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 Jimmy Vee on November 30, 2011 at 10:05am

Jim, you're on the right track here.

We've bee pounding this drum for a couple of years now and the problem just keeps getting worse. There are other culprits in the industry too that are pushing in this same direction. If an industry vendor makes its money from dealers but are a consumer facing company there is a real conflict of interest and dealers get screwed. Dealers are financing their own demise and they need to wake up and stop the insanity.

 

All dealers should read our cover feature in AutoSuccess Magazine this month. It's online now. We talk about this exact problem and discuss a plan for fighting the forces and taking back what's rightfully ours.

Comment by Keith Shetterly on November 30, 2011 at 10:03am

@ Jim, Thanks!  I might make a new blog using that sometime later.  :)

Comment by Jim Kristoff on November 30, 2011 at 10:00am

@Keith......LOVE your top ten!!!.......

Comment by Keith Shetterly on November 30, 2011 at 9:50am

Top Ten Reasons TrueCar is GOOD for Dealers


10.  It will, eventually, greatly reduce payroll.

9. That damnably expensive, OEM-required facility upgrade will no longer be a worry.

8. Your Internet Manager can finally get some sleep.

7. You'll have time at last to watch Oprah's cable channel.

6. Phone training expense and time will be eliminated.

5. Your work with search engines will simplify down to selling your stock in them in order to eat.

4. Your current lot will look GREAT as a weekend flea market.

3. Customer retention will be the job of the local JiffyLube.

2. You will finally have time to join "Occupy Unemployment Line".

...and the # 1 reason:

1. Because everybody at TrueCar thinks they are smarter than YOU.

Comment by James A. Ziegler on November 30, 2011 at 9:25am

Great commentary everyone BUT most people are missing the Point that makes this a threat to our very business. TrueCar and ZAG and now maybe Edmunds are gathering transactional data from the dealers. Allegedly, they say, telling consumers what cars are actually being sold for in the market. Although a number of dealerships are alluding to the possibility they may be even fabricating lower prices than reality, although I don't know that to be true...it has been said by several. 

 

If real transactional prices are below true cost because some weak suck caved and blew out a unit at a huge loss, then that becomes the new benchmark. So, TrueCar is in effect, driving down prices and prices into TrueLoss.  AND, I believe this is by design a deliberate attempt to destroy the business and ultimately to take it over with a new model where the big conglomerates rule everything. Note that Mike Maroone, president of AutoNation , is on the board at TrueCar. Just my suspicion driving this opinion, but, other than me, does anyone else smell a rat here?

 

Comment by Stanley Esposito on November 30, 2011 at 9:12am

but those that do sell more cars and wind up keeping their operating costs down while retaining customers. Our customers are happy because there was no friction and the deals are often a significant savings of several thousand dollars. If anyone would like more info about TrueCar,

Last time I looked Truecar does not sell cars and the customer does not pay them. How do they call them "our customers."

The customer may save "thousands" of the msrp with rebates included but telling customers they can pay thousands less then other dealers is false.

They also say the dealers retain customers?  The more truecar talks the less credibility they have...

Comment by Keith Shetterly on November 30, 2011 at 9:00am

@ Michael:  YEP.  Dealers have paid for this to happen while the shopper pays nothing.  Sheesh!

Comment by Keith Shetterly on November 30, 2011 at 8:58am

Hey, after this thread and the beginning of the mushrooming backlash, do you think TrueCar/Zag could get a dealer testimonial produced like this on the consumer side?  ONE of those happy dealers that supposedly exist should be ready to do this now?  And I don't mean some marketing spew produced before . . . let's get some endorsement videos from dealers who UNDERSTAND what they are doing now that it's clear.  I mean, what dealer would NOT want to discount $4200 as in this video:

http://youtu.be/Z-yIcqGqu_s 

Comment by Michael Paulson on November 30, 2011 at 8:57am

@Jerry  You wrote:  "

Comment by Jerry Thibeau 26 minutes ago           

Ture Car posted this on my YouTube page:

"Hi Jerry. The TrueCar concept is about fairness for both sides, reducing friction and moving more vehicles. Not every dealer believes in our vision, but those that do sell more cars and wind up keeping their operating costs down while retaining customers. Our customers are happy because there was no friction and the deals are often a significant savings of several thousand dollars. If anyone would like more info about TrueCar, feel free to reach out: info@truecar.com."

Bold is my addition.  It is interesting to me that TrueCar talks about its customers saving several thousand dollars.  Last time I checked, the dealers were TrueCar's customers.  Until they start collecting money from the consumers, they need to remember which side their bread is buttered on.  Just saying....
Comment by Jim Kristoff on November 30, 2011 at 8:44am

Here is a quote from an Internet Manager that I have worked with that he posted on FaceBook....

 

Chris Atwood .......What one of the commenters put up there is so true. I had a customer going back and forth with me about the TrueCar price and he was threatening to go buy the vehicle through one of the "preferred" dealers on there. I told him to go try...they didn't even have the vehicle. Now the customer has soured on the whole experience because of TrueCar and the people who buy into them.

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