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

Views: 48188

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Comment by James A. Ziegler on November 29, 2011 at 7:55am

One of my dealers just ran an audit at my request of TrueCar Deals they did and told me most of them were coming in at $150 to $200 over triple net. Apparently difficult to pay for the sales person and the TrueCar fee.  

 

TrueCar philosophy...In the words of the late Groucho Marx  "if we don't sell too many of these we might break even."

Comment by David Ruggles on November 29, 2011 at 7:52am

TrueCar provides dealers with sale volume they were going to get anyway.  The idea that TrueCar increases total overall volume is ludicrous.  TrueCar powers the volume of 80 leading brands, volume which was going to happen anyway.  It just uses information provided by the dealer, either knowingly or unknowingly, to put downward pressure on gross profit and direct the consumer to the dealer where the consumer receives a lower profit deal.

The objective of a dealer isn't "no haggle."  It is gross profit.  Besides, anyone who has been in the retail business knows there is no such thing as "no haggle."  Even if the dealer is losing money, the buyer haggles.  In their mind, the money at stake isn't a few dollars of profit, but the $25K plus MSRP.  In the buyer's mind, there is always more to be had.  After all, TrueCar proves that to them with their "dashboard" which shows how some consumers get "taken advantage of."  This helps reinforce the typical buyer theory that there is always more to be had.

IF dealers pay a smaller fee to TrueCar than their normal advertising/marketing expense per vehicle retailed, it is offset by the lower gross profit. 

 

The only thing TrueCar has accomplished is lowering the gross profit on volume that was going to be done anyway, by steering that business to participating TrueCar dealers.  AND it does so using information provided by the dealers themselves.  Participating dealers have no right to complain as they are willing co-conspirators in their own demise.  Unfortunately, they are taking everyone else along for the ride.

Comment by Jim Kristoff on November 29, 2011 at 7:50am

Comparing what Devin LaCrosse said vs. the "whitepaper" is very interesting.....

I believe Devin should begin writing for the Herman Cain campaign....I think Mr. Cain could use a little "spin" at this point.

 

This particular point is rather amusing.......

 

TrueCar Helps Dealers Improve Margins:   In most states, TrueCar operates a performance-based billing model, making TrueCar 100% aligned with dealers.   Dealers earn their business every day, and so should their marketing programs.  TrueCar’s dealer fees are well below the average advertising expense per new vehicle retailed per NADA.  TrueCar also helps lower dealership selling costs by providing high-quality customers and no need for haggling.   Finally, TrueCar provides faster inventory turns, helping TrueCar Dealers lower inventory costs.   Put it all together, and the cost savings that TrueCar provides to dealers help them keep their prices low, driving even more volume.    Many TrueCar Dealers have stated that TrueCar is their most effective marketing program.

 

Of course that is just my opinion, and I could be wrong........

Comment by Stanley Esposito on November 29, 2011 at 7:35am

What does true car think of the value of a sales consultant? Working with Stan Esposito is easily worth a couple hundred dollars! So if truecar is the "new world order" someone needs to tell the customer that this up front pricing is not the starting point it is the price. When the customer has the price in hand they still want to shop? I see in an earlier post someone says truecar provides dealers with "significant volume." If a store has only one or two of a certain model the truecar price goes out the window. As a sales consultant I will adjust and still be better then the other guy.

 

Comment by James A. Ziegler on November 29, 2011 at 7:28am

I am pleased to see Devin posting here. I was hoping a TrueCar representative would show up and add balance to the opinions on this blog.In fairness, just to be clear, we called their offices and invited them to participate here in that so much of the opinions were heated and negative,  especially mine. 

Comment by Keith Shetterly on November 28, 2011 at 11:09pm

Hi Devin.  Does TrueCar believe in the "commoditization of the car" as in "Upfront pricing is the new world order. Its arrival heralds a bona fide tipping point in automotive retailing. Upfront pricing is non-negotiable in an environment defined by net margin compression, anonymous access to robust product information for consumers via the Internet, and the commoditization of the car. To facilitate a purchasing decision, the online commodity shopper wants an informational advantage, and that is truly achieved only when the buyer can get access to an upfront price—anonymously—and has the tools to compare that price with the market average, to know it’s fair. This combination of upfront pricing and pricing 3White Paper 03 The Case for Upfront Pricing“relevancy”—that is, unimpeachably accurate data about  what others have paid for the same vehicles—ultimately will set market forces free within the auto industry for the first time. This market equilibrium is good news for consumers and for dealers who know how to compete." from http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf?  If so, how does that line up with the description you put here on this thread?  As Manager of Dealer Development, do you see any issue for dealers with these statements?

Thank you for joining the thread.

Comment by Michael Deville on November 28, 2011 at 10:44pm

When any company operates on a fill my pocket system, then that's not good for anyone.  Fill our pockets and give the dealer a fair margin.  B of A, US Bank, come on lets reverse this Trufees.com The biggest pocket fillers are a reference for Trucar. OK, give me a Cigar and let me laugh.

Comment by Devin LaCrosse on November 28, 2011 at 10:31pm
TrueCar Provides Dealers With Significant Sales Volume:    TrueCar currently powers the online car buying services for over 80 leading brands, including Consumer Reports, many AAA clubs, USAA, GEICO, Progressive, American Express, Bank of America, U.S. Bank, TrueCar.com, AOL Autos and U.S. News.  By enabling participating dealers to provide upfront no-haggle price quotes, TrueCar has helped over 5500 dealers nationwide – including large dealer groups and small stores -- sell over 400,000 new & used vehicles since launching in 2006.   For many TrueCar Dealers, TrueCar-referred customers represent more than 10% of their sales.
 
TrueCar Helps Dealers Improve Margins:   In most states, TrueCar operates a performance-based billing model, making TrueCar 100% aligned with dealers.   Dealers earn their business every day, and so should their marketing programs.  TrueCar’s dealer fees are well below the average advertising expense per new vehicle retailed per NADA.  TrueCar also helps lower dealership selling costs by providing high-quality customers and no need for haggling.   Finally, TrueCar provides faster inventory turns, helping TrueCar Dealers lower inventory costs.   Put it all together, and the cost savings that TrueCar provides to dealers help them keep their prices low, driving even more volume.    Many TrueCar Dealers have stated that TrueCar is their most effective marketing program.
 
TrueCar Price Reports Data Sources & Quality:   TrueCar Dealers’ DMS data is not being used to populate TrueCar Price Reports.    Rather, TrueCar aggregates data from dozens of credible sources and painstakingly reviews that data to provide the most accurate pricing data in automotive retail.    TrueCar has reviewed its pricing data with numerous dealer groups who have all verified the accuracy of TrueCar pricing data.
 
Dealers Set Their Own Prices, Not TrueCar:    TrueCar provides free transaction-based pricing data to help dealers price their new & used vehicles scientifically.   TrueCar also has a dedicated Pricing Team to monitor and address TrueCar Dealer prices that appear suspiciously low.  Finally, TrueCar doesn’t believe it is all about price – it takes a competitive upfront price to get noticed, with the sale itself won through location, selection, sales and service.
 
Become a TrueCar Dealer:    Click here if your dealership is interested in becoming a TrueCar Dealer.    No set-up fees or long-term contracts and dealers can cancel without penalty at any time.   http://www.truecar.com/dealership/become-certified-dealer
Comment by Stan Sher on November 28, 2011 at 10:05pm

LOL just telling it like it is

Comment by Keith Shetterly on November 28, 2011 at 9:55pm

Stan, I hate it when you hold back like that.  :)

© 2024   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service