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...
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
Thanks for comments Keith & Jim!
Keith - the possible exposure is amazing.
Jim - waiting on edge of seat again! Thanks for posting all the breaking news regarding this!
@ Heather: The dealers who have done business with Zag and/or Truecar in these states, especially but not limited to VA, are exposed to litigation for the sales that HAVE happened ALREADY. The agreements in question appear to clearly pass liability to the dealers for all that. Fines as well as litigation are possible for the past, no matter if any new model was ruled to pass muster legally.
Really, who wants to do business with a company, or its associated "tentacles" as has been said, when they failed the basics of getting $200million together and marrying it to a model without checking with the state laws? It's not like these laws were just written . . .
I have some exciting news Heather concerning the investors and the potential investors BUT I need to keep a lid on it for the time being. Will expand on it soon, you'll like it. JIM
Pete, even if they CHANGE to a subscription model as they just sent a press release to that fact in regards to Virginia [LINK], that doesn't change the fact that up until this point, according to the state, they were operating as a broker, in which case, any fees paid to TrueCar prior to this billing model change would be subject to the same tax reporting as any other broker. If, in your state, that means you send out a 1099 (as it should), then that would apply to TrueCar as well. I agree with you.
Eric - I too have been wondering if dealers could recoup expenses. Based on how Zag represented themselves and their services and based on how they represented the data they would pull. In addition, perhaps on the basis of whether Zag put the dealers at risk for litigation - from the manufacturer, dealer associations, states.
Any recent scoop on Yahoo or the 'investors'?
Jim and Arnold- I think that dealers are legally required to send Truecar a 1099 for comissions paid. As brokers, the fee is now considered a comission on a sale... I'm not a lawyer but that's just my take on it.
The quality of the players at TrueCar & Company is really disgusting to me. When they should be the sharpest and most vigilant going forward, they in fact stoop to a new low. They are THAT vulgar, they just can't help themselves. When it is over they and others look back, it will be remembered that they were their own worst enemy....not the dealer.
Jim, the fees weren't "extorted". Dealers agreed to them when they signed up. That being said, they may have been illegal, in which case a dealer may have cause to seek reimbursement. I'd still send them 1099's at the very least.
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Eric, thank you for your comment about where this blog shows up in the searches. Great point; I just updated some of the search terms, so hopefully it will have a small impact in the coming days. Also, PAA put a little something out to their dealers about TrueCar and the whole broker thing going on the other day... just sayin'
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