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 James A. Ziegler on January 6, 2012 at 6:11pm

Just got a strange call from a California dealer

Comment by James A. Ziegler on January 6, 2012 at 6:07pm

Does anyone in California know if regulators just shut down TrueCar??

Comment by David Blassingame on January 6, 2012 at 5:45pm

Customers don't care but if I were a dealer TC was trying to sign up, it wouldn't be a strong selling point.

Comment by David T. Gould on January 6, 2012 at 5:42pm

Customers are not going to care about dealership sustainability. This type of side stepping around the real issues is how TrueCar is going to try to wiggle their way through legal objections. I continue to admire this forum and those who continue to keep the heat on.

Comment by Keith Shetterly on January 6, 2012 at 4:39pm

Well, I thought TrueCar said this wasn't a "race to the bottom"?  How could that be versus this quote from the AutoNews.com article, considering the warning mentions sales aren't sustainable below cost--why warn the shopper if the bottom can't be reached?  It can.

"In a statement to Automotive News about upcoming changes, TrueCar said that it will warn shoppers in red type on its site when a price is below what it calls dealer cost.  The warning will contain a message that selling cars below dealer cost is not sustainable for dealers."

Comment by Andrew Myers on January 6, 2012 at 4:36pm

Now that that's done we just have to get the states that aren't enlightened by a 5,000 ft view of the situation to see TrueCar as bandits also.

Comment by James A. Ziegler on January 6, 2012 at 4:30pm

Michael Paulson is right I wonder how USAA will feel about TrueCar not being able to provide services to the 6 military bases in Colorado including the Air Force academy. Keep up the good work.

Comment by James A. Ziegler on January 6, 2012 at 4:02pm

Kiss of death Jim. Scott Painter doesn't realize he should stay away from dealers. His condescension and arrogance will make them angrier... at least that's the way I view him and his demeanor. AND they're trying to tell investors everything's cool??? This is a train wreck.

Comment by Keith Shetterly on January 6, 2012 at 4:02pm

Okay.  Was that too much "holdback"?  :)  I think they reap what they sow.

Comment by Keith Shetterly on January 6, 2012 at 4:00pm

Huh.  So as Jim has shared, TrueCar suspended operations in Colorado according to www.automotivenews.com.  I wonder if other vendors need to be looked at, too?  Seems fair to do that.  Dealers take the risk, so be sure you know what's going on with your data--and with your sales process vs. your own state laws.  And federal, for that matter.

I really think this is going to be a great year for car sales!  I hope every vendor takes note of all this brouhaha over TrueCar and realizes that, when their REAL PAYING CUSTOMER is dealers then they need to take care of their customer.  So far, if TrueCar were a dealer and dealers were shoppers, in my opinion--and I may be wrong--TrueCar has exhibited a disdain for their customer perhaps in both action and in fine-print.  It kind of feels, to me, as if they've given some of the dealer body the very same bad experience they tout they're trying to avoid for car shoppers! Anyway, I hope things improve for all.

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