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 Jim Kristoff on November 30, 2011 at 12:13pm

Over 7000 views.......on the way to over 10,000........

Comment by Jim Kristoff on November 30, 2011 at 12:03pm

The REAL issue is the collection of transaction data and its use to put Automotive Dealers OUT OF BUSINESS!!

NADA and State Dealer Associations should be looking at this HARD!!!!

TrueCar/Zag have an agenda.....and it is NOT in favor of the Dealers........They have stated their purpose....

 

STOP FEEDING THEM INFORMATION!!!

Comment by Keith Shetterly on November 30, 2011 at 11:58am

@ Chuck Wood . . . DealerTrack . . . DealerTrack . . . AutoExchange u/c inventory tool . . . JEEZ!!!  This must be what it feels like to wake up to the idea that termites have strongly infested your home.

Comment by Brian Willian on November 30, 2011 at 11:54am

Sorry, Jose.  I cannot let your assetion go unchallenged.  As of this morning's Honda Zone sales report you have RDR'd 66 units.  Your year-to-date sales are 1169.  That is nowhere near 200 total units, much less ZAG deals.  I appreciate good discussion, especially about an important issue like this, but that kind of misinformation is not helping anyone.

Comment by James Carroll on November 30, 2011 at 11:53am

@Jose  Holding back on that trade may become a bit more of a challenge once TrueCar launches ClearBook (so they can crush that market as well). But hey it's all a moot point anyway because if TrueCar has thier way we'll all be in another industry because this one doesn't need sales staff because cars are a commodity. ...and THAT is the real problem.

Comment by Chuck Wood on November 30, 2011 at 11:53am

You might want to reconsider how you send your applications to your lenders too:

DealerTrack to Sell ALG, Inc. to TrueCar, Inc.

 

LAKE SUCCESS, N.Y., Aug. 22, 2011 /PRNewswire/ -- DealerTrack Holdings, Inc. (Nasdaq: TRAK), today announced that it has signed an agreement to sell its wholly owned subsidiary, ALG, Inc., to TrueCar, Inc.  In connection with the sale, DealerTrack has entered into additional commercial arrangements with TrueCar, including a perpetual, royalty-free license for DealerTrack to use certain ALG intellectual property and data in its products and services.  

(Logo:  http://photos.prnewswire.com/prnh/20101028/DEALERTRACKLOGO )

The transaction is structured as a tax-free reorganization, and in consideration for the sale of ALG, DealerTrack will receive a 15.0 percent equity interest in TrueCar and warrants to increase its ownership interest to up to 19.9 percent.  As part of the transaction, DealerTrack will have the limited right to appoint a director to TrueCar's Board.   The sale is expected to close in the fourth quarter, subject to customary closing conditions and regulatory approval.  

DealerTrack expects to recognize a pre-tax gain for GAAP purposes of at least $40 million on the sale, but does not expect this transaction to have an impact on 2011 non-GAAP guidance.  DealerTrack will provide additional details on the financial impact of this transaction during its third quarter earnings call.  

Mark F. O'Neil, chairman and chief executive officer of DealerTrack, commented, "This transaction exemplifies our strategy of effectively allocating capital to maximize value for DealerTrack stockholders.   We are not only selling a business which we have grown significantly since we acquired it back in 2005, we are  making an investment in a high-growth, progressive company that is positively impacting the way cars are retailed in the U.S. market." 

 

Hmmmmm...

 

Comment by Larry Muirhead on November 30, 2011 at 11:51am

@

Comment by Jose Alonso 9 minutes ago

Larry I know that 60K seems like a lot on fees but take in consideration the 112k in profit $699 dealer fee per vehicle and the long custumer relation that you will biuld with those customers. We have to think about our service and parts as well. What about holding back on the trade? Larry I am telling you if you play it right you can make a decent profit and build a long customer relation.

 

Thanks Jose,

 

We don't charge a Dealer fee. Now what?

Comment by Keith Shetterly on November 30, 2011 at 11:50am

Okay, dealers, what is WRONG with this equation:  Thousands of dealers provide pricing info on all your sales to Zag + TrueCar.com advertises low-ball prices to consumers who come in + You successfully "sell" these leads and pay Truecar.com $299 a pop + TrueCar now also tells the consumer what their trade is "worth" on ClearBook.com using the same dealers thousands and thousands of sales so you CANNOT HOLD = YOU ARE OUT OF BUSINESS AS YOU KNOW IT NOW.  And TrueCar will TELL YOU PUBLICALLY THAT IS THEIR AGENDA.  Come on, folks, we are SMARTER than this, aren't we?  If we sell our future out like this, we may as get elected to Congress.  We'd fit in that "stuck on stupid" real well.  Help!  :)  THERE ARE SMART DEALERS!!!  YOU ARE ONE OF THEM!!! WAKE UP!!!!!!!!!!!!!!!!!!!!  :)

Comment by James A. Ziegler on November 30, 2011 at 11:44am

Those of you who say you're making money on TC Deals because you're holding on the trade and F&I Profits accessories, TrueCar is correcting that oversight with their new service on Trade-in transactions I'm sure this will help.

Comment by Joe Clementi on November 30, 2011 at 11:36am

DITTO!!!!

Third, it's the dealers and folks such as yourself that don't get #1 and #2 as any problem that is a proglrm.  From your blog, I don't hate the player or the game.  This is a RIGGED game with an end that equals your OWN job's extinction.  They're about to replace Cars.com as Yahoo.com's partner.  Think that might affect your life?

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