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 Stan Sher on January 2, 2012 at 8:54am
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@Keith LOL
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Comment by Thomas A. Kelly on January 2, 2012 at 8:51am
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I am with you there KS!
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Comment by Keith Shetterly on January 2, 2012 at 8:45am -
@ Thomas - There's only two things I don't like about Scott Painter: His face.
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That is the reference I was thinking of Keith (I am old)...Thank You!
It seems he wants it both ways in my reading.
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Comment by Keith Shetterly on January 2, 2012 at 8:19am
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@ Thomas: I don't know of a video, but there is this article:
http://www.socaltech.com/update_with_zag_s_scott_painter/s-0009760....
Scott Painter: "In many ways, you can think of it as an all those auto information sites out there, coupled with an auto buying/brokerage/sales situation, coupled with actual dealers that fulfill"
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Comment by Jerry Thibeau on January 2, 2012 at 8:09am
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All they could find was an Internet Director who liked the program?
On another note, the TrueCar Scam video I made is now right under the TrueCar places page on Google thanks to a SEO expert in NJ. He's good at achieving page one rank! 8000 views and counting!
KILL THE BEAST!
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Comment by James A. Ziegler on January 2, 2012 at 7:35am
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I am pleased to see the states checking in on these issues. I do not believe anybody would have a problem with TrueCar or any other vendor if they were doing business legally. It's about the liability exposure if you do business with them. That's the warning.
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Hey Jim Thanks for posting that here.
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Comment by Jim Kristoff on January 2, 2012 at 6:49am
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........(part 4)...........
"We work really hard to be compliant, and if they're not compliant, we need to let that play out and see what the regulators decide," Payne said. "That's our biggest concern right now."
TrueCar acknowledged two weeks ago that some dealers have left recently for various reasons. Group 1 said it did not want to open its dealerships' computers. And Honda has warned its dealers that advertising prices below invoice on Internet shopping sites could put at risk the dealers' payments from the factory for local marketing.
In mid-December, TrueCar said it had 5,840 participating franchises and was recruiting more to handle a surge of leads expected from the Yahoo partnership.
Last week, TrueCar said it had clients representing more than 5,200 franchises and dealers representing 227 more franchises that had agreed to become clients. The company also said that since October it has received a record number of inquiries from dealers interested in joining TrueCar.
Class action
Peter Welch, president of the California New Car Dealers Association, says he is worried about regulatory penalties for his TrueCar members. He says dealers using TrueCar also could be swept into any class-action lawsuits that arise in the litigation-heavy state.
Welch said he believes the TrueCar model violates several points of California law, including advertising and licensing requirements. For instance, dealers in California aren't allowed to use invoice comparisons -- saying, for example, that an offered price is below the dealer's invoice -- and such comparisons are prominent on the TrueCar Web site.
"I don't believe the dealers understand that this whole thing is an advertising medium and they have to comply with all the advertising laws," Welch said.
TrueCar said in its statement that it is not an advertising medium.
The California trade association is completing a legal review and will warn dealers about their potential exposure, Welch said. Dealers can lose their licenses over violations, but Welch estimated that 90 percent of violations are settled with fines.
Bird-dog laws
Some dealer associations and regulators say TrueCar's model violates a ban on bird-dog arrangements.
In Virginia, the state Motor Vehicle Dealer Board warned dealers in October 2010 that it was illegal to pay a fee to Zag.com, the former name for some of TrueCar operations, in exchange for a sale.
Dealers were urged to stop the practice or face a $1,000 fine for each violation and possible suspension or revocation of their licenses. Bruce Gould, executive director of the Virginia Motor Vehicle Dealer Board, says TrueCar's practices violate the state's prohibition on bird-dog fees. On Dec. 20, Gould sent a letter to Painter saying the board would discuss the matter at a Jan. 9 meeting.
If the board agrees with his analysis, Gould says he will remind dealers that their payments to TrueCar are not legal.
"We try to take the position of giving everyone a fair warning, to say, 'OK, you're doing something wrong, you've got to stop it,'" Gould said. "If it continues, we'll have to bring out the guns."
Two weeks ago, the Wisconsin Department of Transportation sent TrueCar a letter saying dealers can't legally use the service. Wisconsin law prohibits bird-dogging.
Wisconsin law also requires licensing of persons and companies involved in selling vehicles in the state, and TrueCar doesn't have the proper licensing, according to the letter.
"It has generated a lot of concern among dealers," said Bill Sepic, president of the Wisconsin Automobile & Truck Dealers Association, which has fielded about 20 calls on the issue since early December.
Dealers could be penalized as much as $5,000 for each licensing violation and have their licenses suspended or revoked. But regulators aren't pl
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