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 Keith Shetterly on January 11, 2012 at 3:47pm

Yep, hope the joke is gotten!  Thanks

Comment by Arnold Tijerina on January 11, 2012 at 3:43pm

@Keith that's pretty funny right there

Comment by Keith Shetterly on January 11, 2012 at 3:40pm

Hmmm.  Somebody just privately registered ****edbytruecar.com, .net, .org.  

Comment by Arnold Tijerina on January 11, 2012 at 3:26pm

@Keith Im not proposing that as a solution (the 1099). Just thought it was an interesting idea to throw out there and get feedback on.

Comment by Arnold Tijerina on January 11, 2012 at 3:24pm

Seems the president of TrueCar commented on my blog post from today re: those domains [LINK]

Comment by James A. Ziegler on January 11, 2012 at 3:22pm

I am told the Rick Henrick Dealerships just gave TrueCar the boot, that's the big group I have been anticipating yesterday.  Pleased to see Hendrick showing the high road of great ethics. I have personally bought seven cars from them . 

Comment by Keith Shetterly on January 11, 2012 at 3:22pm

It's just not smart to do business with people who can get that much money together but pay no attention to the laws and the risks they introduced to dealers except to attempt to exempt themselves and pass that liability on to dealers.  I don't want to speculate on lawsuits, but the broker's license they already had in CA appears to clearly be an attempt to CYA in that state--in which state they've been ruled last week that yes, they are a broker no matter what else they've said.  Risk to dealers is not mitigated by some change to their model--which may well be ruled to still be brokering, no matter what.  I don't suppose TrueCar is willing to step up and assume liability for all past and future litigation/fine issues for dealers having used and/or currenly using their product and associated products?

I doubt it.  That's my opinion, though I might be wrong.  Any dealer taking the "1099" advice better talk to their lawyer first.  I personally wouldn't want to be going around suggesting that as some blanket solution for some cases, whether I had a law degree or not.

Comment by Michael Paulson on January 11, 2012 at 3:19pm

@James A. Ziegler: So the state won't prosecute the dealers (rightly so).  The point of the class action suite is to have a federal judge hand down a cease and desist order based on numerous state violations, bad business practices, etc.  This would kill the beast.  In the absense of the cease and desist order, the next goal is to put all of the dealers currently on TrueCar on notice that they may be part of the class and may have significant legal problems.  This will cause a further drop in the dealer count.  The last goal is to suck out current money and prevent future money from feeding the beast.  F'd by the dealer indeed!

Comment by James A. Ziegler on January 11, 2012 at 3:13pm

Va. said they will not prosecute past offenses BUT will vigorously investigate and pursue future business. Any dealer who does business with TrueCar gets what they deserve in that state, they have been warned.

Comment by Michael Paulson on January 11, 2012 at 3:09pm

How about a class action suit for dealers to recoup money spent and get damages for TrueCar putting them in harms way? This would have an arctic effect on any new investment dollars and may just suck up what is left of the $200M. Get a contingency lawyer on it so it doesn't cost the dealers anything. Hmmmm.....The best part is that TrueCar would have to share its customer list.  All of its customers would get a letter.   Wow!

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