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 Keith Shetterly on January 5, 2012 at 3:40pm -
If you want to listen live to the Virginia meeting on Monday, they will post a live link to the meeting on Monday morning on their home page http://mvdb.vipnet.org/index.htm (you can see such a link there from their November meeting). Can someone arrange to record it? I won't be in position to do so.
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Comment by DealerELITE on January 5, 2012 at 3:21pm
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25,361 views The World Record for views on any Blog on a Automotive Social Site. Record Keeps growing
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Comment by James A. Ziegler on January 5, 2012 at 3:18pm
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Uh-Oh Here's Another One...
Dealers Encouraged To View Motor Vehicle Dealer Board Meeting Via Web
We have been contacted by dealers asking whether they can attend the Motor Vehicle Dealer Board Monday (1/9/12). While the meeting is open to the public, we encourage dealers to view the meeting on the internet and NOT to attend in person for several reasons:- Seating is VERY limited in the meeting room
- There is no way to know when the topic of brokering will come up in the meeting
- Scott Painter will not be at the meeting (attorneys for TrueCar may be in attendance)
- Discussion will NOT be specific to TrueCar; the topic is brokering
- The discussion will be centered on the law and regulations as they apply to DEALERS and the Dealer Board's position regarding Dealer responsiblity; the Motor Vehicle Dealer Board does not regulate TrueCar or similar entities
- VADA will be on-hand to represent our dealer members
While we understand the keen interest you have in this topic, we encourage you to watch the discussions via the live web feed (below) and not to attend in person.
Team VADAGreetings! 
Dealer Board To Address BrokeringGood morning. The Motor Vehicle Dealer Board will meet Monday, January 9th, and one of the key topics of discussion will be brokering/bird dogging. TrueCar has been invited to the meeting to address the Board's Advertising Committee regarding their pricing model.The meeting will be available live on the web using the links below. If this issue is of interest to you, we would encourage you to consider watching it.The Board Meeting begins at 9 a.m. with the Dealer Practices Committee Meeting. This will be followed by the Licensing Committee and then the Advertising Committee which will hear the brokering issue.We anticipate this will begin sometime between 9:30 and 10 a.m., however we cannot guarantee; the issue could be heard at anytime depending on the amount of bu
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In the DealerElite survey Of the members who voted, nearly 57% said they have lost interest in TrueCar/ZAG or will cancel their accounts. Only 9% said they would still sign up with them.
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Here's Maryland checking in...
To: All Maryland Dealers
From: Peter Kitzmiller
Re: TrueCar/Zag
Date: January 4, 2012
It is the opinion of MADA that any vehicle referral program which requires a dealer to pay a fee only upon the sale of a vehicle violates Maryland's dealer licensing law. It is MADA's understanding that this is TrueCar/Zag's pricing structure.
Maryland licensing law is very clear.
In order to be a licensed dealer you must have a physical location and to be a new car dealer you must have an unexpired franchise agreement for the vehicles you are selling.
Maryland law further states that you may not sell vehicles unless you are a licensed salesperson and in order to get a license, a salesperson must be employed by a licensed Maryland dealer.
Section 15-314(d) states that a dealer or an agent or an employee of a dealer may not do any vehicle sales business with or through any person who is required to be licensed under this title if he knows that the person is not licensed.
These statutes have been upheld in court - Detroit Automotive Purchasing Service vs.Lee.
Numerous attorney general opinions have stated that car buying/referral services are unauthorized to the extent that they receive or expect to receive a commission or other compensation for their referrals.
MADA met with TrueCar/Zag officials at the June convention in Williamsburg and outlined our concerns that this payment method (dealer pays vendor only upon sale of vehicle) would be considered a commission paid to an unlicensed person for the sale of a vehicle which would put Maryland dealers in violation of the licensing law. We were told by TrueCar/Zag that changes were being made to the program; however, we are not aware of any changes as of this date.
MADA recently met with MVA and we expect a bulletin from them in the near future confirming long standing case law and attorney generals' opinions.
In conclusion MADA believes that any program in which the dealer pays on a per vehicle sales basis for a referral violates Maryland licensing law and would subject Maryland dealers to fines by MVA.
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Comment by Andrew Myers on January 5, 2012 at 2:34pm
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I think a lot of people in the internet marketplace percieve the Auto camp to be the bully in the yard. It is easy to see TrueCar as the one taking on the bullys. Right up unitl the point where you realize the amount they are charging the dealers for this transaction. The same dealer's that customers STILL have to deal with. Adding front ended costs to the car you are buying is NEVER the way to get the best deal - So who is True Car really bullying? The car lots?, or the untrusting segment of customers they pander to?
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New Mexico checking in
ALL MEMBER DEALERS
I have had dealers share with me the publication by TRUE CAR – explaining the efforts by TRUE CAR to maintain and properly use consumer information. I am not necessarily concerned with what TRUE CAR puts in place to keep themselves compliant. That is their issue. What I do want to caution our member dealers about is the DEALERS RESPONSIBILITIES under the privacy laws.
· Are you compliant with YOUR requirements when you share consumer information with a third party that is not a finance resource ?
· Are you properly disclosing and documenting with your customer that you may share a portion of their information with a third party ?
These are only questions at this point but you as a dealer may want to consider these points and others when opening your DMS to any third party.
This situation is most likely going to be settled at the National level and not on a state by state basis. In the mean time you should use caution in the use of consumer information.
Also, I am not aware of any contact TRUE CAR has made with any authorities in the State of New Mexico and there has been no contact between the NMADA and TRUE CAR.
Thank you,
Charles Henson
President
NMADA
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Comment by Mike Warwick on January 5, 2012 at 2:00pm
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THE AMERICAN CAR SALESMAN
by Larry Bruce
The American car salesman is both hated and revered.
He is the last of a rare breed – the ultimate maverick.
He walks with confidence and takes offense at direction.
He cannot be left on his own, yet his spirit will not be dominated.
He is free enterprise personified.
The American automobile salesman laughs in the face of affirmative action. He is one of the few workers in society who is paid exactly what he is worth.
While the average person views an hourly wage as security, he disdains it as unnecessary limit on his ability to produce.
He hears negative responses every day, but has never learned the meaning of defeat.
He believes free enterprise was created with him in mind.
He has the instinct of the hunter, coupled with great compassion and kindness.
He speaks eloquently and detects the most innocent untruth from his customers.
He would never bow his knee to any king or queen, but has the uncanny ability to treat his customers like royalty.
He is uniquely talented, endowed with savvy that cannot be taught in a classroom.
His spirit is what America was built on.
He is a loner who has difficulty walking in step with others, yet he gravitates towards those who are like him.
He is intensely competitive, nevertheless quick to give a helping hand to a struggling brother.
He is a dealer’s biggest liability, yet he is that same merchant’s greatest asset.
Some elements of society would like to eliminate him, but have found him to be indestructible.
Without his personality, his smile, his spirit, there would be a giant void in America.
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It's not just us...they seem to give me the impression they think all car people are 'stoopid' and should be replaced by a superior species.
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Comment by Jim Kristoff on January 5, 2012 at 1:09pm
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(using my best Forrest Gump voice)....
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"my Momma always told me that the best con men are the best talkers....cause they HAVE to be!"
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