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 Michael Paulson on January 8, 2012 at 11:02am
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“We collect information from consumer reports, insurers, lenders, government records and other industry sources in addition to what the 5,400 US dealers provide so we can decipher the true cost of a new car,” said Painter, whose company just became Yahoo!’s exclusive partner for car shoppers in 2012.
Is it me, or did he just admit that TrueCar uses DMS data to determine their pricing models? Investors must cringe whenever he opens his pie h***!
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Comment by Thomas A. Kelly on January 8, 2012 at 10:44am
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@ Eric:
@ Eric, From The New York Post article you just kindly sent us a link to....I don't recall the Honda thing coming down or ending this way?????
"One of them, Honda, which has over 300 dealerships nationwide registered with the TrueCar program, gave Painter a brief scare recently as several reports surfaced claiming they were “very unhappy” and “ready to fight” Painter over his ticket prices.
But a Honda spokesperson laughed them off, saying, “There is no fight — no issues at all.”
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Comment by Larry Bruce on January 8, 2012 at 10:42am -
Could they extend A plan, GM employee etc to TureCar affinity partners? Yes. Would that solve the problem? No. The reason why TrueCar appeals to the affinity partners TrueCar has is that it is an easy neat benefit in a box.
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The draw of a service like TrueCar is that it covers all brands. The affinity groups don't have any administration. It would be much more difficult and costly for them if they had to communicate with each brand individually.
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Comment by Larry Bruce on January 8, 2012 at 10:06am
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@Eric
The reason the OEM's won't and cant do this is, like us the car dealers they can't agree either and the affinity partners want choice for their members so all would have to be represented.
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@Eric Damiani: I agree completely that the tireless efforts of those involved here deserve recognition! This kind of campaign can take significant time. I get back to the point that we are asking big users like USAA, AAA, AMEX, Yahoo! etc, to drop TrueCar like a hot rock, but before they can do that, they need an alternative. The logical choice would be Edmunds, but they are just as bad if not worse at the DMS scraping game. They come right out and say that the information is used in their pricing models. If we want to ride into town and save the day for the big users, we need to hand them a fallback buying service. It's a lot easier to stand up and say "this sucks" than it is to offer a real solution. Any ideas?
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I LIKE THIS!
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Comment by Keith Shetterly on January 7, 2012 at 8:28pm
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1.) Are you willing to back TrueCar with USAA's very valuable and unique reputation? Truecar is a company that appears to have missed obvious issues with state laws to do with vehicle sales AND is led by a guy who may have made the SAME error before. Isn't somebody paid money somewhere to be the legal "experts" that their investment group apparently claims okayed all this?
2) Why don't you launch your own affiliate program for vehicle purchases so that you can return to that type of great relationship with both your buyers and the dealers? Why are you risking all that and your reputation so that you can possibly see an ROI somehow from a company that doesn't seem to be able to get their act together, even when the investment group is led by a lawyer who hires "experts" in the law that he seems to have said take care of that for him?
3) Take a listen to Jim Ziegler, please. He'll cover all this and more if you let him.
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Painter's past riddled with controversy.
From The Los Angeles Times:
"Painter claimed in an interview and on his resume that he sold InfoAccess to Los Angeles-based Vehicle Information Network, which hired Painter for its now-defunct 1-800-Car-Search service. Painter valued the transaction at $450,000. The co-founders of Vehicle Information Network, whom Painter later sued, say the sale never happened.
"We never bought his company. We never bought his contracts," said co-founder Mark Brenner, noting VIN never operated in the Bay Area.
Said co-founder Joel Hecht of Painter's claim: "It is an absolute fabrication."
Link to article: http://articles.latimes.com/2001/jan/14/business/fi-12141
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From the LA Times article, referring to previous Painter debacles: (sound familiar?)
"The duo wrongly assumed that their "knowledge and experience" would overcome investor skittishness, said Painter's partner, Robert Buce.
The market changed harder and faster than we believed," said Buce, a former KPMG partner who previously consulted at CarsDirect. "There were a lot of questions as to whether it was a sustainable model." (TK's note: it wasn't)
Similar questions are being asked about CarsDirect, which purchases vehicles from dealers and sells them to consumers--an arrangement with built-in disadvantages. The company offers low prices, but it cannot underprice an aggressive dealer without losing money on the transaction."
Link to article: http://articles.latimes.com/2001/jan/14/business/fi-12141
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