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 Stan Sher on November 28, 2011 at 9:54pm

All they did was promise the customer information that is not possible and using it against the dealership.  Theya re killing profits for the dealerships and creating angry customers.  The transparency died when they destroyed opportunities for dealerships.  I personally would love to see this company get destroyed. 

Comment by Michael Paulson on November 28, 2011 at 7:52pm

This sounds like a good topic for April's Digital Dealer conference in Orlando!  Imagine an hour filled with real world dealer invoice vs TrueCar pricing and a discussion like this one of the validity of this format.  At very least it may pressure TrueCar to post valid dealer costs.  As Joe stated earlier, it's not a problem having the pricing displayed as long as it's the right pricing.  I would imagine that the owners of these dealerships that are offering below cost deals would stop the practice if they knew about it.  Not many owners/GMs look at gross by internet ad source.  I have to believe that those who are participating in this discussion are way ahead of the game.

Comment by Russell Blackstone on November 28, 2011 at 7:35pm

Thanks for this great post Jim.You've now got some attention for what is really happening with this vendor. It's nice to know that others are on the same page when it comes to Z-G and T--- Car but why are so many dealers willing to pay for their doom? If we can get enough dealers to cut them off, we'll all be better off. It's a shame that so many mainstream companies are drinking this poison.

Comment by James A. Ziegler on November 28, 2011 at 6:10pm

Of course all of my previous rant is just my personal opinion based on common human decency

... I MIGHT BE WRONG. 

Comment by James A. Ziegler on November 28, 2011 at 6:08pm

Wendell, I know many dealerships, import and domestic,  TODAY at or above $3000 a unit, front and back.  average per unit, I believe every dealership should be at $2500 -- which is fair and reasonable. These alleged  'Strokes'  think they have the right to march into our business and dictate losing money and paying them for the privilege of being screwed. Excuse me, we are not communists and making a reasonable profit is acceptable.  

Furniture and jewelry is routinely marked up 300% but these  alleged jerkoffs feel any profit is a ripoff. 

I say, we better get serious and throw them out of our business, AND get them out of our computers and databases. They've already stated their goal is to "Commoditize"  our business without "Service" to the customer. Their goal in their arrogant "White Papers"  is to to put us out of business. 

 

These granola-eating quasi-intellectual alleged, seemingly, to me anyway, perceived to be morons, is to destroy the retail automobile business. Anyone who does business with them is a traitor to our business. 

Their founder believes himself to be a 'visionary' however I view him as a dwarf with a phantom false Steve Jobs complex. This guy hasn't seen the ball since the kickoff.

 

I am saying everyone of you needs to become a movement.  Tell your dealers, blog, email, and resist at every turn every effort these people make to access your data.. or anyone for that matter. READ your contracts... we are through with sharing data with anyone, NOT your partners or affiliates or anyone else you want to mine our customer data and screw us over with, whoever you might be or not be. Get the hell out of our data.

If TrueCar and Zag and Edmunds and any of the other usual suspects are 'Straight Up' as they claim to be... then back up and deal straight with us. 

We have the power to put them down as an industry. If they come at us, we can make this a  movement. JIM

 

Comment by Wendell Hardy on November 28, 2011 at 4:50pm

Just a question: What is an acceptable PVR on New and Used? Just trying to wrap my mind around what is expected. Do most dealerships want volume, or gross? Do you have to give up gross, for volume? Just questions..

Comment by Joe Clementi on November 28, 2011 at 4:37pm

It has to be said that the issue is not the UPFRONT pricing strategy!  Information is a powerful tool that when used to educate can work in favor of a profitable deal. Give the information out, we can deal with that.  Just don't price our products below cost for everyone to see!    For decades we've been dealing with the cost structures being posted online. I'm not against customers being informed, not in the least bit. We can sell value !!!. 

Our request is simple, take down the sites that promote losses and devalue our brands.  We want those dealers that participate by posting prices below invoice online to stop!  Nothing more. 

What's the value of posting invoice online when one can buy a car significantly below "invoice"? What is a consumer suppose to believe?  If I can buy below costs than it's not your costs, right? I've

Comment by Keith Shetterly on November 28, 2011 at 4:18pm

@ Joe, thanks!  

Reminder:  Everybody who can continue to post loser/winner on their TC/Zag deals please do so as Jim Z asked.

Comment by Keith Shetterly on November 28, 2011 at 4:14pm

I guess AutoNation agrees with these whitepapers?  Huh.

AutoNation COO Mike Maroone Joins TrueCar Board of Directors

http://blog.truecar.com/2011/08/04/autonation-coo-mike-maroone-join...

Comment by Michael Deville on November 28, 2011 at 4:12pm

Autotrader gives upfront pricing and they still want more, and more, so upfront pricing is fine, but holding the upfront pricing takes talent, get all the college students you want and talent will be the end result in the bottomline.

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