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 3, 2012 at 2:52pm
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If anyone has a GM lead that is also tagged TrueCar please get it to me...JIM
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Sadly, I have information I believe to be reliable that General Motors is buying leads from TrueCar
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Comment by David T. Gould on January 2, 2012 at 7:44pm
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This is the first dealer "protection statement" (my wording) of any kind that I have seen from TrueCar... they must be hurting bad to buckle on their stance of dealers being solely responsible for their behavior / contracts. I am not surprised by this... It looks like a continuation of TrueCar's stalling their demise long enough to reach the IPO to cash in.
From Jay's automotive news TrueCar's responses;
On Dec. 29, TrueCar added this statement:
TrueCar is committed to operating our service in compliance with state and federal laws. Throughout our history we have worked with state regulators and where issues were raised, constructively found solutions to those concerns. TrueCar continues to work directly with regulators to ensure that at no time will our dealer partners be in violation of any laws by participating on the TrueCar network. In fact we're in the process of making meaningful changes to the service, which will be completed by the end of January 2012, in order to address specific concerns raised by regulators. In the meantime, no fines or penalties have been levied against TrueCar or any of our dealer partners as a result of these inquiries, there has been no mandated prohibition of TrueCar services in any state and there have been no lawsuits filed against TrueCar. We remain committed to regulatory compliance, transparency and the success of our dealer partners and consumers.
Read more: http://www.autonews.com/article/20120102/RETAIL07/111239992#ixzz1iL...
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Comment by Stick Bogart on January 2, 2012 at 7:00pm -
Comment by Stick Bogart1 second ago Delete Comment
You guys and gals are doing a GREAT job exposing truecar Automotive news has been writing about it also, I think they are staying on top of all of your work exposing this topic, GREAT JOB keep it up HARD and HEAVY.. remember GO DEEP it feels better LOL
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This is an email from man who is a second generation dealer and a great friend of mine for 20 years... If TrueCar gets their way, this is the fate most dealers will suffer, at least that's my perception of probability.
Name Withheld:
A Virginia Dealer Principal writes...
This hurts my pride to say, but I'd like to tell you bluntly. Feel free to send to all your dealer friends.
For 10 years in a row, my Buick-GMC store has been GREAT. Top CSI, decent grosses, great reputation. Many of my managers and staff have been here 10 years. We always did business honestly, hence our repeat business is very high, and carried us thru the dark days of 2008 and 2009.
My staff was happy. Not wealthy, but making a good living. Ordering "Outback" for dinner at night, paying their rents and living expenses....it was a pleasure to come to work.
2 years ago we signed up for TrueCar and initially, we LOVED the few extra deals. TrueCar also became the "gatekeeper" for USAA customers so in my heavy military-area, we needed access to those customers.
Today, WE ARE ON OUR KNEES. It's New Year's Eve right now and usually, we high-five each other, exchange hugs, and pats on the back on a good year. But tonite, we're dejected. Our grosses were KILLED via True-Car. We've TOTALLY stopped selling value and service. Most of my best salesmen have had to take pay advances from me just to provide Christmas for their families.
We were a prosperous business, and due to TrueCar, we are DESTROYED now and have to rebuild.
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Comment by Andrew Myers on January 2, 2012 at 2:53pm
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If dealers don't go where the customers ARE, and build value THERE - Every internet price seller will eventully band together or get bought up in this thing against us - because it will be profitable for them! Customers have never been afraid of paying for what they want, but they have always needed a reason to do so. If dealers continue to fail to build real value in their store and their methods online, there will ALWAYS be someone online sucessfully selling price alone.
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Comment by Keith Shetterly on January 2, 2012 at 2:33pm
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I think it was Mike Warwick who I read that mentioned Vehix and TrueCar. Hmmm. Look at this--I guess they've got some kind of agreement with Vehix now, too?
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TrueCar employees have been telling people this will all die down after the holidays.
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My question is how in the hell did an established firm like GRP Partners back this guy with all of these amateurish oversights and double talk- every time he gets in front of a camera or microphone he's a liability. Did nobody do any due diligence? Everybody associated is looking rather stupid in my way of thinking.
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@ Larry, thank you for putting some specifics to the data issue. I appreciate your diving deeper into this area and hope others will do the same to determine how data security and procurement are effected in their states. Ultimately I agree with Keith that a dealerships will be considered financial institutions as we have to have banking licenses to operate finance departments. Keep the heat on. dtg
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