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True Car and ZAG - Cyber Bandits or Good for the 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

 

 

 

 

 

 

EDITOR'S NOTE: The ADM Professional Community has assigned a short-cut domain name to this blog post by Jim Ziegler to make it very easy for ADM members and readers to refer others to this web page. Please use the following URL:

www.TrueCarDealer.com

 

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.

Comment

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Comment by Jim Radogna on December 30, 2011 at 3:21pm
Nah Chuck, that letter was written by folks a lot smarter than me :-). Thanks for the mention. Happy and healthy New Year to you and yours!
Comment by Chuck Dapoz on December 30, 2011 at 2:49pm

The Indiana letter looks based on Jim Radogna's recent post, "Legal Lessons to be Learned from the TrueCar Discussions." It's on dealerElite (http://www.dealerelite.net/profiles/blogs/legal-lessons-to-be-learn...) and other sites.

Jim: did you have a hand in the Indiana letter?


Comment by Dan Hankins on December 30, 2011 at 12:46pm

My pleasure, Jim. 

Comment by James A. Ziegler on December 30, 2011 at 12:42pm

Thank you...was expecting this to come across. JIM

Comment by Dan Hankins on December 30, 2011 at 12:39pm

This just forwarded to me from Auto Dealers Association of Indiana. 

Comment by Ralph Paglia on December 29, 2011 at 11:03pm
What if you found out that an OEM equipment supplier was downloading all your dealership's DMS transaction data for a supposedly "free" program on every new car you sold... And was in turn selling that data to companies like TrueCar???
Comment by Rob Fontano on December 29, 2011 at 1:20pm

@George That won't happen because Yahoo needs TrueCar since being dropped by Cars.com.

Comment by James A. Ziegler on December 29, 2011 at 12:58pm

This might be a shocker... what if I were to tell you one of the major manufacturers might be buying TrueCar leads and forcing their dealers prices even lower? I'll know, and blow it up in the next few days. 

Comment by James A. Ziegler on December 29, 2011 at 12:43pm

TO BE CLEAR.. no one is suggesting that any organization boycott TrueCar. Dealerships may elect to do that as individuals to protect yourselves from exposure to liabilities associated with your data.

We are suggesting that your dealer associations take stronger action to educate dealers to which laws, if any, are being broken in their states. (which many are doing) 

The main thing we'd like to see happen is government agencies like the Federal Trade Commission and Consumer fraud protection agencies take a hard look at what's going down with, not only TrueCar, but all data extractors taking and reselling and passing around consumer data. AND to examine their advertising claims and processes. The only thing we're asking Dealer Associations to do is lobby for protection and corrective legislations where appropriate. 

Nobody would mind doing business with TrueCar, or anyone else doing legitimate business. 

Comment by Keith Shetterly on December 29, 2011 at 8:26am

Here's some simple math for True Car dealers--but, first, everyone understand that Zag customers were CONVERTED to TrueCar, and Zag was essentially an affiliate program.  Where you hope to move a unit for a volume step and likely give up the financing. Not any more!   Let's say your dealership sells 100 cars a month, and 5 of them were TrueCar.  Now, with TC's advertising and your agreement with TC, you could easily see 15 or 20 TrueCar clients! Except you won't sell more than 100 because TrueCar is NOT incremental business.  You're just going to pay TC $300 for the 15 or 20 because the customer stopped at the TC website before they came over.  And don't forget the . . . "great" price they will pay.  Welcome to a parasitic relationship, and you're the host.

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