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 Joe Clementi on December 1, 2011 at 3:38pm

FYI...4 deals in the past two days with TC/ZAG pricing ALL under invoice significantly,  ALL no-trade-ins, and every deal the dealer that subscribes to this crap "DIDN'T HAVE THE CAR".  Imaging that?  Wait...before you say it!  The customer refuses dialog beyone that point once we declined to match those prices, as they will continue to shop dealers until they find someone willing to match.  The problem is not that I didn't take those deals.  IT IS about the PERCEPTION of both my dealership and the one quoting the prices.  Whose winning here?  The customers all left "frustrated" that they couldn't get the car they wanted from either dealer at the price they were quoted.  What is the perception of the deal? My dealership loses...the customer loses...the credibility is gone and we ALL look like crooks.  Stop this maddness and KILL THE BEAST

Comment by Keith Shetterly on December 1, 2011 at 2:43pm

@ Michael, great post!

Comment by Jim Kristoff on December 1, 2011 at 2:22pm

@Stan.....GREAT blog!!!

Comment by Mike theCarGuy Correra on December 1, 2011 at 2:19pm

While I totaly LOVE the 'Kill the Beast' movement that seems to be gaing speed (!), the reality is that good ole Scott is a true entrepreneurial hydra and ZAG is only one of the heads he has. He has made a career, along with many millions from working the ends against each other with companies like SharesPost, PriceLock, CarsDirect and of course ZAG. He profits from both sides in wars he creates and he more than likely has yet another form of his evil already in the works! We do all need to work aggressivly at getting the word out about ZAG and their practices, and as dealers cancel and flat out stop signing up for their program ZAG will hopefully wither away and be gone. I find myself feeling like a life long smoker who finally kicked the habbit and now sternly lectures everyone I see lighting up about the dangers! For years I was an advocate of ZAG, I brought them into 4 dealerships I have worked for over the years and found myself very happy when I started at a new dealership and found out they were already on the ZAG program. Five months ago I was part of the decision making team that canceled our agreement with ZAG and things have never been better! I see now, as I have said before, it was only the fear of the loss of leads/sales/profits that kept me from doing what was needed! Since blowing out Scotts profit machine we have seen a rise in gross average in our Internet Sales Department and with a little elbow greese, or fingers on keyboard greese(!), our volume has picked up as well! All while Honda has experienced inventory shortages like we've never had before and in an economy that still stalls, we are selling more and making more than when we were under the ZAG spell! It can be done, be strong, cut the cord! The beast may not die but the head with the deepest bite will at least be gone and together we will be able to handle what ever Scott dreams up next! Woo Yeah!! :)

Comment by Stan Sher on December 1, 2011 at 2:18pm

I have added my own addition to this site as well as many others.  This blog is currently syndicated to over 10 blogs and has numerous tweets.  http://www.dealerelite.net/profiles/blogs/the-reality-of-zag-com-tr...

 

If you want to see more interesting stuff.  I added info on ALG and DealerTrack on my very own http://dealer-etraining.posterous.com/the-reality-of-zagcomtruecar

Comment by Jim Kristoff on December 1, 2011 at 1:44pm

YES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

Comment by Keith Shetterly 38 seconds ago

Thanks Jim and Nancy!  I'm so glad that Jim Ziegler put this blog up to begin with to get this industry-record discussion (it will stand for some time for the page view stat, no doubt).  NADA needs to get involved on this, especially from the legal angle.  And the OEMs need to protect their profits by understanding this is a direct attack on their distribution channel!

 

To all on this blog, please read www.keithshetterly.com/2011/12/why-you-must-cancel-truecarzag-now.html and report back HERE to this blog.  

Thanks to all, especially, again, Jim Ziegler.

 

Comment by Keith Shetterly on December 1, 2011 at 1:43pm

Thanks Jim and Nancy!  I'm so glad that Jim Ziegler put this blog up to begin with to get this industry-record discussion (it will stand for some time for the page view stat, no doubt).  NADA needs to get involved on this, especially from the legal angle.  And the OEMs need to protect their profits by understanding this is a direct attack on their distribution channel!

 

To all on this blog, please read www.keithshetterly.com/2011/12/why-you-must-cancel-truecarzag-now.html and report back HERE to this blog.  

Thanks to all, especially, again, Jim Ziegler.

 

Keith

Comment by Jim Kristoff on December 1, 2011 at 1:38pm

@Keith..........AWESOME blog!!!

 

http://keithshetterlyauto.blogspot.com/2011/12/why-you-must-cancel-...

 

NOT enough dealers truly understand the impact that TrueCar/Zag is having......a MUST read!!

Comment by NANCY SIMMONS on December 1, 2011 at 1:38pm

Great job, Keith...I am reposting this on facebook in Carbucks and on my wall!   Scary...ramifications greater than anyone can imagine... The auto industry offers fantastic careers for so many which will domino downfall many other industries if we embrace the omission of sales personnel.... Will we allow robots and Kiosk to take over our country... the downfall of the economy and the world as we know it!!!!

Comment by Keith Shetterly on December 1, 2011 at 1:18pm

Dealers, OEMs, and NADA:  I have summarized my thoughts, the thoughts of others here, and the information I found and that others found on the web (annotated) here:  http://keithshetterlyauto.blogspot.com/2011/12/why-you-must-cancel-...  All the pertinent links are in that spot, too, at the bottom in the footnotes/reference section

Please feel free to share this information with whomever will help.  Also, please keep this blog HERE alive by commenting back HERE on what I wrote.  This blog is a rally point to Kill The Beast, and we don't need to lose momentum here.

Many, many thanks to Jim Ziegler for bringing this to our attention, and to all this blog's participants.

 

Thanks!

 

Keith

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