Edmunds TMV vs TrueCar – Dealers, wake up!

I wish consumers could buy directly from the manufacturer.  Dealers charge too much for everything, especially maintenance and repairs.

Reading through this, literally made me nauseous.  I worked for one of the large groups and they don't allow anyone access to their DMS.  I seriously doubt that they have changed.  Blame the manufacturers.  They started all of this when they decided to provide invoicing to third partys.

Read those contracts dealers! Look like EveryCarListed wants your transactional data as well - http://forum.dealerrefresh.com/f21/yet-another-perpetual-data-feed-contract-2024.html#post16459

Dealers can shoot themselves in the foot as much as they want, for God's sake at least learn to use proper grammar and punctuation when arguing. You need one question mark for one sentence and I hope you aren't yelling at everyone in your posts. However funny it might be to read through the majority of "reactions", it is also a bit disheartening. Using things such as F&I ect... as a means to make money, isn't exactly that honest of a business practice. I do don't go to a grocery store and argue a price for groceries, I pay what is listed on the shelf which in most cases is pretty fairly priced and in-line with all other stores across the country. Nor do I pay the grocery store directly for the time the items sat on the shelf. Come on, get real and move with the future, everything is moving online and open to a consumer. People enjoy being lazy, but they also demand information and want it quickly, thus the internet. Another request maybe, just maybe, stop making annoying commercials on TV, most dealer's commercials can be made by high school students in an intro video production class. P.S. I found this post through Google, maybe they will get into cars one day? They enjoy buying consumer research databases, fully opening them, and using the data for their own profit advancement through advertisement and royalties. Them and Microsoft of course. And they aren't all that forgiving of corporations when it comes to data mining and acquisition.

Brad, are you referring to Edmunds or Zag? Love to hear you answer. If you are referring to Edmunds... Edmunds leads are no better than the average 3rd party lead coming from AOL Auto, Yahoo Auto and several of the other auto-centric lead driven sites. This is something that I was asked to not talk about, being privy to years of (behind the scene) lead scoring data tied into transactional registration data. Emunds leads are not going to close any higher and if they so it's not worth the percentage and ROI. Nor is it worth what they want from your DMS. PLEASE - what company in their right mind would get into the antiquated lead business without having an alternative motive?? The Perpetual Contract for your transactional data! I'm already hearing dealers are disappointed with the lead counts. Being over promised on the lead they were to receive VS the leads they are getting.

My 7 dealerships have been on the program for 90 days. ours is a flat fee and they do not have access to our dms. We were expecting double digit close, but it hasn't performed well for us at most stores (under 5%). Anywone else on the program with better results?

I believe it is actually in Zag's terms and conditions that you may not offer USAA customers financing if they've been pre-approved. Certainly a rule we won't be following. We do get two or three alright deals out of them per month. We get around 30 leads on average. Maybe it is just that not many dealers close to us are signed up with Zag. We set our pricing higher to account for the $300 fee. It's just a matter of getting someone willing to pay our price.  The other factor is that the customer builds up the vehicle rather than picking one from our inventory. Rarely is that exact vehicle in stock so it's easy to work around "the quoted price." It has benefited me as the ISM but I do feel bad for our sales guys because they rarely make money on Zag customers.

Great insight Jeff. I've been approached several times by ZAG and still try to figure out how I will be coming out ahead with their leads. Chances are, I will have a lead from that customer anyway and they would want to double dip me and increase my cost per vehicle sold. I'm with you in saying I would give my money to cars and AT before them and they won't be digging into my DMS. Why should us dealers give Edmunds and truecar any more transparancy in this business. When you look for a boat or an RV/camper, you won't find truecost, invoice pricing, or any rebates anywhere. Guess the car business is just different.

The best part of this program is what's coming down the pike. Remember folks, you are only paying for the New Car part of the program at this point. Used cars and CPO's are coming so get ready to dig into your pocketbooks because Edmunds wants it all. For those of you paying $3-4k a month for multiple stores, I have a suggestion - put one store on Edmunds and with the other, spend the $3-4k running a Pay Per Click campaign and compare them side by side. Get ready to send Edmunds your cancellation. Edmunds spends $1.5million a month on PPC to steal your customers from you and sell them back to you. Wake up! Edmunds gets a lot of traffic, there's no disputing that. They also have a bounce rate that hovers around 50%, please remind them of that once in a while.

We have 7 dealerships all on Zag and we do not let them have access to our database we do have to give them a custom report of sold units so they can match up customer info but that is all they get.  It is possible not to give them your transactional information and still get the leads. As a standard practice we give NOBODY full access to our DMS it is way to risky and nobody should be allowing that to happen. If dealers are doing that currently I urge you to STOP change the password and access to your DMS and tell Zag ( or any other provider) that your will give them a a custom report of only the sold info no transactional information and start protecting yourselves!!! Jon Sherrell

And your trusted allied TrueCar vendor just posted this on their blog.. http://blog.truecar.com/2011/06/27/what-is-dealer-holdback/

Found this on KBB after digging further, "The Fair Purchase Price is not a number influenced by dealers or manufacturers -- it is actual transaction data representing a range of what people actually paid for specific vehicles." They don't, however, state where they harvest this data from, but I think we know.

true car rocks.......just picked up a silverado at 1k under dealer cost.  didn't even invlve true car and made some calls myself seeing who wouldk match the price....you internet fellt guys hate me....LOL

Shame on me.  I've signed up for both of these companies at one time or another over the years.  In my haste to get leads and sell cars I just glazed right over the boilerplate.  Needless to say we're done with both. Reading through these posts has raised a couple thoughts. 1)  Who's auditing these companies to make sure they provide accurate data in the first place?  What's to keep TrueCar or Edmunds from juicing the numbers?   While it's a slightly different model, Costco and AAA's new online modules have done the same thing.  Month after month they keep telling us we have to come down on our pricing in order to get the requests, because, "...your competitor down the street is at $1100 back on altima, and you're only at $600 back."  One of these companies we caught with their hand in the cookie jar.  At some point they'll be competing to see who's site shows the lowest value.  Currently, TrueCar says a 2011 Toyota Prius II Average Paid is $24,993.  Edmunds TMV says $24,480.00.  I don't know what your customers are  saying in your local market, but $500 is a pretty substantial difference.  How long will it take for the newbie on the block to realize they need to take on the big dog, and jockey the pricing accordingly. 2)  Let's follow the logical conclusion of True Car and TMV.  The consumer sees the MSRP, the Invoice and the "TMV".  Let's say today the TMV is $500 over invoice.  How many of your internet customers are going to be good with paying that $500 over?  None, they're going to want to be somewhere under this number.  So 150 of these models are sold in your district this month, and the TMV adjusts.  Now you're $400 over next month.  Before you know it you're $500 under, and only picking up $100 of holdback....and so it goes.   If you're really looking for opportunities to sell cars check out companies like AutoRevenue and AutoAlert.  These companies are using our data for us, not against us. 

As a very small part of a fairly large group, I was shocked to learn that there was a DMS polling component to this deal (issue was never discussed at my humble level).  I mean, why would there be?  We're paying for a territory and for leads, right?  After reading through this for a few days, and seeing only one weak explanation as to WHY Edmunds describes this as a value to dealers, my question is still:  WHY?  Are we really that desperate for those leads.. especially these noted higher-funnel leads?  But aside from that....  If I was a dealer, or owner -- and I'm not, please don't misunderstand -- but if I was, I would probably realize that my database is a very, very valuable entity.  (Anybody disagree?).  So if someone comes to me with a deal where I'm going to PAY for a territory and leads, and I'm also going to GIVE them my precious data, at the very least (after I'm done scratching my head at the utter audacity of the proposal), I re-negotiate.  Again, I'm not an owner, but if I go to bat with the notion that MY DATA is more valuable that THEIR LEADS, perhaps I get a favorable outcome.  We have to remember that Edmunds has no magic wand -- there's lots of people on lots of sites, and frankly I've never heard of a consumer doing 100% of their research and shopping on Edmunds.  In other words -- if you're a good dealer, competitive, reasonable marketing mix -- you'll be found.  We're paying them, AND giving them our data... wow.  I don't think that's the type of negotiations that have kept the T3 space "strong."  Edmunds has to be laughing all the way to the bank!

---BUYER BEWARE!--- Edmunds Pay per Sale is the ultimate "Trojan Horse". It's pretty to look at, but it's built to OWN YOU. Read this post  "Who is making all the profits?" http://forum.dealerrefresh.com/f40/who-making-all-profits-1778.html#post14201 Be scared..., be very scared. You've been warned. The fox is in the chicken coop!

Confessions of a Salesman from Edmunds... "...every single time I get a dealer/manager on the phone, I hit them with my magic weapon....  'Edmunds is free, pay only for leads you sell'.  And, every time, the phone goes quiet for a moment and then the manager kicks everyone out of his office!   BAM!!!  FISH ON! I got him!!!   The concept is worded to perfection.  It preys on the busy multi-tasking manager and this NO PAY  promise plugs right into their reward system.  I love it! I set the hook deeper... I walk the manager thru our giant audience stats and paint a picture were managers all over the USA are signing on & loving our FAIR system AND it's scaring the hell out of AutoTrader and Cars.com because of their UNFAIR rates.  Managers everywhere love the idea of dumping AutoTrader and Cars for our FAIR system, and it's only logical, as more & more dealers sign on with Edmunds, AT and Cars will have to adopt our FAIR billing system. I race past the DMS stuff and I go for the close. Cha' Ching.  Nuthin' to it. "

"I'd say Edmunds is trying the best way they know how to make it 'safe' for you as a dealer since UNLIKE THE OTHER GUYS WHO LIST YOUR INVENTORY they are: Month to month with a 30 day out." You totally full of shit. Edmond's is not going to do any dealer any favors.They have been talking shit about how dealers suck for years. "Edmunds doesn't write me any bigger check if they're on or not." So you admit to being paid by those scum bags anyway. Dealers stay away from Edmond's and don't pay attention to their paid spokes person Matty here!

An excellent article Jeff, well writen and considered. A warning to independant  Australian dealers who may be releasing vital data directly to their competition thru certain relationships and JV's some Groups have with local Automotive Research and Online Advertising companies here!

From the horses mouth: We outsell 20 other dealers in our market and know EXACTLY what people pay for Nissan's and have so for 20 years. We know the RMV - that's "Real Market Value" - better in our market than Edmunds or TrueCar will ever think they know. Pulling numbers from the DMS is one thing, but can these websites be really trusted they are in fact sharing the REAL NUMBERS? We can't know! And we do not! The bottom line is they could care less about dealers, because they know dealers will pay up to be listed. I truly feel within the next 3 years, a better research/pricing website paradigm will emerge, that is car dealer fueled, by honest dealers like you and I, who love their customers, and the product we are privileged to sell. You will see vastly improved Lead generation that will make an edmunds free car quote form look like a stomped on piece of origami, lit with a blow torch. 1. A customer cannot buy a car from Edmunds. 2. Edmunds does not service nor do they warranty vehicles. Why are they acting like they can or do?

Jeff,   Edmunds’ new advertising program is neither pay-per-lead nor pay-per-sale.  Pay-per-lead from a site like Edmunds misses the point. We have over 14 Million consumers a month who are researching the purchase of a new or used car on the site, yet less than 1.5% of them actually submit a “lead” to a dealer. The other 98.5% are using the site to decide where to buy, they are just not sending leads, I mean, would you?  JD Power recently did a study that showed that Edmunds has twice as many buyers using the site in the month that they purchase as the average automotive research site (including Cars and AutoTrader).  In addition, according to Comscore 64% of our audience is not using any other 3rd party automotive research site (once you take out the Million uniques we are directly sending to AutoTrader, its 58% otherwise).  There is a reason that every OEM advertises to Edmunds' audience, and the same reason applies to dealer advertising.   As for the pay-per-sale model, it sounds great since you only pay when you sell, but you are relying on the company that is billing you to tell you what they "sold" for you, which sounds like more than a little bit of a conflict of interest to me.  In addition, as others have pointed out in this thread, most programs that charge on a per-sale basis also create an environment that either force dealers to sell cars at a loss, or to play the games that cause sites like Edmunds to write things like "Confessions of a Car Salesman".  That article ends with the following:   "Of all the advice I've offered, I'd just like to stress that it's important to remember that buying a car should benefit both you and the dealer. While I have focused on deflecting the sales techniques in the dealership, I don't recommend becoming overly defensive. If you deal fairlywith the car salesperson, and you get the same in return, the transaction can be enjoyable — even exciting. It really should be. So, I wish all of you a great shopping experience and many years of driving pleasure in your new car."     The entire article is still on the Edmunds site, maybe this will work: http://bit.ly/gXMUdH   As far as Edmunds "Suckering Dealers" into submitting transaction data to us as a result of our new advertising program; we are clear in our pitch and in our contract that we require transaction data to participate in our advertising program.   Even before the new program, we have had over 40% of all transactions being submitted to us from dealers that have elected to do so because they want to ensure the accuracy of TMV.  As for our new program, we feel that you have to participate to participate, meaning that if we are going to promote your brand next to TMV you have a vested interest in ensuring the accuracy of that value.     TMV is the local MEDIAN selling price of the vehicle in the market, meaning that 50% of transactions occurred above, and 50% of transactions occurred below TMV.  We may be off here and there, which is why we are always attempting to increase the accuracy of that value by increasing the number of transactions we use to calculate the value. As we commit to in the contract that you have published, we do not sell, share, or publish the raw data to anyone else, nor do we expose the  individual transactions to consumers, including those that occurred so far below invoice that were probably demos or loaners (unlike others), and despite your speculation, we have never forgotten the fact that we created TMV over 10 years ago to provide guidance to consumers to help empower them to get a fair deal.   I will invite any dealer on this site to look over every one of your last weeks' transactions, including all aspects of the deal, and compare it to the TMV price on Edmunds.com right now, and if we are not close to your average, then maybe you should send us your transaction data. ;) If anyone has any questions about the new product, feel free to contact me directly.   All the best,   Johnny G Director, Dealer Initiatives Edmunds.com

I always feel websites like Edmunds.com kick dealers like us all to the ground, only to step on our hands harder when we try to push ourselves back up. I just may have to start a blog or and create a you tube video titled "What Edmunds.com doesn't want you to know about". Since they are a consumer driven site, and people generally hope to hear the TRUTH, I'm sure I can get a few million eyes on it. Perhaps Edmunds "confessions" could include a very visible positive spin on the dealer network which keeps them humming along financially.

Without the car dealer, many websites would not exist. The hefty fee's dealers are forced to pay up month after month just to show up online at the usual high traffic sites, is gradually seen as nothing more than an inflated cable bill. These companies would not have the money to have invested in the infrastructure and develop the technology which we see today - had us dealers refused to pay what they have demanded, and gotten. Just like the cell phone and cable companies who over-charge us all, we are the ones who built the towers and paid for it all. Now we are forced to belly up more each month to use what we essentially created. Furthermore, websites like Autotrader, Cars, Edmunds, and so forth - have never made it public on their websites to the consumer, that the free quotes people send in, are in fact paid for by the participating dealer. It would be nice for these sites to make this known, so that possibly the quality of leads would go from crappy, to not so crappy. And do we really need more "Confessions of a car salesman" from the biggest instigator - Edmunds - to further squash consumers trust of car dealers. They are quick to build your suspicion, and promote you to acquire SEVERAL quotes to obtain the most competitive price - or - they ought to come clean, and tell them we're really padding our pockets, and if your lead is junk, who cares, the dealer still pays.

Ok.  It's time to take off the gloves and speak the absolute truth about these organizations: Zag and True Car:  Remember, they were started by former CarsDirect folks--Scott Painter and Mark Miller.  When they were at CarsDirect, the company had a well deserved reputation for advertising phantom cars, and when they received and order, literally  beating up dealers to sell them below any reasonable price.  They purchased a bunch of vehicle, put them in storage and advertised the below market value prices to drive down the price and put the dealers on the defensive.  After they left, more level heads took over at CarDirect, and they became very dealer friendly. Edmunds:  No matter if the send quality leads or not, this site is anti-dealer.  Go read their advise for yourself:  http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.html; http://www.edmunds.com/car-care/confessions-from-the-dealership-service-department.html; http://www.edmunds.com/car-buying/confessions-of-an-auto-finance-manager.html. These people purposely frame the dealer as the enemy.  It should not matter how "great" their leads are, in my opinion, dealers are feeding the souce who bits their hands.   Both of these companies are "Pro-consumer" but they are really anti-dealer.  Both have in their contracts the right to rifle a dealers DMS for their own use.  Both are trying to fool dealers.  When I spoke with an Edmunds Sales Director, he said "we have a partnership (AT.com) that touches 80% of the dealers and gets us 30% of the revenue.  We are now going to touch 30% of the dealers and get 80% more revenue.   Look dealers, do what you will.  I just wonder if dealing with these folks is like buying asbestos.  It will protect you from fire.  (But the cancer that comes later does not make it worthwhile. 

Mat, your explanation is a great example of what you were always capable of. You make your old boss proud.  The Readers Digest version would be to simply say "game theory." Dealers act in their own individual best interest and are incapable of forming any meaningful collective bargaining team. The result is that all dealers are forced to make these decisions in their own best interest or financially underperform relative to their true potential. This is why most of the Ivy League talent coming into the industry to capitalize on its inefficiencies -- generally by minimizing them -- are coming in on the vendor side, not the retailer side. Advantage is generally found in the portion of the production or distribution chain with the fewest competitors. Joe's points are spot on. The marginal cost per vehicle is greater than the stated cost per vehicle for these services. One must account for cannibalization and waste in any algorithm comparing the value of various traffic-now advertising campaigns.  The right decision is not the same for all dealers, but the right way to do the math necessary to make that decision generally is the same. No matter how hard I try, most dealers refuse to do the math or align themselves with a trusted person who can do it for them. This is why over $1Billion per year in dealer dollars are wasted on bad advertising decisions or poor advertising execution. That is where thousands of individual, self-serving dealers can make a difference for themselves and the industry, by properly crunching the numbers and acting accordingly.

Car dealers have always and will always live in a 30-day world. Even the dealer groups live this way, so no one is going to forgo the Edmunds or USAA Zag leads just to stand up to an onerous data contract. They will all cave (they always do) for fear that their competitors will sign up and get those leads.  Nice job Jeff, but dealers are expert marksmen when it comes to shooting themselves in the foot. (No offense, it's true.) 

I questioned the DMS access and this is the message I got from them: “Participating Dealers” for our consumers, not people who just want to “get leads” and continue the old dissatisfactory practices with them. It would be disingenuous of us to provide TMV and related transactional data to consumers and then display “participating dealers”, and the closest as “Premier Dealers”, who are not really participating in the process. These are the information points that consumers come to Edmunds.com for. It has been proven by our large group partners and individual dealers where we piloted this program to be a better experience for the consumer and dealers sell more car to them (and at higher grosses I might add).   The match back component of this data is very helpful for us to determine and do our best to be sure the dealer is realizing the ROI we believe he should be, and as we may have set forth in setting expectations with the dealer. The information can be key in advising on Best Practices. Also, this market intelligence can be helpful in “closing the sales loop” from the factory advertising being sent to drive traffic to the Dealer Locator pages. After reading this I told them no thanks. They are nuts...

The problem is that these customer member programs are not going to go away.  Customers are always looking for a special deal.  Zag goes after these large organizations like USAA, the NRA, Geico, the Hartford, Bank of America, etc. and says "Hey, put a member program on your site and we'll run it for you" (maybe even pay them to have it up there) and these organizations are just not saying no. So you can lose direct access to these customers or pick up a crucial (to the small-midsize dealer) 10-15 deals a month and still make money if done properly.  The best way to fix the problem if you are going to stick with Zag is to collude with the other dealers on the program in your area and agree with the GMs or ISMs not to price below invoice.  Unfortunately, in my area, one stubborn (and stupid) manager at another dealership wouldn't jump on board and so a race to the bottom began.