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 Jim Kristoff on November 30, 2011 at 5:27pm

@Brain......great find on the article!!!

 

I like this part in particular.....

 

The manufacturers can shutdown TrueCar & its network within two weeks: How? Intellectual Property Violations.

It can be argued that TrueCar.com is infringing on the intellectual property rights of all the manufacturers represented on their site.  In theory, in just a matter of two weeks, the manufacturers can shutdown TrueCar’s websites and affiliate programs by sending cease & desist notices (more commonly known as DMCA Takedown Notices) to the ISPs and Web hosting companies that provide services to TrueCar.com and their affiliates. The Digital Millennium Copyright Act requires ISPs/Web hosts to remove potentially infringing content, upon notification of the infringing content by the trademark/copyright holder, within a short timeframe of only a few days. Further, sending a DMCA notice does not require a Judge’s order, it can be sent by anyone who has a valid claim to a copyright/trademark and simply believes their intellectual property rights are being violated. While TrueCar would likely dispute the below complaints, most third party affiliates will almost certainly and abruptly remove the infringing content, rather than risk a disparaging lawsuit.

Here are some of the legal areas that that I feel the manufacturers should be looking at:

  • Unlawful and infringing use of trademarks for a commercial purpose (outside of fair use)
    • “Fair use” of trademarks allows any seller (even unauthorized sellers) to advertise products containing the product’s trademark.  So, for example, I can sell a Honda Accord on eBay that I own, and advertise as such, as the trademarks “Honda” and “Accord” are necessary to display in order to accurately describe the car I’m selling. However, fair use, in theory does not allow “lead companies” to use manufacturer trademarks for their own financial purposes– specifically selling leads. TrueCar is using the manufacturer trademarks to gain search traffic to their site, and in turn, sell leads to dealers. They are not selling automobiles directly to consumers and therefore are not protected by the fair use exemption. TrueCar is promoting their own product (the actual lead they sell to the dealer) at the expense of the brand equity and likeliness of the manufacturer’s trademarks. And unlike eBay, the dealer isn’t populating TrueCar’s site with the trademarks in order to sell the product, instead TrueCar is populating their site in order to generate sellable leads.
    • The actual posting of manufacturer content on the TrueCar site (including but not limited to logo and trademarks) for a commercial purpose (outside the sale of tangible product offered specifically by TrueCar) appears to constitute copyright/trademark infringement.
    •  TrueCar’s use of specific manufacturer trademarks in meta-tags, is a practice that the courts have ruled in other cases as illegal, as it hijacks a trademark in order to gain search traffic (this is in contrast to Google AdWords, in which the practice is permitted so long as the trademark is not displayed in the Adwords Ad).
  • Brand Dilution

 

Comment by Keith Shetterly on November 30, 2011 at 5:13pm

@ Brian:  That was an excellent read.  So, we are on the TrueCar "Road to the IPO".  It's not $200million invested, ladies and gentlemen, it's a return on 5x or more on that which has put this thread and Jerry's video high on Somebody's List.  I expect each employee there has guaranteed stock options for the IPO, which would make them all millionaires when it comes off (Hello, CK).  At this point, I'd be surprised that they weren't using EVERY tactic to shut down negativity.  Explains their motivation to quiet even this small piece of the dealer universe down...

Comment by Brian Willian on November 30, 2011 at 5:03pm

Here is an excellent analysis of the TC/ZAG situation I found.

http://jeremyalicandri.com/tag/truecar-com-review/

 

I don't know the author, but he sure seems to have done his homework.

Comment by Jason Sellers on November 30, 2011 at 4:58pm
Here's what it boils down to:  I'll be damned if my professional sales staff will invest hours of their time and knowledge just to sell a vehicle for a loss.  The only one making money is True Cars plain and simple.  Their bogus claim that they regulate dealer pricing for accuracy is a farce.  It hasn't happened and it will not happen in my market.  I'm still in a heavy employee market, and if GM allows me to make 3-6% on them I'm not going to change when it comes with true cars.   When you start participating with this kind of pricing it only leads you down a long, dark road that comes to a dead end.  I've had 5 true car customers and I've converted 4 of them at a higher sale price because of service, facilities, dealership and salesmanship of my staff.  Bring them on...I'll convert most of them!(plus I didn't have to pay $299 for a sales loser! Thanks true cars! :)
Comment by Jim Kristoff on November 30, 2011 at 4:32pm

some feedback I got from LinkedIn from Paul Sansone Jr..........

 

Subject: RE: Does TrueCar.com want to get rid of Automotive Dealers??

Jim,
I couldn't agree more!!! The business model True Car,Zag and others like them operate under is flawed because the only person that truly wins is them.
Does the customer win?... No because the dealers have to post a price hundreds, if not thousands below what we pay for the car to get the consumer and then we either have to eat that loss or figure out a creative way to get back to profitability. In my opinion not the smooth customer experience they advertise.
Does the dealer win?.... No because, not only do we have to figure out how to ethically build that deal to a point where we can say yes.We get the pleasure of paying them $300/deal to do so. In many cases they make more than I do as a dealer. So who really wins???
That's why I have designed a program that will be nationally launched at NADA. It's called the EZ Referral Network and will give a dealer all of the tools needed to build a vibrant,cost effective referral base. I want to put relationship selling back into the automobile selling process and while price is important it isn't the only thing that makes a good deal.
If anyone wishes to hear more about the EZ Referral Network you can contact me through Linkedin or at my dealership Sansone Jr's 66 Automall Neptune NJ 07753 (732)922-1050.

Paul Sansone Jr  

 

Comment by James Carroll on November 30, 2011 at 4:26pm

By the way Mr Painter - Thought I would save you some time. Here are some of the certification courses you'll want to have you folks bone up on seeing we won't need salesmen... I'm sure some of the other guys would be happy to provide you with info for the other manufactures but you can get started with Toyota.  But should be easy after all it only a commodity... right 

 

Code Description Hrs Date Code Description Hrs Date


RSE31 Introduction to Entune 1.5 08/15/2011 S7177 Selling Safety 4.0 07/25/2011

S5254 Toyoguard 1.0 03/08/2011 S5356 TCMP 1.5 03/08/2011

S5290 Camry vs. The Competition 1.5 09/09/2010 S5350 2011 Camry vs. Sonata 0.75 06/18/2010

S3114 2011 Avalon New Model 4.0 04/20/2010 S3113 2011 Sienna New Model 4.0 02/15/2010

S5308a Toyota Walkaround Module I 1.0 12/16/2009 S5308b Toyota Walkaround Module II 1.0 12/16/2009

S894 Let's Talk Leasing 8.0 11/13/2009 S3112 2010 4Runner New Model 8.0 10/20/2009

S5276 Generation 6 Navigation System & Blue 1.5 08/21/2009 S3109 2010 Prius Launch Training 8.0 06/10/2009

S7173 2010 Tundra vs. Competitors 8.0 05/20/2009 S7200 Chassis Master Workshop 4.0 05/20/2009

S5279 SC Assessment Follow-Up 1.5 04/23/2009 S413 Scion Purchase Process 8.0 02/25/2009

S3108 2009 Venza Launch Training 8.0 11/18/2008 S7158 2009 Corolla vs. Civic 4.0 11/12/2008

S7165 What's New for 2009 8.0 11/12/2008 S382 Why Buy a Toyota 8.0 10/24/2008

S3107 2009 Camry Competitive Challenge Laun 8.0 07/16/2008 S5240 2008 Consumer Reports 4.0 04/25/2008

S5239 2008 Tundra Training 4.0 03/19/2008 S3105 2009 Corolla/Matrix In-District Meeti 8.0 02/06/2008

S3104 2008 Sequoia In-District Product Laun 8.0 01/23/2008 S3101 2008 Highlander In-District Product L 8.0 01/22/2008


Self-Paced Modules / Test Achievements


Code Description Hrs Date Code Description Hrs Date


E094 Audio/Navigation Systems Featuring En 1.0 10/19/2011 E3121 2012 Entune Product Overview 1.0 10/05/2011

SS022 Scion Says Quiz IV - 2011 1.0 10/05/2011 E3118 2012 Camry Product Overview 1.0 10/04/2011

E3120 2012 Yaris Product Overview 1.0 10/04/2011 TP11T 2011 Truck Master Test 1.0 10/02/2011

S11T 2011 Sales Master Test 1.0 09/27/2011 E11Q2 Sales Education Quiz 2 1.0 08/25/2011

SS021 Scion Says Quiz III - 2011 1.0 08/25/2011 E088 Creating Loyalty with Every Delivery 1.0 07/01/2011

E089 Toyota Care/Scion Service Boost - Sal 1.0 05/10/2011 E3115 2011 Scion tC Product Training 1.0 05/09/2011

E3117 Scion What's New 2011 1.0 05/09/2011 E01G Toyota Discovery 1.0 05/04/2011

E01G3 Vehicle Presentation Fundamentals 1.0 05/04/2011 E01G4 Vehicle Delivery Fundamentals 1.0 05/04/2011

E01G5 Creating Sales Opportunities 1.0 05/04/2011 E01G6 Toyota Discovery Sales Consultant Cer 1.0 05/04/2011

E11Q1 Sales Education Quiz 1 1.0 05/04/2011 SS020 Scion Says Quiz II - 2011 1.0 05/04/2011

E01G1 The World of Toyota 1.0 03/26/2011 E01G2 Why Toyota? 1.0 03/26/2011

SS019 Scion Says Quiz I - 2011 1.0 01/26/2011 SS018 Scion Says Quiz IV - 2010 1.0 10/18/2010

SS017 Scion Says Quiz III - 2010 1.0 09/15/2010 E086 XM Satellite Radio 1.0 06/22/2010

Comment by Michael Deville on November 30, 2011 at 4:07pm

Lets see; cut costs, ha ha ha,  lose 1000 to sell it, pay 300 for a free ride, oh cut the salesman out, Ha Ha, you've got to be kidding. Ok, I'm sold, cut out the dealer, salesman, managers increase the unemployment, cut back on factory production, open factory stores, and the consumer still will want more. We can have happy customers even without truecar.

Comment by Keith Shetterly on November 30, 2011 at 3:42pm

@ Arnold:  No worries.  Just call'em like I see'em.  This thread is about TrueCar, not about some boogeyman of consumers insight.  That's, again frankly, just a waste of time on any auto professional social media.

Comment by Arnold Tijerina on November 30, 2011 at 3:37pm

Keith, I'm sorry if I'm not on the "DESTROY TRUECAR" soapbox you're on and actually have opinions about the thread in general. People are interacting with me and I'm interacting back. I have not posted any new comments that were not in response to someone. Just because you apparently don't approve of my interaction with others and I have a different perspective on all of this doesn't make it a thread hijack. 

Comment by Keith Shetterly on November 30, 2011 at 3:27pm

ARNOLD OMG.  What a thread hijack!  I guess we should shut down all the auto social media sites.  And I hope TrueCar is stupid enough to publish this or get some hack to shill for them.  I don't think that'll do well for their dealer sign-ups and their current body.  What their current efforts around, say, Jerry's video are about is that they have a commitment to their funding to achieve a "critical mass" of dealers and of consumers.  This thread stands right in the gun sight of $200million.  The way they are acting, they'll probably try and buy YouTube before it is all over (tongue in cheek)

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