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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:


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.

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Comment by Thomas A. Kelly on January 13, 2012 at 3:36am

Stephen Hansen, President of TrueCar - An open letter to you.

TrueCar’s purchase of the domain names, f**, .net, and .org is utterly deplorable, condemnable in the strongest possible terms. I call on you, Stephen Hansen, President of TrueCar to immediately abandon these domains and provide a public condemnation of their existence and accept full responsibility for TrueCar’s actions in the purchase of these URLs.

Tom Kelly

Comment by Thomas A. Kelly on January 13, 2012 at 2:28am


Stephen Hansen, President of TrueCar:

Stephen Hansen on January 11, 2012 at 12:14 pm

“May I just take a moment to say, as President of TrueCar, I have never discussed or authorized anyone to make a purchase of any anti-dealer URL. At no time have we ever contemplated an “anti-dealer” campaign. Love us or hate us, we’re not stupid.”

Comment by Matt Tucker on January 12, 2012 at 8:39pm
Ok, so who else started singing "Oklahoma, where the..." when they read Jim's last post?
Comment by James A. Ziegler on January 12, 2012 at 8:29pm

Oklahoma Motor Vehicle Commission just shut Down TrueCar in Oklahoma. Cited advertising and the fact they are acting as a broker. Dealers will be fined $1000 per occurrence for any deals with TrueCar after this until resolved.

Comment by Stan Sher on January 12, 2012 at 1:46pm
I did my part. Zag was sending their PA dealers leads to hound me. So I sent these dealers to read these blogs. It pays dividends. Destroy TrueCar.
Comment by Keith Shetterly on January 12, 2012 at 1:18pm

@ Matt:  TC doesn't think that, imho.  That's just bluster for their investors' eyes and ears, I think.

Comment by Chris Branchide on January 12, 2012 at 12:41pm

To: PAA Dealer Members
From: John Devlin, President

Over the past several weeks, PAA has been closely monitoring the activity surrounding TrueCar and has received phone calls from dealers regarding TrueCar’s program.
There are several subscription-based sales-marketing programs which require a dealer to pay an annual or monthly fee for vehicle sale leads. TrueCar’s program, however, provides that it is only compensated if the introduction it arranges between the dealer and customer results in a sale. Programs that set dealer fees tied directly or indirectly to a transaction involving the sale of a new or used vehicle appear to constitute the unlawful act of brokering. Pennsylvania law prohibits brokering as set forth below.
All dealers should carefully review their relationships with third party lead providers for compliance with all state and federal laws. When evaluating a relationship with a third party lead and/or sales provider, a dealer should consider the following:
1) Pennsylvania prohibits a person from acting as or holding themselves out to be a broker in the advertising, buying or selling of any new or used vehicle. A broker is defined as any person who, for any direct or indirect commission, compensation or other consideration, arranges or offers to arrange a transaction involving the sale of a new or used vehicle or establishes or offers to establish a plan or program involving the sale of a new or used vehicle and who is not:
i) a licensed dealer or a licensed employee of a new or used vehicle dealer; or
ii) a licensed representative or a licensed employee of a manufacturer or distributor.
2) Dealerships are required to know which third party companies are accessing their DMS, and ultimately where their customer information is going and for what purposes the information will be used. Federal law requires dealers to protect customer information and inform customers, through a privacy notice, what will happen with nonpublic personal financial information. Allowing various third party companies to access a DMS may not be in compliance with a privacy policy and a security process at a dealership.
3) A dealership should ensure that all third party companies with which the dealership has entered into agreements to market vehicles to customers are complying with all of the advertising laws and regulations regardless of the advertising medium (i.e. internet, print, television, radio etc.).
PAA will continue to monitor the situation involving TrueCar and other third party lead and/or sales providers. As additional information becomes available, PAA will update its members. If dealers have questions regarding the activities of a third party lead and/or sales provider, they should contact their attorney.

Comment by Matt Tucker on January 12, 2012 at 11:39am

@Jim -


It's funny that TC thinks they have more of the ear of the dealers assn. than the actual dealers do. It's just them trying to show again how "stoopid" we are.

Weak dealers and sales people may feel the need for TC.  I am almost floored when I see sales people responding with support for this type of salesmanship, or better said, lack there of. But that's my 2 cents and if some dealers or sales people still reading this feel that TC is needed, time to look in the mirror boys and reevaluate if you are in the right business - I hear McDonalds has opening in the drive-thru windows.

Comment by James A. Ziegler on January 12, 2012 at 11:19am

Don't think it's over guys, these people are planning to go back to the states with revised plans which are just regurgitated versions equaling $300 per unit after you do the funky backwards math... spoke to several assn. nobody's buying it. 

Comment by Jason Manning on January 12, 2012 at 10:39am
TrueCar is already Lost in Space. It's important for dealers to stay grounded and focused.

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