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 Stanley Esposito on November 29, 2011 at 7:00pm

I have been here reading the comments all day! My dealer does not participate in the truecar program. I have been thinking about this all day. Since the internet came on the scene there are no record stores left and travel agents have been replaced by different websites. Is the car salesman next? If truecar had it's way the answer would be yes.

Well I guess if you can sell cars you can sell anything...

Comment by James A. Ziegler on November 29, 2011 at 6:54pm

Be sure to email all of your CAR BUSINESS FRIENDS and associates the link to this blog ans send them a link to Jerry's Video too.  I am picturing all of the TrueCar and ZAG guys (gals) hunkering down in a bunker somewhere in the desert about now. Envision they have enough supplies and water to lay low for three weeks.

Comment by Mark Elliott on November 29, 2011 at 6:40pm

Well said Steve. Our Subaru franchise,has been dealing with the same issues. They're the only ZAG dealer with in 60 miles,and 2 other Subaru stores with in 30 miles,which are not on the "PROGRAM" So the customers come in with the ZAG pricing,and always want to grind for a better deal,which is normal...who doesn't? But if they don't close up,they go to one of the other 2 local dealers,and ask "Can you beat this price?" Meaning the GAG price.Of course the answer is yes!!! So they get the deal,and a little more market share,and don't pay the $299.00 juice fee.And to top it off,the ZAG rep,doesn't return phone calls!!

Comment by Keith Shetterly on November 29, 2011 at 6:35pm

@ Ted, one of the things that's NOT allowed is to sell leads in Texas on a 'per lead' basis--essentially, the law in Texas says you can only estimate and therefore you buy "packages" of leads (from Vehix or whomever).  TrueCar may have run into that, but they'll have a workaround.  I don't think it's any "bird dog" law, but I'm no legal expert; just never heard of it.

Comment by Steve Richards on November 29, 2011 at 6:32pm

It's a whole lot easier to pay a vendor to send a customer; even if the customer isn't willing to pay you a profit. In fact, with ever increasing frequency, the ZAG customer wants to grind the dealer for an even better deal once they arrive. Easier that what you may ask? Easier than hiring, training, building, developing, and maintaining a first class sales team. Easier than modernizing the sales process (technology does not equal modernizing). Dealers who want to be #1 in volume are ZAG's primary and willing "victims". Who pays the highest price? The sales people. But they're disposable, right?

Comment by Keith Shetterly on November 29, 2011 at 6:31pm

@ Ted, here is a screen snap, purged to protect the Toyota dealer (email me if you need to know who) in Houston.

Comment by Ted Gessler on November 29, 2011 at 6:22pm

Keith, I read on another website a dealer saying he was glad he was in Texas because that type of advertising is not allowed.  I tried it with a Texas zip and sure enough none of the data was displaying.  Not sure what they did but I hope my state follows their lead.

Comment by Mark Elliott on November 29, 2011 at 6:12pm

I just noticed that a couple of my friends,that are not yet members of DE,and we came up in the business together,and posting the anti True Car video on Facebook. You never realize how big something is,till it goes viral I guess.

 

I just spoke with my new Subaru manager,and he has been following this on here, He has left no less than 9 voicemails,with his ZAG rep,to cancel....He can't find the guy with a warrent...WEIRD!!! I think they be starting to feel the pressure!

Comment by Keith Shetterly on November 29, 2011 at 5:39pm

And Ted, FYI Edmunds is now using the same "I get all your data" strategy . . . to support TMV.  I believe, though I can't prove, that is why they are now selling direct to dealers.  The "TrueCar" lightbulb went off at Edmunds re: TMV.

Comment by Keith Shetterly on November 29, 2011 at 5:37pm

Ted, what did the Texas association do?  Remember, TC is *not* yet in all markets; I thought they weren't fully in Texas yet is why the #'s aren't so bad.  Thanks!

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