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 Michael Deville on November 28, 2011 at 12:37pm

Cars cost more than most Rolexs sold, Sears is not publishing their cost, yet ZAG and others get ours. This is like where do elephants go to die; who gives this info out. HELLO, WE DO. These businesses would not be around if we did not feed them. So talk all we want, some where even after reading all this, some franchise owner or GM, will sign on to this plan.

Comment by James A. Ziegler on November 28, 2011 at 12:26pm

If a Rolex Dealer showed you their invoice they'd lose their franchise.... 

Comment by Mike theCarGuy Correra on November 28, 2011 at 12:25pm

This is really starting to have the feel of a 'Movement' here! Am I reading the beginings of "Occupy ZAG"??

Fantastic discussion from many folks I have so much respect for already and many news ones I look forward to sharing more with and learning from in the future! Many Thanks to the Alpha Dog for starting a much needed dialogue! Its Cyber Monday and we did a huge email only special that has my showroom full, of non ZAG customers, so I must get to making deals. I hope everyone has a great car selling day and I cant wait to sit down tonight and read more of your great comments! J

Comment by Michael Deville on November 28, 2011 at 12:25pm

HAVE YOU EVER SEEN THE INVOICE ON A SEARS WASHER? JUST A QUESTION.

Comment by Larry Muirhead on November 28, 2011 at 12:19pm

 

GREAT post Mr. Keith Shetterly.

I always wondered why it was that no matter what dealership I worked at, the other dealer are so much cheaper.
It's gota be me.  I must just be the Dinosaur that won't get stuck in the tar and croak. Silly me trying to hang on to
the idea that other stores want to make mone just as much as where I work.

Comment by Joe Clementi on November 28, 2011 at 12:15pm

@Pat - AMEN!  You nailed it...here today and gone tomorrow.  The only way to draw attention to this issue is to bring it National attention. NADA needs to speak up on this issue.  If it's up to TC- customers won't need salespeople, sales managers or financing opitions. Every dealer needs to read the article for themselves!  We're talking about making the car buying process like purchasing a commodity!

@Bobby - We've had Costco buying program for ten years.  It is different BUT don't kid yourself! They've been telling me for several years to post my prices (dictated by them!) on the cars at the warehouses.  No reason for a customer to ever visit my dealership.  Simply take my Costco price and bring it to the nearest competitor.  I've told them for years- don't forget we pay you not the other way around.  We're paying for the lead not to be the cheapest dealer in town.  They don't care about the dealer they only want the lowest price for their respecitve customer. 

Comment by Keith Shetterly on November 28, 2011 at 12:13pm

@ James Carroll - I think Michael Correra's post deserves a highlight again:  Michael Correra:  The argument about sales process, selling value and how some of us are even boasting of our superior sales ability and arent affraid of those nasty ZAG prices is all off topic. Before we even have the chance to demonstrate our incredible sales prowess many customers see prices online at sites like TrueCar, Edmunds, CarsDirect etc etc etc. The huge problem with ZAG is non disclosure to the customer. They dont share that the prices they display arent always due to the ZAG pricing program, they may be reflecting a huge fleet deal that has nothing to do with a consumer purchase and uses incentives possibly not even available to consumers. As with many special incentives, there may be restrictions to its availability but ZAG takes none of that into consideration, they simply pull your data and display it for the world to see. They also dont EVER inform the consumer that ZAG will make $299 from the purchase of the vehicle, most states have some laws regarding head hunter or 'bird dog fees' and at least one state HAS gone after ZAG for violating their bird dog laws. If transparency is really what TrueCar is promoting, why not give a more detailed explanation to the consumers they are intentionaly manipulating? They have made millions by playing both sides and continue to grow as they add more recognized brands to their stable and increase their negotiating power. We can all argue how the salesman ship is nearly a lost art form, how to better seel the value of our products blah blah blah, the issue in THIS post is how ZAG has driven pricing down to the absurd in many markets and what can be done about it. ZAG is truly a Hindu God with many faces, selling their huge customer base and potential sales volume to dealer eager to find business while enticing consumers with the lure of 'real pricing' and pandering to the fears of consumers about car dealers and validating the idea that 'those car dealers are all scumbags, but you can trust US'....

Comment by James Carroll on November 28, 2011 at 12:10pm

@Michael Correra great post and point of view.  Let's not for get about all the advertising dollars they generate on the site as well.

Comment by Keith Shetterly on November 28, 2011 at 12:09pm

Chad's link and then "crickets"?  Hmmmmm.

http://www.prnewswire.com/news-releases/truecar-inc-announces-clear...

Comment by Pat Hayes on November 28, 2011 at 11:55am

Greatest fear of all - huge article that gets alot of people's attention. Two weeks from now everyone will forget and TC is still there collecting your future paychecks.

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