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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 Jason Manning on January 1, 2012 at 9:29pm
This discussion is about dealers securing their data, following Federal, State and Local laws, and protecting themselves and their vendors (who also need them) from being eliminated and reduced, as a part of TrueCar's goals. We are preserving Local economic growth with proper decisions and direction. Each individual dealer must decide for themselves. This is a no brainer though.
Comment by Tom Gorham on December 31, 2011 at 3:22pm

Well spoken - well taken.

Comment by Jim Radogna on December 31, 2011 at 10:44am

Very well said..."Bear in mind that decisions to do or not to do business with a particular vendor must be made by individual dealerships. Any discussions, activities or communications among dealers as a group, whether an association is involved or not, could potentially violate federal and state antitrust laws."

Comment by David Flowers on December 31, 2011 at 8:04am

The following was included in an email bulletin from the Georgia Auto Dealers Association this week:

 

Online Sales of Vehicles 

Given the recent media attention and the interest of state regulators in TrueCars/Zag, GADA reminds dealers to review applicable advertising rules when considering working with this or any other vendor.

Based on information that GADA has received, a number of states are considering the potential violations of advertising rules that may exist with this type of web service. Remember that under Georgia law, the dealer is ultimately responsible for advertising violations, regardless of whether a third party is involved. For example, as GADA has advised numerous times, it is a violation of Georgia advertising rules to add any fees to an advertised price, other than tax, tag, title and lemon law. An advertisement that quotes price "plus" some other additional amount is considered deceptive under Georgia law and subjects a dealer to penalties by the Office of Consumer Protection, as well as potential liability to consumers.

Prior to participating in any marketing program, dealers should review the OCP's Auto Advertising Enforcement Policies which can be accessed here.

Also, various state regulators and manufacturers have expressed concern over access to data and customer information. Dealers must consider the applicable privacy rules when contracting with any vendor that requests access to customer information.

GADA brings these issues to your attention so that you can make informed decisions. As with any vendor contract, GADA encourages you to consult with your attorneys to discuss potential contractual and regulatory issues.

Bear in mind that decisions to do or not to do business with a particular vendor must be made by individual dealerships. Any discussions, activities or communications among dealers as a group, whether an association is involved or not, could potentially violate federal and state antitrust laws.

Comment by James A. Ziegler on December 31, 2011 at 5:37am

Thanks Thomas that's funny. JIM

Comment by Thomas A. Kelly on December 31, 2011 at 1:33am

Comment by James A. Ziegler on December 30, 2011 at 3:35pm

Look for three additional states to issue something next week, looking west...

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. 

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