TrueCar Thoughts from Elise Kephart

Another night of being up late...thinking about work, personal life, work...and of course this whole TrueCar debate.  I'm not sure if this it's a good or bad thing that for the past two hours I have been catching up on all of the blogs, videos, phone conversations recorded etc.

Now, before I state my thoughts on this.  I realize that there are a few close friends and mentors in the automotive online network here that may have a different opinion.  I am the type of person however, that is open minded and have read for hours upon hours and done alot of research on everyones opinions on this the past few weeks. It seems the majority, including as mentioned close affiliates of mine, that are ready to KILL THE BEAST.  It does amaze me how it started off as Jim's facebook status and now it is becoming a revolution it seems. 

Here is my own PERSONAL EXPERIENCE on it.  I realize several of you are GM's, owners of dealerships, trainers etc.  I work on the line so to speak.  I get to deal with internet customers all day, everyday. 

When I first moved into the internet department, it took a little bit of learning to get away from learning a specific system.  The cliche is that internet customers are all about price. 

When I first got into this business and was on the line at a Ford Dealership in San Diego, I had no sales experience.  I was a coffee barista before that but was motivated enough to learn the business and find what works, and what doesnt work.  My first day I walked other dealerships lots as a customer and discovered quickly the stereotyped "car sales person." 

When I first moved into the internet department...I was trained to make a phone call, write an email and set an appointment.  This would be great if it actually worked the first time around...so what did I do? I wanted to learn.  I made fake emails, and I "walked to dealerships lots" but online.  I mystery shopped.  Doing this I discovered what I did not like.

In doing this, I quickly discovered that most ISM's are sending out auto responders.  When you spend a day mystery shopping, you discover that there is so much automation in our business that eventually it all looks THE SAME.  I also found dealerships sending out quotes first time around on a car that again, would be automated.  I shopped for a "Honda Civic" DX (this is the entry level with no air or radio!).  Dealerships were sending me your typical automated response asking for an appointment or "when I could come in to get a really good deal", or sending me a price quote without even asking or verifying "are you looking for a DX Civic or do you like to have air conditiioning and a radio?"

Then my theory went back to my roots BE DIFFERENT! DO SOMETHING that you will be REMEMBERED FOR. STAND OUT.  When I was on the front line (reflecting back to San Diego, prior to being in internet) I got all that time waiting out on the pad with the sun beaming on my face, with my uncomfortable heels, waiting for that one up.  (we were on a rotation).  During this time when you are waiting and waiting for the up-you go through an un explainable mental self motivating game.  If you are in this business you motivate yourself enough so that when you do get that up you are ON YOUR GAME. 

With the internet it is no different.  I started a process:  EXCEEDING (and truly exceeding) what I knew customers were not getting anywhere else.  I make a phone call, send them a personal video message, write them a handwritten postcard and in doing this the customers DID CALL back, or they DID WRITE back.  Why?  I can't tell you how many times "Elise we really loved your video and postcard." 

Now..back to the topic of truecar.  This is where as a person who does like to do the creative side of things in this business like the videos and postcards...the truecar prices started to come up.  There were those customers who when were not a truecar dealership-customers had a USAA price that they wanted us to match so I would offer a time for them to visit with me where they could bring in their certificate.  Once the customer got there I was able to see all the dealerships who had these close to invoice or even back of invoice prices.

These customers even though we were not a truecar certified dealer at the time, would still try and give us "the shot" to match the "best price."

But at this point, the customer usually has a rapport with me via the videos and postcards Ive sent.  I would sit down with their bell shart and three prices, and BEST price and do the SALES PROCESS with them.

We have all heard of an evidence manual.  I have one with a biography on me, awards on the product (Honda), handwritten customer testimonials, photos of my customers and toward the back of this evidence manual I have evidence. 

BUMP STICKERS.  YES, a truecar dealer could have a price $700 back of invoice but this is an actual markup sticker I xeroxed when we have traded with that dealer.  This dealer accessorizes their vehicles with over $1,995 of accessories.  Right by that mark up sticker I have copied yelp, dealerrater, google reviews with ACTUAL customers stating that the accessories were "non negotiable."

I have several bump stickers copied, several yelp reviews and true actual facts.  Now, I did speak with a truecar rep who stated that dealerships on the program are not supposed to have accessories forced upon the customer...but I know that it happens. 

What else do I have in my evidence manual?  Actual emails from dealerships when I mystery shop telling lies-wether it be what is available, or not giving an out the door price, or lying about having the vehicle in stock etc. 

As a sales person-BRING VALUE to the table.  Show them why if they really drive 169 miles out the price on the best truecar price is a loser deal and SHOW them the games and tricks that several dealerships will play.

It got to the point where we did sign up about two months ago with Truecar.  It has been profitable with us. 

To state some facts with my own personal experience on it:  we are usually the third or second most expensive price on true car.  We are never the BEST PRICE.

What is funny about this is WHY, if it is ALL about price have I been getting customers that will drive 300 miles and pass the other two better priced TRUE CAR dealers to come and buy from me?  My PRICE is higher.  I sometimes even have to get the vehicle on a trade-so its not about inventory or having it in stock.

My real theory-is that I put value to the table.  Now, yes-often times, it takes the extra mile.  All the sales people at my store says sometimes I go to great lengths to just make a mini or close to a mini.  For me-I get a kick out of it.  MY TIME IS VALUABLE.  If I make a video message, write an email, even make a call-that a moment of MY time that is being taken.  If I give up because its "another truecar" customer...then Ive wasted even second with this customer. 


As far as truecar pulling DMS files:  I have heard Scott Painter state several statements, more recently in a phone conversation that I was listening to where he says he does not use the DMS to create that pricing. 

He also says that he is not a broker, because dealers create their own pricing.

"Elise how can you sleep with the devil? "-I could be wrong, as I am not perfect-but I have been a dealership not on it, and as Grant said its there already and change is happening.  Wether I use it or not, its still there.  Now I realize that Honda is telling dealerships to not advertise below invoice on truecar-and I completely agree with that.  Selling a Honda below invoice or advertising for below invoice is ridiculous. 

I think the truecar/clearbook needs some tweeks to be done still...but it has been profitable for us, and has been a great lead source-even though as mentioned my truecar price is NEVER the lowest, or race to the bottom and as mentioned in the past two months since we have been on it-i have gotten customers drive past the other two truecar dealerships to pay MORE for the SAME car but buy it from me.

CREATE AN EXPERIENCE that has no pricetag. I don't see truecar going away, and if it does-there will always be another company right behind it.

Its late....and I know this has been such a big debate online and wanted to put in my 2 cents. 

-Elise

Feel free to leave comments. 

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Comment by Michael Timmons on December 22, 2011 at 4:23pm

Elise, I love your passion!! No matter what side of the fence you are on over the TRUECar debate, (I am biased) our industry is changing and the winners will be the individuals and companies that understand the new consumer demands and are able to effectively service them. Keep up the good work!!

Comment by Elise Kephart on December 22, 2011 at 3:43pm

The more and more I follow the on going TrueCar debate, the more I realize, that yes...I have been doing my part in keeping a positive attitude toward overcoming ANY "TRUECAR" Price.

I understand the legalities of it, and am following alot of the posts from everyone including Colorado's stance and from what I hear now California.

I feel like we are living in a time that is ever changing.  If we take down TrueCar, someone out there will find a way to beat the system, make "transparent" pricing legal...and we will have to find something in the middle to MAKE IT WORK.

At the end of the day however, I still firmly believe: PRICE is NOT everything.  If it was, I wouldn't have customers buying from me, PAYING MORE and driving FARTHER. 

In my head, Im the type of person that is motivated enough to be "the one".  "The one" that everyone wants to buy a car from AND for the dealership to make a profit...even if it's just holdback and a few hundred bucks. 

Comment by Mike theCarGuy Correra on December 22, 2011 at 12:55pm

Great post Elise, aside from the TrueCar issues I really loved your insights on coming into the biz fresh! Well written and very nicely summed up, I have shared it with my team as a recomended great read! Keep up your great work, LOVE your attitude! :)

Comment by Joe Clementi on December 20, 2011 at 7:23pm

@Jay

Read this great memo yesterday.  Just learned today that CA is following suite and most likely will be making efforts to stop the illegal advertisements that TC is currently using. 

 

Comment by Jay Prassel on December 20, 2011 at 1:53pm

continued.....

pursue licensure by TrueCar as either a Used Motor Vehicle Dealer or to have individuals associated with TrueCar licensed as salespersons or both.


 

The Division also noted that licensed motor vehicle dealers who knowingly allow an unlicensed person to exercise any of the privileges granted to a licensed dealer are in violation of the Act and can be held accountable for the acts of such unlicensed
persons. [C.R.S. §12-6-109]
Should the Division receive any consumer complaint regarding the activities of TrueCar, the Board will look to the licensed, selling dealer and will hold the dealer accountable for any violations.
The Board and the Division requested the Colorado Automobile Dealers Association (CADA) to inform its members immediately of these compliance issues. Meanwhile, TrueCar has been directed by the Division to correct the advertising violations that are controlled via content on their site immediately and meet with the Division concerning licensure.

 

Source: http://www.colorado.gov/

Comment by Jay Prassel on December 20, 2011 at 1:51pm

The Colorado Department of Revenue Auto Industry Division (Division) has reviewed the text below, which was submitted by the Colorado Automobile Dealers Association after the Division’s presentation to the Motor Vehicle Dealer Board (“Board”) at its meeting on December 8, 2011. The Division believes the text fairly and accurately describes the issues surrounding the relationship between Colorado motor vehicle dealers and TrueCar. The Division will take all steps necessary to fulfill its statutory duty to assist the Board in protecting consumers, investigating suspected or alleged violations of statutes or rules, and enforcing all licensing statutes and rules.

 

 

MEMO:

It has come to the attention of the Colorado Motor Vehicle Dealer Board (“Board”) and the Auto Industry Division (“Division”) that a number of new motor vehicle dealers licensed in Colorado have relationships with a company known as TrueCar. The Division has identified a number of advertising violations in TrueCar materials and on its web site, as well as other potential violations of the Motor Vehicle Dealer Act (“Act”) and related regulations.


 

Any Colorado licensed dealer that is using TrueCar to promote and list its vehicles to consumers is ultimately responsible for any such violations. The specific advertising violations identified are:

  • Failure to include stock number of the vehicle for sale (violates Advertising Rule 3)
  • Use of the word “invoice” in the advertising (violates Advertising Rule 11)
  • Font size of disclaimers is too small (violates Advertising Rule 15)
  • Failure to advertise price of vehicle including all costs including Delivery & Handling (violates Advertising Rule 13)
  • TrueCar disclaimers also refer to a “Documentation fee” which is terminology that has led to lawsuits in Colorado in the past
  • No expiration date or time limit for offer which could possibly result in a motor vehicle being listed for sale but no longer in inventory (violates Rule 3)


In addition to the specific advertising rule violations, the Board and the Division have concerns with the ability of TrueCar to access the inventory information of a licensed dealer. There would appear to be the potential for a consumer [who has been quoted a price for a specific vehicle and assured a “guarantee”] arriving at the dealership to find that vehicle has already been sold. The consumer may then be targeted for the sale of a different vehicle. In certain circumstances, this may constitute a “bait and switch” transaction which is prohibited by the Act as well as other Colorado statutes (and could be a criminal offense).
Moreover, concerns extend to the compensation structure that is based on a completed sale, meaning there appears to be unlicensed sales activity taking place—a violation for both the entity engaging in the unlicensed activity as well as a violation for the dealer that is engaging with that unlicensed entity.
As of December 8, 2011, neither TrueCar nor its employees were licensed by the Board. The Board has instructed the Division to

Comment by Randy Fry on December 20, 2011 at 1:47pm

Great News in the State of Wisconsin...

The Wisconsin Department of Transportation, Division of Motor Vehicles has sent a letter, dated December 14, to TrueCar informing them that their business model violates Wisconsin law. The department instructed TrueCar to inform all of the Wisconsin dealers participating in TrueCar?s program that the program is not in compliance with Wisconsin law and either discontinue operations in Wisconsin or change their program. The department identified the method of payment (the $299-$399 per sale) as an illegal commission and a bird dog fee.  

Comment by Stanley Esposito on December 20, 2011 at 12:35pm

@Joe, Thank You!

Comment by Kevin King on December 20, 2011 at 11:51am

Bravo Joe ,  I am with you all the way have have already closed down DMS access!

Comment by Joe Clementi on December 20, 2011 at 11:27am

Elise.  Excellent share and a reminder that a sale is created when the value exceeds the costs.  Your process works in part, becuase you believe in it.  We applaud your efforts and your belief that the customer does still buy the salesperson and the dealership.

Here's the problem:  A customer walks into a showroom with a quote for a brand new car at $800 below invoice.  No car exist at the TC dealer.  So, they go from dealer to dealer looking for someone who will match that deal.  It's a loser in the true sence of the word.  No financing, no trade-in and most likely no interest in our products.  The car is hard to find and every other dealer has said no...except the TC dealer (who does not have the car).  What impression are we giving the customer with the TC quote in his/her hand?  What does that customer think about the rest of us?  Who is being dishonest?  Is it the TC dealer that gave them such a great deal?  Or, is it the other four dealers that said no? Who do they believe?  Truecar hides behind the guise that we as dealers, are afraid of transparency.  That we don't want our customers to know our costs.  This insinuation puts a divider between the guest and our dealerships.  Any dealership that continues to use a service that would LOVE to see us eliminated, is simply uneducated.  Please consider reading more on the business plan and what TC stands for.  Then, consider talking your dealer group into canceling the agreement. 

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