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 James A. Ziegler on January 10, 2012 at 8:09pm
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Comment by Jay Prassel on January 10, 2012 at 7:54pm
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You've probably seen this, but just in case.....
http://www.fi-magazine.com/News/Story/2012/01/Virginia-Dealer-Board...
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Stay tuned as another one of the biggest public companies completely drops TrueCar nationwide in the next few days...
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AS PROMISED
Here it is...I was expecting this Another One Bites the Dust...
NEWSJanuary 10, 2012Oklahoma Motor Vehicle Commission Requests That TrueCar/Zag Immediately Suspend Business
At the Oklahoma Motor Vehicle Commission (OMVC) meeting today the Commission discussed the TrueCar and/or Zag business model. According to the TrueCar website, "TrueCar charges all participating dealers the exact same performance-based service fee." Similarly, Zag's website states, "Zag only charges when a sale is transacted." Receiving a fee from a dealer for a completed sale of a vehicle arranged through the TrueCar or Zag website appears to violate Oklahoma Statute 47 O.S. Section 579.1, which prohibits brokering.
In addition to brokering, the Commission was concerned with several possible OMVC Advertising Rule violations, which include:
- OAC 465:15-3-14(7) "The terms 'dealer's cost', 'invoice', 'invoice price', or other reference to the cost of the vehicle to the dealer shall not be used."
- OAC 465:15-3-2(a) requires a stock number or disclosure of the number of vehicle available at the advertised price; and, requires that the vehicle be in possession of the dealer at the time the ad is placed, or may be obtained from the manufacturer or some other source, and this information is disclosed in the advertisement.
- OAC 465:15-3-4 "Any advertisement of a 'Bait' or 'Bait and Switch' nature is prohibited." TrueCar's website acknowledges that, "At times, however, your selected color, options, or incentives will not be available at a dealership." This situation could lead to allegations of "bait and switch".
BEWARE: Oklahoma dealers are subject to regulatory enforcement action by the Commission; and, if found to be in violation of OMVC laws or rules could result in fines up to $1000 per occurrence and/or suspension or revocation of license.
In the letter going out today, the Commission requests that TrueCar/Zag immedi
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Comment by Heather Graham on January 10, 2012 at 1:58pm
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waiting on the edge of my seat Jim! lol
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The first dealership that gets prosecuted by the state or litigated against by a consumer because of TrueCar.... I will feel badly for you BUT you can't say you weren't warned.
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Another major state about to check in... this will rock you...stay tuned
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THE DATA-MINERS ARE STEALING 100% OF YOUR DEALERSHIP'S BLUE SKY RIGHT OUT OF YOUR OWN COMPUTERS
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Comment by David T. Gould on January 10, 2012 at 10:30am
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Thanks Jim,
My initial concerns about dealers being held accountable (fined) for TrueCar's flagrant abuse of consumer data, advertising laws and brokering status were quelled considerably yesterday by Virginia DMV making punishments post their decision.
Dealers who continue on TrueCar at this point are part of the problem. I will lose no sleep over their greed / ignorance.
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