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 December 19, 2011 at 12:47pm -
Damn straight, Larry.
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Comment by Larry Bruce on December 19, 2011 at 12:42pm
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Keith you're absolutely right. As a dealer I would seriously cut off any vendor not willing to sign my data sharing and privacy addendum to their agreement that supersedes all data agreements in the original contract and I would want to lock down my DMS from any access that I didn't personally initiate. PLUS I would have language in every buyers order / document that went to any lender or insurance institution stating that the data contained was not to be used for any other purpose than to obtain financing or insurance for he car.
That stops all this non-sense with TrueCar.
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Comment by Keith Shetterly on December 19, 2011 at 12:32pm
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@ Larry, the sales data starts with the SALE AT THE DEALER, and I take the same position that it IS the dealer's sales data, no matter what, that is repurposed against the dealer on TrueCar.com. And elsewhere, for that matter.
However, "in the end" you don't seem to be legally correct in the broad sense. Trigger leads are a good example of data that originates with a credit pull at the dealer--agreements, disclaimers, etc., or not, the laws for credit bureaus actually allow the specific targeting of people seeking credit IF they are given a "firm offer of credit". Just one example.
SO, the process you note is needed to protect the dealer. EVERY dealer in the USA needs to scrub the access of their DMS *and* remove language in agreements that allow the repurposing of the data in any fashion. Take a look at your DealerTrack agreement to see what a dealer is allowing on the SUBMITTED transaction data--I wonder what that says? And that doesn't actually require involvement by the DMS.
It's wayyyyy bigger. And not as simple as you state, legally. The interesting thing there is not just what WE in the business might've missed, but what did TRUECAR miss? Take a look at those states jumping in . . .
In the end, I do 100% agree and promote this stance: The Dealer sold the cars, and so the data of those sales, whether legally obtained without the Dealer's direct okay or not, is being repurposed ALL OVER THE PLACE. And most importantly being repurposed in several cases AGAINST the Dealer!
I put it this way to a dealer in Texas: If I loaned my hunting rifle to someone under a written agreement that states that they can use it to possibly shoot at ME, I might want to read the fine print and rethink that agreement. And that relationship.
"The large print giveth, and the fine print taketh away."
Thanks!
Keith
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Comment by Larry Bruce on December 19, 2011 at 12:18pm
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Jim Reynolds has been talking and warning about this for years, but dealers and vendors alike have bashed them for it. Ultimately its the dealers responsibility to protect the data and make sure the dealerships rights and the uses of that data are in compliance with the dealerships privacy policy.
There is no doubt that a dealer driven process needs to be in place for this. In the end there are only 2 people that can authorize the use of this data:
1. The Customer
2. The Dealer
No matter who you go through to try and whitewash this data it originates with the dealer and the customer.
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Comment by James A. Ziegler on December 19, 2011 at 12:08pm
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Last night I was text messaging back and forth with the President of one of the Big Four Manufacturers and he assured me they were taking some action soon...this is going to be huge.
Now the question is whether or not Reynolds and Reynolds and ADP have any liability for data drain? I am sure they are concerned as the keeper of the data. I know Mr. Brockman has expressed concerns in the past.
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Comment by Larry Bruce on December 19, 2011 at 12:06pm
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The first AutoMazing podcast was recorded last week with myself, Tracy Myers, Eric Miltsch, Rob Campbell, Bryan Armstong, Shaun Raines and Andy Wright. The TrueCar Topic dominated the entire conversation. Listen here if you like
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Comment by Keith Shetterly on December 19, 2011 at 12:04pm
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Isn't California the "Renowned Home of the Class Action Lawsuit"?
TrueCar is in the interesting position of NOT being able to push back through their consumer channel on any of this, because what would be the reaction of dealers to TrueCar bashing dealers?
If TC had gotten out in front of this instead with a dealer-centric approach that helped modernize dealers rather than the back-slapping, smiling, condescending, "smarter than everyone", "cataclysm is good for growth", dealer-hurting approach AND plan (TrueFinance, etc.) . . . well, welcome to the World of Social Media, TrueCar. Gee, just HOW did all you eggheads miss the OBVIOUS like this?
Just my opinion.
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Comment by Larry Bruce on December 19, 2011 at 11:55am
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Jim I just said the same thing this morning, I would have thought California would be the first to act. Then again TrueCar is in California and they need the tax revenue!
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Watch for other states to follow suit, possibly Maryland and Louisiana real soon... can't figure out what is keeping California from acting?
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Comment by Jim Kristoff on December 19, 2011 at 11:35am
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It doesn’t seem like TrueCar is going to have such a Merry Christmas this year.
Since Jeff wrote about TrueCar and some of their tatics back in June –Edmunds TMV vs TrueCar – Dealers, wake up! , others are helping to bring this situation to the fore front. It’s great to see our industry come together and express our concerns and opinions around this TrueCar debacle. I can’t recall another time where dealers and industry goo-roos have reached and leverage so many channels of online news and social to not only express their opinions but also help amplify the message.
The automotive industry has been energized and polarized surrounding the TrueCar business model. Since dealers are for and against the model, it is very important to follow the legal implications of the TrueCar process.
As promised, I told you that various State regulators and Dealer Associations were drafting letters to their constituents and members warning of potential legal concerns.
The Colorado Department of Revenue issued this letter on December 15, 2011 and I expect more similar letters to follow. The TrueCar discussion is now moving into a legal discussion with dealers facing potential fines for participating on a model that regulators may deem as violating State laws.
Take a peek at this letter and share your thoughts. I’ll have a few more letters to share in the coming weeks as they are drafted and published.
For a larger version of the letter view it on the Colorado Government site.
Addition by Jeff Kershner…
Another TrueCar UPDATE: Group 1, the nation’s fourth-largest auto retailer, last week ordered all participating stores to cut ties with TrueCar.com – Click here to read the article. I had heard about this last friday and sent out a tweet that received several responses (follow@dealerrefresh on twitter). This apparently was brought to light during a meeting with their local Honda Representatives.
About the Author
Brian Pasch is the CEO of the PCG Digital Marketing and an active writer for the automotive community. You can also reach Brian at 732-450-8200 or by visiting hisAutomotive SEO website.
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