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I have a friend who works for a major automotive lead provider... She sent the following bullet pointed lists to me, and asked that I do not disclose her identity.  She copied these lists out of an email that her company's newest VP (who came from True Car and worked directly for Scott Painter) sent to their internal team.


  • Zag model is still the core which is the affiliate model of becoming the provider for (USAA, AAA, AMEX, Costco, etc…)
  • The only way a dealer can get the leads for these customers is by partnering with TC
  • Sales Team of 8 outside (# as of last summer, most likely a lot more now) go out and build the affiliate network
  • Inside & Outside sales teams call on dealers to recruit for the program – 12 inside sales reps that handle a variety of duties
  • They similar to Direct sign up 3 dealers in a “market”
  • Dealers use an online tool to submit pricing, and won’t be picked as a match to a customer unless they have good pricing that is closing salesIt’s what goes into the algo that tell a consumer where there best dealer match is that drives the sales probability and is the call to action for the consumer
    • Waiting list of dealers in most markets
    • There is a sophisticated algorithm that looks at
      • dealer distance to consumer
      • price of vehicle submitted by dealer
      • what’s available on the dealers lot
      • how many deals the dealer has closed
      • Consumer is always presented 3 dealer options
      • Secret Sauce is how they present the dealer options to the consumer:
        • Based on their matching criteria they have data on close rates that will match a customer to a dealer who may not be priced the best or the closest, but the are the right choice based on what the algo spits out as best close rates by dealer
        • If your not closing sales as a dealer you will show up less often, and you get a visit from the TC rep and they may bring in another dealer
        • Dealers do end up competing to be one of the 3 dealers & then really working hard to try to close as many as possible
        • The more deals you close as a dealer the more business that comes your way
        • Thought it was $280/sale from the dealer invoiced to TC, but then thought it might just be flat $300
        • The key is the dealer has to give them DMS access to their sale data and they have a big team of folks analyzing that data to determine if a car sold:
          • Doesn’t have to be the car on the lead, dealer must pay if that customer (wife, son, daughter, they match the data) buys a car from the store
          • They boast a 99% success rate in determining if a TC customer bought a car there
          • 5K – 8K dealers signed up – waiting list
          • They use the DMS data they are pulling (Don’t have AN DMS Data) to populate local pricing offered
          • TC runs at a net loss, Zag piece (affiliate programs) break even with the 2 combined – trying to get consumer mind share subsidizing TC with Zag profits
          • Getting the DMS data is giving them a bunch more data that their analytics team uses to fuel their dealer option algorithms, and set pricing. ALG acquisition helps on the data side as well.
          • Outside Sales
            • New dealers for their Zag/Affiliate program
            • Dealers competing for that seat
            • Pricing drives down through competition, dealers submit pricing online
            • If a dealer low balls the price, the algo calcs the % of deals closed, how many times the price is presented, and with dealers waiting to earn the spot they manage themselves to stay honest to the model. If a dealer is playing games then they get a visit from a rep and dealers are removed.
            • The hope is customers bring in the quotes branded as TruCar, and with the TV & Radio offline ads they build a name where dealers feel like they have to be a part of the program. Dealers fight to be preferred dealers and they hope the feeling is they cant afford to not play
            • Inside c/s svc QA team does work on post sales with customer to see how their experience was, but there is no pre-sale consumer interaction
              • They QA the dealer, make sure sale went through, and dealers service was good
              • Inside Sales team calls dealers to train, work on pricing, and showing dealers how to submit competitive pricing
              • They have a big team doing data extracts like we do on ESP to make sure they know if a customer bought a car
                • They have an algorithm that automates a piece of this data extract as well – again 99% success rate quoted in matching sale data
                • THE SPECIAL SAUCE
                  • Evidently they have done a ton of work to calculate the probability of sale to figure out which 3 dealers to present to the consumer and how exactly to present those choices to give the best chance of closing the sale – and it works!
                  • The website will say:
                    • Dealer ABC is 50 miles away, match, best price
                    • Dealer XYZ is 10 miles away, ok match, 2nd best price
                    • Dealer 123 is 15 miles away, perfect match between distance & price
  • The webpage drives the consumer decision, and all prices are within 3% generally
  • They close more sales by presenting the “right” alternative
  • Comes down to how you present the dealer options based mostly on: It may not be the biggest dealer in a market that is the best match, often it is not
    • Dealer Location
    • Dealer Price
    • Close Rate
  • They look at who performs the best also from their affiliate (Zag) dealer network and closing ratio’s there
  • Big issues – Consumers pissed that they got hosed on their trade-in (They are close to rolling out TrueTrade model) – not working with AN on it
  • Dealer not honoring price cert – Consumer gets switched at the store, and feels like price was bogus
  • is their used car channel truetrade built from this model
    • They are scraping the DMS systems of dealers to get data, aggregate the online listings like vAuto
    • Phase 1 – Here is where to price your trade
    • Phase 2 – CR – Condition Report – Use 3rd Party Inspection company (Data Scan, AiM, AutoVin/Adesa, EAA, others…)
    • Phase 3 – Cash offer for car (see my AutoNation notes on how they suggest to do it)
    • Newer COO/Pres Steve Hanson is a good operator
    • DMS extraction is key for them to get the data that drives their complicated algorithms
    • They are getting a ton of data from the DMS extractions and using it against the dealer to drive pricing down – this is a big risk for them, if dealers cut them off they are hosed.
    • Their customer matching process catches customers who change cars, names, address, phone #, email, etc… so they get paid on every customer they send to a dealer if a car is sold, any car is sold
    • They want to convince dealers to pull all of their 3rd party ad dollars back (Trader, cars, us, etc…), and use that money to help drive unit pricing down so they can drive volume to the stores
    • AutoNation just ended their relationship and cut TC off completely
      • Rxx Fxxx was an exec at Zag (CEO I think he said, or COO) – he knows the secret sauce and stated they would never agree to let TC have access to their DMS data – they do get their CRM data
      • Rxx is not a fan and thinks dealers are going to come around and not let TC have DMS access
      • Brought up trade-in value issues TC is having
      • Also brought up lack of control at the store to mitigate bait and switch


Select Affinity Partners (No-Haggle Auto Buying Program) – Zag traditional model – only premium dealers get these leads

  • American Automobile Association (AAA)
  • American Express
  • Bank of America
  • Capital One
  • eBay Motors
  • Geico
  • The Hartford Financial Services
  • Liberty Mutual
  • National Education Association (NEA)
  • Overstock
  • Progressive
  • Nationwide Insurance
  • Pentagon Federal Credit Union (PenFed)
  • United Services Automobile Association (USAA)
  • UPromise

Distribution Partners (TrueCar Price Reports)

  • Automobile Magazine
  • Car Buying Tips
  • Car Price Secrets
  • HomeNet Automotive
  • Honk
  • Motor Trend Magazine
  • New Cars
  • Price Quotes
  • The Car Connection
  • US News Rankings and Reviews
  • Vehix
  • vLane
  • Web2Carz
  • Why Pay Sticker



I am posting this to the ADM Forum section to generate discussions around the topics referenced in each section and the bullet points that follow... What is your opinion or insight on the listed sections shown?

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Tags: Information, Insider, TrueCar

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The logical action for TrueCar to overcome the "kill the beast" movement is to turn on the advertising machine in an attempt to drive lots of consumer traffic to their site.  I am starting to see a lot of TrueCar advertisements in my travels.  This is going to get ugly.  Dealers in competitive markets are going to brutalize one another.  The ads show customers saving thousands of dollars, who wouldn't check it out if shopping for a vehicle.  This is going to get really big and it's going to happen really fast if dealers don't stop now!

Dealers in rural areas who say that they are making money with TrueCar won't be making money when/if more dealers start using the tool.

If the beast grows, dealers are going to become profit stressed and we'll see a reduction in dealers across the country.  There is no doubt in my mind that this will happen.  Eventually dealers and manufacturers will be forced to go with one price shopping.  This strategy would eliminate an environment where TrueCar could prosper.

For vendors watching this unfold from the sidelines, this won't be good for us either?  Fewer dealerships mean less opportunities for all of us. We all need to be united and spread the word about TrueCar.

As always -- Kill The Beast!

Mr. Painter my statements & questions to you:

  1. A fair price is one the customer accepts based on their own parameters not oneS you artificially create with the TureCar Curve…PERIOD!
  2. Zag / TrueCar is a pass through middle man, your company is the very company the internet eventually eliminates. All you and TrueCar are effectively doing is creating a point for the dealer & the customer to argue about (The TrueCar price) It’s not your inventory and not your place to price it. Mr. Painter when you start paying for the dealers overhead you can start pricing the car until then GET OUT OF OUR BUSINESS. If you want to be a marketer great! YOUR JOB, bring a customer to a dealer. THE DEALERS JOB, sell the car.
  3. Mr. Painter & State Attorney Generals where is TureCar’s Responsibility in advertising a price? Where are their disclaimers for incentives etc?
  4. Mr. Painter DOES EVERY DEALER ALLOW Zag / TrueCar into their DMS? I think we all know the answer to that question.
  5. Mr. Painter You say you don't use the dealers DMS data but you buy data from DMS companies, here’s a shocker for you… IT’S NOT THEIR DATA TO SELL!
  6. Mr. Painter it might also shock you to realize that the data given to finance companies and insurance agencies (if Zag / TrueCar really is?) isn't their data to sell either and potentially is a violation of GLB (Gramm, Leach, Bililey Act) and has potential liability for the dealer.  
  7. Mr. Painter is Zag / TrueCar willing to take a feed from the dealership that only includes what you need to bill (Name, Address, phone, email address)? I think not, but I would love to hear the answer on that one.
  8. Mr. Painter who holds Zag / TrueCar accountable, and for what?
  9. Mr. Painter if you are getting paid on the sale how can you say you are objective? That’s non-sense.
  10. Mr. Painter you say your vast data and research shows that price is not what drives a customer to buy convenience and selection are big decision makers, GREAT! Get rid of the TrueCar Curve and let the dealers post the price. As I said earlier it’s not your inventory to price to begin with.

Dealers at the end of the day it is up to us to protect our data from thieves like TrueCar. That is a harsh statement I know, but I have had it with TrueCar trying to justify this process its BS.


I'd love to hear you do a phone interviews with him. Just saying. :)

If I did any type of interview it would be live and on video, and I don't see that happening. From what I have heard of the calls he has made, it seem Scott get to talk and you get to listen but an exchange of Ideas to make the program work for all isnt what he has in mind.

Dead on Larry.

Thanks Gerald, I stayed out of this for a while because I was torn between my love for this industry and a good friend of mine that works for TrueCar.

After a lot of investigation on my own, hearing Scott Painter in several videos and seeing some of the move Zag / TrueCar is making I am convinced that they're plans are not to help the dealer, the industry or even the customer.

I believe TrueCar intends to get a mass of distribution outlets they call "Dealer Partners" & a critical mass of customers and go direct to the OEM.

Great list Larry!

Larry- That list of questions is by far the most cohesive and coherent argument that I have seen yet on the topic. Keep the faith!

Thanks Pete, but we all need to keep the faith and we cannot let DealerTrack get a pass on this deal either, they are as deep into this as TrueCar.

I got a message yesterday from Group1, they were told that TrueCar is not using DealerTrack credit app data to power their website, but wouldn't rule it out. Let's face it why would TrueCar do the deal with DealerTrack for anything but that?

What troubles me the most is that everytime you ask "Do you get the data here?" the answer is always NO, so somehow these guys get the data from somewhere and nowhere. It reminds me of a Dr. Seuss book:

"I do not get the data here, I do not get the data there, We do not use dealer data DealerSam we do not use it the way we plan"

No matter how these guys justify where they get it...It orginates at the dealer and the dealers need to do something about it.

Larry, Their network of internet properties is likely so vast and intertwined that everything can be true or anything can be a lie.....I am with you, it comes from somewhere and they have it........Clinton-ism "It depends on what the meaning of the word 'is' is. If the--if he--if 'is' means is and never has been, that is not--that is one thing. If it means there is none, that was a completely true statement....”

I've been saying since the beginning that if they (TrueCar) got access to either of the major credit app portals (and with that the F&I menu programs) that will virtually destroy the back end profit on these deals as well as the front end. They will have access to rate markup and all back end products in one fell swoop. By the way, I wonder if this is why Ally bank (GM and Chrysler's captive finance provider) has been trying to push dealers over to Dealer Track as opposed to Route One. I would hate to think that this was premeditated on GM's part.

Pete just like any network DealerTrack & TrueCar are only as valuable as the dealers that sign up and support them.

If the dealers leave them so will the banks and the customers. 

The question is... "Do we have the BALLS to do it?" 

I know that may be easy for me to say but RouteOne is an alternative and be honest with yourself do you really want to sell an extra 10 to 20 cars per mo for $1000 gross profit...REALLY? 


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