make the dealers selling at huge losses take all of those deals. Big problem right now is too many Nissan Dealers and others are taking huge losers to get the factory money. The TrueCar reverse-auction business model will continually push those numbers down until the factory money is non-existent. Consumers need to hear from many dealers, "We don't do TrueCar"
  8. Keep calling your National and State Dealer Associations demanding they get involved and stay involved... No excuses.
  9. Get the Manufacturers into the game. If GM, Ford, Toyota, and other majors change the rules about how we advertise and do business to protect the dealers, we can cut off their ability to set pricing. So keep it up at every dealer meeting. Call your Dealer Council Members and protest to your factory reps. Tell the manufacturers, if they want showroom and facility improvements, we need the ability to make fair profits.
  10. Tell everyone you know. Educate other dealers and industry people. Watch the Painter interviews... I believe this is the first time a vendor has publicly announced they intend to bring down the dealers and hijack our business, taking our profits and starving us out with our own data. Painter has said manufacturers and dealers should go bankrupt and he, in his God-like way "will control distribution..."
    When the TrueCar-Yahoo Deal kicks in we need to stand firm and "Just Say No" we don't honor TrueCar deals.

Read this article as a reference: http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN... 

AND, if you doubt the mission... read this...  http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf

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Comment by Keith Shetterly on November 30, 2011 at 10:58am

So, here's the question:  Can Social Media (ours at DE, ADM, etc.) really stop $200million of capital that TrueCar recently got to go pursue the market?  We'll see!!!

Comment by Keith Shetterly on November 30, 2011 at 10:55am

@ James, I used to live near there.  Gainesville, etc. close by, University of Florida (yeah, I'm a Gator!), etc..  It's a bigger market than I think it looks.

Comment by Jim Kristoff on November 30, 2011 at 10:54am

The time has come for dealers to lobby their State Associations and NADA to stop this madness....

 

Comment by Keith Shetterly 10 minutes ago

Oh, and here's a doozie:  TrueCar is replacing Cars.com on Yahoo.com as of Jan 1:  http://www.autonews.com/apps/pbcs.dll/article?AID=/20111031/RETAIL0...

 

Comment by James Carroll on November 30, 2011 at 10:54am
@Jose. Wow that would seem like huge numbers for TrueCar alone. Was not aware that Ocala was that big a market. How many total cars a month if you don't mind my asking?
Comment by Michael Paulson on November 30, 2011 at 10:44am

@Jose...You wrote: 

"We sell about 200 True Car customers per month and make a very decent profit front and back."

Can you share with us what your average gross is front and back for these 200 sales?  I'm curious what "very decent" is.  Thanks!

Comment by Keith Shetterly on November 30, 2011 at 10:43am

Oh, and here's a doozie:  TrueCar is replacing Cars.com on Yahoo.com as of Jan 1:  http://www.autonews.com/apps/pbcs.dll/article?AID=/20111031/RETAIL0...

Comment by Keith Shetterly on November 30, 2011 at 10:41am

@ Jose:  With those sales, do you feel comfortable with the stated direction of TrueCar for your dealership's future?  Ala "As a result, he believes dealerships will move toward fleet-type sales where buyers just sign paperwork, pick up their keys and go. No high-pressure, highly compensated salesperson required, he says.  "The car sells itself at that point. It's effectively a commodity," he says." http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN... and "Upfront pricing is non-negotiable in an environment defined by net margin compression, anonymous access to robust product information for consumers via the Internet, and the commoditization of the car. To facilitate a purchasing decision, the online commodity shopper wants an informational advantage, and that is truly achieved only when the buyer can get access to an upfront price—anonymously—and has the tools to compare that price with the market average, to know it’s fair" http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf

Comment by Larry Muirhead on November 30, 2011 at 10:33am

WOW!  That's impressive.. I can only imagine how many your store must sell other than TC?
That number at our store would equate to significant financial losses.  Just the fees back to TC would be around $60,000.

Comment by Keith Shetterly on November 30, 2011 at 10:25am

Eric . . . you wouldn't by any chance be an Edmunds-participating dealer, would you?  If so, can you check that one?

Comment by James A. Ziegler on November 30, 2011 at 10:14am

Jimmy, glad to see you checked in here...please get your dealership clients to sign in on this blog. I know you also have a huge list. I just sent out 30,000 targeted emails to subscribers.

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