TRUE CAR and ZAG Cyber Bandits, Parasites or Good for the Car 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

 

 

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.

Read this article as a reference: http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN... 

AND, if you doubt the mission... read this...  http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf

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Comment by James A. Ziegler on December 14, 2011 at 9:03am

NO Alan, I am going to keep this conversation close to the vest. Nothing changed with me except the guy is likable. I will say it was cordial except a few tense moments when I was being "Ziegler". Truthfully, everything Scott Painter told me I had already heard, seen or read... MY problem is that I don't believe everything I'm being told. 

Comment by Al Mosher on December 14, 2011 at 8:32am

Good Morning Jim,

Care to share any more about your conversation with Scott Painter yesterday? Inquiring minds want to know!

Comment by Keith Shetterly on December 14, 2011 at 8:31am

@ Eric:  They've become worse than a politician.  Whether they DIRECTLY pull from the dealers' DMS or not now (because they said they DID before, before they said they don't), they have partnerships with folks like DealerTrack, who has invested part of the $200million with USAA into TrueCar.  SO, my position is simple:  The DEALERS do the selling.  By definition, no matter what 2nd or 3rd or beyond hand gave it to them, the data that is being repurposed against dealers on TrueCar.com in their bell curve is the DEALERS' data.  It started in their DMS.  They sold the car.  $1.5billion "saved" for consumers by TrueCar--how much of that is from dealers' profits?  Their employees' paychecks?  WHY WOULD ANY DEALER SUPPORT THIS COMPANY?

Comment by Jerry Thibeau on December 14, 2011 at 8:24am

Painting a Zebra white and putting a horn on it does not make it a unicorn, it's still a Zebra.  Check this Zebra out: http://indealers.com/

Comment by Jerry Thibeau on December 14, 2011 at 8:19am

Looks like Hyundai has developed some sort of relationship with TrueCar.  Notice the link back to Hyundai at the bottom of the bell curve: http://dealer.truecar.com/oh/hyundai/akron/accent-report.html

Any Hyundai dealers on here feel like commenting?

Comment by James A. Ziegler on December 14, 2011 at 8:01am

Spoke to Scott Painter yesterday. Long conversation. I don't believe it changed my opinions on TrueCar, may have clarified some misconceptions but validated others. JIM

Comment by Thomas A. Kelly on December 14, 2011 at 6:44am

@ Eric.... A full vetting of vendors/consultants by an independent body would be useful. Dealers would be amazed at the wolves running about dressed as sheep if they had the time and resources to research them.

Comment by Keith Shetterly on December 13, 2011 at 10:20pm

Guess who's been looking at my LinkedIn profile from TrueCa the last few days and today?  Seems everybody BUT Scott Painter, whom I attempted to email via LinkedIn.  What, did they forget to call me, too?  :)  Guess I didn't make the cut.  Maybe it was that technology and data background, even if it's ten years old?  Anyway, here's the access by TrueCar:

Comment by Larry Muirhead on December 13, 2011 at 5:32pm

@Mike Warwick.


I agree. Customers have no issue telling us they used our price against 3 other stores, 5 different web-sites and have 2 family members in the business they plan on consulting before making a decision. We sell Scions at our store. Yes they want to negotiate up to the point where we remind them that Scion customer focus groups set in process a non-negotiation policy into the franchise. It's amazing how quickly customers accept that and buy the car feeling GREAT knowing that they bought something that will hold the Manufactures Price point and value associated to it.
On Toyota, we have customers that shove the truecar price paper in our face with NO options built in and still insist we shave off hundreds more dollars and tint the windows to "make them happy". People these days are insulted when you go back for a bump. Back in the day negotiations went both ways a few pencils and the deal is done... NOT in todays market.

 

Comment by Mike Warwick on December 13, 2011 at 4:18pm

Here's the problem with one price - customers think it works great for everyone else, just not them.  They have no problem with their neighbor paying one price but many think they are great negotiators and want to grind out a better deal. The other issue is with repeat customers.  Please don't tell me that the person who has bought five cars and referred three relatives is going to be okay with paying the same price as a first time car buyer.  Not a chance. You would not believe how many Truecar customers thought their $300 below invoice deal was a great starting point for negotiations.  The idea that these customers just come in and sign paperwork is hilarious. Our car buying culture is based around negotiating.  If customers hated negotiating as much as they claim in the surveys we see, it would only take a few minutes to write these deals.  The reality is that customers want to negotiate.  The real issue is that customers don't know what is a great deal and when to stop negotiating.

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