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...
- 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".
- 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.
- 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. - 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.
- AMEX, USAA and all of their affiliates do not want the bad consumer relations this push back is creating with their members and customers.
- 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.
- 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"
- Keep calling your National and State Dealer Associations demanding they get involved and stay involved... No excuses.
- 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.
- 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
Comment
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Comment by David T. Gould on February 12, 2012 at 8:14pm
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@Christian, they had a 90 day clause in our TrueCar contract that was cancelled.
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Comment by Christian Serbes on February 12, 2012 at 8:13pm
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@ David ...on jan 26 I cancelled the program and immediately pulled the feed from Reynolds to true car...but i received an invoice from them on a previous customer who bought on feb 2. The customer happened to submit a lead through true car on jan 14..how did they get the VIN# of the purchased vehicle? They have to have secindary source other than my DMS. I'm still trying to figure out.
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@ Thomas Kelly.....thank you for doing the research. I knew that class would come in handy one day Marietta College. I'm in a competitive market where some dealers are quoting 1500 BELOW invoice befor rebates within the true car program...they rely on the true car disclaimer " plus dealer installed options".that really a "true" price to make it easy for people to do research and purchase a vehicle or another outlet for them to distrust car dealers...is it really as simple as just put the lowest price and customers will goto the dealer because of their "price guarantee" from true car. How do you combat that?
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Comment by Christopher Charles on February 12, 2012 at 7:55pm
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Sounds like the entire Dealer DATA industry is in need of a spotlight.
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Comment by Keith Shetterly on February 12, 2012 at 7:52pm -
@ David: I think TrueCar buys from anyone who sells the data. It would be direct to take a look at the DMS agreements for the top six DMS providers . . .
And the inventory tool providers should be looked at . . . oh, that's DealerTrack, too. Not the only one, perhaps.
I think the best way is, rather than float possibilities, to look directly at those agreements.
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Comment by Thomas A. Kelly on February 12, 2012 at 7:52pm
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@ Christian, I am not an attorney, but in my reading of some of the FTC and DOJ laws it is unlawful to attempt to influence prices up or down. TC and Zag if in fact they have tried to get dealers to change prices (and I believe they have) in my unqualified opinion, would be breaking the law....there need not be cooperation by any dealer for it to be illegal.
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Coca Cola has its special formula, KFC has their special formula... what data providers make up TrueCar's Car Pricing special formula?
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Recently cancelled zag...in reference to Tom kellys comment on zag reps calling dealers with recommendations to lower prices to meet other dealers quotes....I'm pretty sure that is Collusion....and an unlawful practice....but I will have to check my " industrial economics" textbook to confirm. The entire true-car program in an unnatural tendency.
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The state may not be real time enough as you say David but again, Michigan requires every element of each transaction including price submitted to them....and Michigan sells data.....if or if not the data they sell has selling price included, I do not know but I can assure you they collect the selling price of every vehicle along with the buyers identity.
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Comment by Keith Shetterly on February 12, 2012 at 7:13pm
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@ David: DealerTrack. Which is a big investor in TC.
As well, some DMS providers sell the "anonymized" data.
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