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 Corwin on November 28, 2011 at 10:19am

I think it's the age old follow the leader. Dealer XYZ is doing it so I have to. Some dealers are so focused on the volume they forget that we are in this business to make money. I have always subscribed to the theory that I will not pay you to take a car. But it seems OK to some dealers to sell a unit behind invoice and load up in a bad trade. It seems our industry is being driven by companies other than the manufacturer and us. Companies that claim to have a magic bullet that we have to pay for that adds NO value. Look around these are multi million dollar companies making money on our backs and then making our business in many cases harder. Spend some money making your sales force stronger and get out there and RUN YOUR DEALERSHIP.

Comment by Larry Muirhead on November 28, 2011 at 10:19am

I love the comments from people boasting that it's all about your Product and enthusiasm. Without the right sales person a customer won't buy? OH just stop it..... I wonder how many leads the Internet Divisions of most dealerships get that say... "I'm looking for a great salesman"  "I don't care about price as long as my sales person has enthusiasm."  Working at a Toyota store with 10+ stores in our district all within 60 miles brings new light to the meaning of PRICE. Most of our customer care about one thing... Who's the cheapest in the land.. period. They don't care about you, your family or your gross profit at your store. Make it up on the last guy mentality rules in most cases. I get the point about being friendly and certified on your product, but if we don't get back to saying NO to some of the loser deals, we'll all be in the poor house.

Comment by SCOTT TYNER on November 28, 2011 at 10:18am

You might get even more response if you tag this post under ZAG. Besides don't everybody already know who Jim Ziegler is?

Comment by Keith Shetterly on November 28, 2011 at 10:15am

Bobby, respectfully, I disagree with you.  Negotiation is still a big factor in our business, whether some like it or not.  If our lowest pricing is just going to be "out there", we should know the actual down payment, credit history, and employment of all ups before they come in the door.  That way there is no negotiation, just a sale on the merits of the vehicle for their needs in a fair disclosure by both parties, since they more-or-less know the lowest price.

This is wayyyyy different than adapting to the market and rallying ourselves to a positive sale, building value over objections.

Thanks.

Comment by Jim Kristoff on November 28, 2011 at 9:02am

I agree that the NADA should rally the dealers to propose legislation to stop the madness!!!

Comment by James A. Ziegler on November 28, 2011 at 8:57am

True Car, ZAG, Edmunds  and a few others... they have a thinly disguised agenda to totally eradicate car dealerships. WHY do any dealers allow them access to your DMS when their objective is obviously to put us out of business? Am I wrong?  

Comment by Jim Kristoff on November 28, 2011 at 8:50am

Sometimes you get some interesting feedback from people that are NOT in the Automotive industry!

 

I had a conversation about what "True Car" is and does with a friend of mine that is a businessman but NOT in the automotive industry. His response was perfect!

He asked me why ANY pricing information is available to the general public in regards to automobiles. There seems to be NO OTHER retail industry with "dealer cost" available on the internet.

You can't get "dealer cost" on that TV or sofa or computer.....

 

I agree.....we must "kill the beast"....

Comment by Jerry Thibeau on November 28, 2011 at 8:29am

You buy a baby alligator and feed it for years, then one day it decides to eat you for lunch!  It's not too late to put this beast down.  I am guessing True Car just got a fresh infusion of VC to fuel the advertising that's currently taking place.  It's only a matter of time before every customer is walking in the door with a True Car price sheet.  People love bragging to their friends about the great deal they received. 


If this beast continues to grow, I can see a day where a customer walks in and says to one of your salespeople, "I've got this True Car price sheet and ABC Motors said they would beat it by $100, what will you do?"  Where does it end?  A better scenario is when a customer walks in with a True Car price sheet and the salesperson says, "sorry, but we don't honor those, nor do any of the other dealers in town."  Kill the beast or watch our industry change dramatically for the worse.  This is going to become a game changer if it continues.

Comment by James A. Ziegler on November 28, 2011 at 8:20am

Wow, this one is starting to get widespread participation and it began on a Sunday afternoon. Wait till the entire country wakes up and let's see what is said here.  Great commentary so far, I envision more coming. JIM

Comment by Michael Deville on November 27, 2011 at 10:56pm

Product has nothing to do with the discussion, price W@#$$ that go in your DMS and you pay, and pay to lose big money so that you are a number or two up in the Franchise rankings. "are you kidding". like I said earlier $1500 gross and they came with a loser. "NO" was the word of the day, and no broker fee. They did serve a purpose, sent me a reasonable customer that didn't want to play price wars all day long. They can play in the game, be like APPLE, make profit for your DEALER.

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