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 referencehttp://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 Ted Gessler on November 29, 2011 at 5:30pm

Jim when you get this fixed can we have CarGurus.com Wednesday.  I am not a fan or marking any vehicle as a Bad deal but I can get over that we should be competitive in pricing.  What I have issue with is I believe they are making up dealer.reviews to make their product more robust.  In my part of the country reviews are hard to come by and we almost have more on a website that nobody know about....very strange.  All one name and one line reviews.  When this website gets to be more mainstream these reviews will hurt us all.

Comment by James A. Ziegler on November 29, 2011 at 5:20pm

Thank you for that great posting Ted. As a matter of fact I am speaking with a number of State dealer Association directors (I know every one of them) and what you're suggesting might be a legislative lobbying project for many. JIM

 

Comment by Ted Gessler on November 29, 2011 at 5:17pm

I have been following this all day and wholeheartedly agree this is bad for our industry.  What I have not seen is a true assessment of the tool and then an assessment of the user.

 The tool in and of itself is very robust and well designed to deliver information similar to TMV on Edmunds.  The integration of a dealer editable price is very good as well similar to premium listing on AT.  

The user on the other hand is the culprit.  Using that dealer editable price to set the market below the real market on the car is wrong.  The early adopters are the old school bait and switch dealers.  

This does nothing but set our industry back 15 years because the users ruining the system are what is making the system bad.

Look up a car on their website and use a Texas zip code and it is not as effective.  We should all contact our state associations like Texas did to get this type of advertising off of the internet. 

Comment by David Ruggles on November 29, 2011 at 4:35pm

Frankly, I find the assertion from TrueCar that they provide "incremental business" insulting.  They are only decreasing the potential for gross profit on business that was already going to be done by someone, and making their own money in the doing. 

 

Further, they raised $200 million from investors on a business premise that doesn't seem to have "legs" based on the backlash we are seeing here.  I wonder if dealers can remember when dealers discovered that ADP was selling information poached from their DMS a few years back?  When dealers woke up, that was shut down quickly.  The TrueCar model can be made to go away just as quickly.  Thanks to Jeff Kershner, who brought this up a few weeks ago and to Jim Ziegler for carrying the ball on this.

 

FYI, NADA is on the case, although I haven't heard much from them recently on the subject.

Comment by James A. Ziegler on November 29, 2011 at 4:33pm

Just a small thing BUT please everyone hit the little button with the thumb up that says 'Promote'

Comment by David Ruggles on November 29, 2011 at 4:28pm

One wonders if TrueCar/Zag is in league with the OEMs.  In Las Vegas, GM established a test track where prospects could drive various vehicles and gather information.  The upshot is that once the consumer decided what they wanted to buy, they could go online and order it directly from the factory.  Mind you, this was only a "test."

 

So after ridding the world of dealers and sales people, what would make the OEMs think TrueCar/Zag wouldn't turn their focus on them?

Comment by James A. Ziegler on November 29, 2011 at 3:53pm

Good point guys, send it to peeps in the business

 

Comment by Mike Betts on November 29, 2011 at 3:33pm

Keith, then i will read it a second time. Thanks for your point of view!

Comment by Keith Shetterly on November 29, 2011 at 3:32pm

Mike, it's so much NOT like Edmunds, only on the surface does it seem that way.  Regardless, great selling to you!

Comment by Jerry Thibeau on November 29, 2011 at 3:31pm

Yes, please refrain from posting the video on facebook, unless the target audience is only automotive professionals.  If I start seeing consumer comments on the video, I will take it down and redo. 

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