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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 Keith Shetterly on March 23, 2012 at 9:54pm

@ Brian:  Thanks for the update on Jim.  He called me after the surgery, and he was so much himself but also talking about some issues.  The best part of the TrueCar issues was, for me, getting to know him better.  A great friend.  I will do as you ask.

I have told TC many times that a change in leadership is all that will suffice for the strongest hope to be seen differently for a future with dealers.  There was a time, support him or not, that Nixon had to step down.  Painter has, whether he wants it or not, created that time for himself.  His own "Nixon moment".  That's just my opinion, not offered maliciously but with the best hope for dealers as a whole.

On that note, hopefully Mike Timmons and Mr. Watson (?) are neither one Spiro Agnew . . . ;)

Comment by Brian Pasch on March 23, 2012 at 9:40pm

I want to ask all ADM Members who have been following this very important article to pray for Jim Ziegler as he recovers from his knee replacement operation which has a few complications that may delay he recovery.  

Send a note to Jim or give him a call to show your appreciation for his "voice" on ADM.

With that said, it is clear that "" executives want to restart their engagement with car dealers after a number of false steps.

In any organization, leadership is the foundation for long term success.

As I try to understand all the commentary from recent "hires" and dealers who defend the TrueCar model, I just have to ask if the leadership has changed? 

Is the core philosophy that encouraged TrueCar CEO Scott Painter to "bash" car dealers changed?  At the end of the day, car dealers WILL embrace any vendors that help them sell more cars and reach their business goals.

Has done anything to convince car dealers that their model is in their best  long term interests? 

That, seems to be lost in all the banter...

Comment by Keith Shetterly on March 23, 2012 at 9:03pm

I believe that the consumer will continue to demand modernization that many dealers, and some franchise laws, will have trouble with.  If I had a time machine to go back in time and somehow direct TRUECar, or $200million now for the future to spend, I would build that consumer experience WITH dealers which modernizes and provides the best possible experience for consumers--and a strong future for dealers who want to modernize.  Whatever Painter truly regrets, I will long be disappointed at the chance that was had by TRUECar and lost, or at least terribly damaged.

This industry needs help to land on the moving target that the consumer is setting.  Eventually, no matter what any of us might do to resist it OR what any vendors do to try and control that target, the consumer will have their experience they demand.

We lost a good chance for that with TRUECar's hubris, and now they have a long, long way to go and Thomas fairly sets a high bar that TRUECAR caused themselves..  In the meantime, no matter what else, we need to find a way to modernize that allows the most dealers the chance to prosper.

And if I had a way to personally do that, I would work on it night and day.  Call me a dreamer.  :)

Comment by Michael Timmons on March 23, 2012 at 8:48pm

@ Thomas. As an organization, our mission is simple... introduce customers who have confidence in unbiased third party pricing to enable a more profitable, smoother transaction for our dealers. 

We do not need to be the authority on the industry as it relates to how many or how few dealers should be in a market. I am sure you, like many of our friends who own dealerships, have your own opinion on that topic. I know that Scott regrets commenting on this and the role of the sales associate and I do not believe you will ever hear that discussion from him again.

As for the role of the salesperson today, I believe that as the industry continues to evolve the salesperson's responsibilities and skills evolve as well. But ultimately, people buy from people and as my first sales trainer, the late Jackie B. Cooper told me "selling isn't just about filling orders but finding the customers needs". That will never change!!

Comment by Ralph Paglia on March 23, 2012 at 8:47pm

Thomas - I do not disagree with you and would also like to share a discussion I had with Bill Underriner, NADA Chairman on Tuesday afternoon... Bill agreed with me that the American Network of franchised car dealers, as a whole should not be financing any supplier's business model that seeks to profit, expand or exploit distrust between automotive consumers and dealers.  Bill Underriner and I both agreed that dealers are far better off investing marketing and advertising dollars into building greater trust among consumers for car dealers, and NOT financing the corporate style "monetization" of distrust and fear among consumers towards car dealers that companies such as TrueCar seem to be doing.

Comment by Thomas A. Kelly on March 23, 2012 at 8:02pm

Ralph, The messenger has changed , not the message. The message was and IS to this day : fewer dealers, do not need salespeople as we know them today, TrueCar  has a need to use our data beyond the confirmation of a sale.  If what qualifies a new spokesperson(s) as “promising” is being a nice fella then Michael  meets the criteria… I don’t  need to break bread with him to know that….When Michael or whoever speaks for TC changes Painter’s stated mission, then I will acknowledge promise.

Comment by Ralph Paglia on March 23, 2012 at 1:07pm

I had lunch with Michael Timmons and several other TrueCar executives on Tuesday in Miami... We had a spirited dialogue that was triggered by my descriptions of why I believe truecar participation to be a mistake for most dealerships.  Regardless of the business case I made against Truecar participation by dealers, the TrueCar executive team listened and responded in the most professional manner that i could have imagined given the objections i was describing to them. At the end of our meeting as i walked back into the Automotive Leadership Roundtable I could not help but think about the concept of a company transforming themselves and the examples we have seen in the auto industry.  It was not very long ago when Autotrader was a predatory supplier whose singular goal was to extract as much profit as possible from each dealer with a never ending series of price increases and a slew of new products that delivered little to know actual value to dealers... Then a few years ago Chip Perry made the publicly stated decision to transform the company, and he has, into a much more results focused dealership supplier of marketing services.  I am not yet ready to say this will happen to TrueCar, but if their management team commits to the transformation of their business, then they certainly have the intellectual horsepower and capital to do it.

Comment by Michael Timmons on March 23, 2012 at 12:02pm

@Stan..TRUECar does have thousands of dealers that either, swear by them or even swear at them, as I witnessed this week in front of some of the largest volume dealers in the country. Some dealers will see the change to put processes and tools in place to be more dealer friendly as a positive sign and want the additional leads TC and its Affinity partners provide. Other dealers, as you stated will not be able to put the past actions of TC aside and will continue to market their dealerships in other ways. The right answer is different for every dealer and I hope that in the future you will be able to look at the improvements we are making and at least acknowledge the fact that TRUECar has changed through this period. As I have stated to many on this forum privately, I appreciate the professional dialogue from the members and more importantly the catalyst provided by industry leaders to help TC focus on the Dealers AND not only the Consumers. Enjoy the weekend.

Comment by Stan Sher on March 23, 2012 at 10:08am
I don't care that TrueCar is starting to try to make good and save relationships. I think what they did from the start is enough reason to not do business with them. If you are still using TrueCar in your store then you are asleep at the wheel, very foolish and gluten for punishment. I know one store that remains to be foolish and swears by them out here in NJ especially when their direct competitor advertises on their own site that TrueCar is a scam.
Comment by Thomas Callaway on March 23, 2012 at 10:01am

Ya think?  I know I posted some comments two weeks ago and was contact by the TC rep in less than 12 hours.

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