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 referencehttp://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 Mark Elliott on November 28, 2011 at 3:06pm

@Michael....AGREED!

Comment by Mark Elliott on November 28, 2011 at 3:05pm

And let's not forget about floor plan,back office comp,sales comp,and the money the manufacture's standard for your facility....Where does that money come from?

Comment by Michael Paulson on November 28, 2011 at 3:03pm

Getting pricing right on all of the cars made would be a daunting task at best.  I wonder what their QC process is like.  Too bad the TrueCar Exec won't show his face here to comment....

Comment by Joe Clementi on November 28, 2011 at 3:01pm

Jim, the net costs not including advertising is $17582.27 minus the Truecar price quote of $17100.00 is a net loser of $482.27.   I'm sure they'll say it's not a "net loser" due to the HTB, and DMA allowance provided below the line.  That's surely going to be the stance they will take. 

Comment by Jim Kristoff on November 28, 2011 at 2:56pm

If a Dealer mis-leads the public...the State AG is all over their butts....BUT...TrueCar can give misleading info and call it "TRUE"??

 

Comment by Joe Clementi 56 seconds ago

Invoice is $17955.37 plus the advertising fee of $171.85 = 18127.22 minus the holdback of 373.10  This is clearly a net loser.  If you don't include the ad fee that we do pay - invoice is 17582.27  True car has is listed for $17100 that you can buy without any "hassle".  Great for adding value huh?

 

Comment by James A. Ziegler on November 28, 2011 at 2:55pm

So Joe, you're saying it is a $580.00 net loser at the TrueCar price? 

Comment by Joe Clementi on November 28, 2011 at 2:54pm

Invoice is $17955.37 plus the advertising fee of $171.85 = 18127.22 minus the holdback of 373.10  This is clearly a net loser.  If you don't include the ad fee that we do pay - invoice is 17582.27  True car has is listed for $17100 that you can buy without any "hassle".  Great for adding value huh?

Comment by Joe Clementi on November 28, 2011 at 2:49pm

Jim here you go: http://www.truecar.com/prices-new/honda/civic-sedan-pricing/2012/7C...

 

Follow that link.  BTW we've been selling this specific car for close to retail.  While it's not a true loss in the actual sense of the word...it is a loser compared to invoice, the cost of $299 per lead and the cost of commissions.  We can look up virtually every product line and find similar pricing.  Clear example.

Comment by Michael Paulson on November 28, 2011 at 2:44pm

just received a private message from an officer of TrueCar and they feel I am being unfair AND they told me their quotes are NOT financial losers. AM I misleading or unfair here? I don't want to be misrepresenting. I invited him to post here. 

There is one way to tell for sure.  Can someone with an invoice in their hands build the car on TrueCar and see if the numbers match?

Comment by Jim Kristoff on November 28, 2011 at 2:41pm

I am getting a comfortable seat and popping some popcorn for this back and forth......

 

Comment by James A. Ziegler 1 minute ago

 

I just received a private message from an officer of TrueCar and they feel I am being unfair AND they told me their quotes are NOT financial losers. AM I misleading or unfair here? I don't want to be misrepresenting. I invited him to post here. 


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