TrueCar Scam on Dealerships – Transparency For ALL?

Since writing Edmunds TMV vs TrueCar – Dealers, wake up! several months ago, it hasn’t taken much time for the BUZZ to build. The industry and dealers are starting to see exactly what is happening and how WE DEALERS have been feeding the beast for years by allowing services like Zag and TrueCar the freedom to obtain our transactional data.

I’ve encouraged dealers to audit their DMS export fields every 6 months.

I urged dealers to NOT allow these companies to have your transactional data.

I brought to light that fact that some of these services are asking dealers to sign a Perpetual Contract

Over in the forums we have asked if TrueCar is using Zag Dealer Data to Create Value? – 4 pages of comments
My original post asking dealers to Wake Up because it’s not only Zag/TrueCat that wants your data – 70+ comments
Jeremy Alicandri’s Death of a salesman? Or dot-com bust: TrueCar.com

Our good friend Jerry has a few words to say (after his TrueCar has his original video removed) …

Then we have Brad Kargui’s video…

TrueCar Jesse Toprak speaking on Transparency and Haggle Free Selling

The list goes on… (if you can add the the list, please do so in the comments)

Who’s going to win the race to the bottom?

Guest Poster

I’m the founder of DealerRefresh. I got my start in the dealer business when I was 18. From there I've worked throughout several departments within fixed to variable ops. Whether it’s managing the desk, perfecting internet sales process or studying online marketing trends, I absolutely love this business and the challenges it brings. I’m currently VP of Sales for HookLogic, Inc. Additionally, I continue to consult to dealerships. My passion has been and continues to be helping dealers leverage the Internet to sell cars and improve customer service.

Please note: I reserve the right to delete comments that are offensive or off-topic.

102 comments
HowardHerold
HowardHerold

WOULD SOMEONE TELL ME IF TRUECAR IS OK TO USE??  OR IS IT A SCAM.

 

THANKS...................hhhazzy01@comcast.net

HowardHerold
HowardHerold

WOULD SOMEONE TELL ME IF TRUECAR IS OK TO USE??  OR IS IT A SCAM.   THANKS...................hhhazzy01@comcast.net

dtg
dtg

Joe - "Arnold, you gotta new nick name. Arnold "I guess a lot" Tijerina. You presume to your readers to have inside facts, when "your lack of facts is itself a message"." 
True or False, DealerRefresh has had the lead and technical understanding of this TrueCar / ZAG (past tense) data issue for months. You represent DealerRefresh. Is this the type of post you want to see in the upcoming court transcripts? Note: I am not defending Arnold's posts, he has the right to make his observations without getting bashed. Getting the "list of MANY names of vendors that have dealers transactional data" would likely be better done quietly offline so as not to cause employment or legal issues for one of DealerRefresh's own.Good Selling,dtg

dtg
dtg

Joe - "Arnold, you gotta new nick name. Arnold "I guess a lot" Tijerina. You presume to your readers to have inside facts, when "your lack of facts is itself a message"."  True or False, DealerRefresh has had the lead and technical understanding of this TrueCar / ZAG (past tense) data issue for months. You represent DealerRefresh. Is this the type of post you want to see in the upcoming court transcripts? Note: I am not defending Arnold's posts, he has the right to make his observations without getting bashed. Getting the "list of MANY names of vendors that have dealers transactional data" would likely be better done quietly offline so as not to cause employment or legal issues for one of DealerRefresh's own.Good Selling,dtg

dtg
dtg

FYI: TrueCar Dealership December Newsletter; Splitting TrueCar Open vs. Member Networks, ZAG name (brand) retired, dealership drawings, and  more... (I apologize if this has already been posted... did not see on quick review) http://dealers.zag.com/id/report/TrueCarUpdate.pdf 

dtg
dtg

FYI: TrueCar Dealership December Newsletter; Splitting TrueCar Open vs. Member Networks, ZAG name (brand) retired, dealership drawings, and  more... (I apologize if this has already been posted... did not see on quick review) http://dealers.zag.com/id/report/TrueCarUpdate.pdf 

Ross
Ross

Dealerships are totally screwed up in this way.  The spend thousands on lead but they seem to lose existing customers by poor treatment in sales or service.  They dont seem to understand aquisition costs.  It cost less to keep existing customers than paying for new ones.  They shoot themselves in the foot by hiring people who have no clue about selling cars.  I was at a BMW dealership where the GM hired a massage therapist and then wonders why she doesnt sell any cars.  

Ross
Ross

Dealerships are totally screwed up in this way.  The spend thousands on lead but they seem to lose existing customers by poor treatment in sales or service.  They dont seem to understand aquisition costs.  It cost less to keep existing customers than paying for new ones.  They shoot themselves in the foot by hiring people who have no clue about selling cars.  I was at a BMW dealership where the GM hired a massage therapist and then wonders why she doesnt sell any cars.  

Eley Duke
Eley Duke

Also, what does anyone have now in the way of info on TrueCar and DelerTrack getting in bed together?

Eley Duke
Eley Duke

Also, what does anyone have now in the way of info on TrueCar and DelerTrack getting in bed together?

Eley Duke
Eley Duke

I said this over on the forums, but will add it here too! I live in one the, if not the best pro-dealership states in the US, VIRGINIA! Our associations are awesome and work hard with legislators to protect dealers. Why do I say this, here is why. "Bird-dog" fee's are illegal in Va! It is illegal to pay anyone or an company acting as a broker a fee for selling a car in the state of Va that is not lic to sell cars in Va! 

Was at our annual Hampton Roads Auto Dealers Assoc meeting where VADA visits to bring us up to date. There was great discussion about vendors and "bird-dog" fees in Va. It is illegal to pay anyone that is not a lic salesperson in your store in the state of Va a fee for selling a car! Acting as a broker is illegal in Va essentially. Its a $1,000 fine for each case they find, to the dealer! It was said it is starting to be watched more closely and the dealer board is well aware of it! VADA stance - they are anti-broker!Just passing on the info. 

Eley Duke
Eley Duke

I said this over on the forums, but will add it here too! I live in one the, if not the best pro-dealership states in the US, VIRGINIA! Our associations are awesome and work hard with legislators to protect dealers. Why do I say this, here is why. "Bird-dog" fee's are illegal in Va! It is illegal to pay anyone or an company acting as a broker a fee for selling a car in the state of Va that is not lic to sell cars in Va!  Was at our annual Hampton Roads Auto Dealers Assoc meeting where VADA visits to bring us up to date. There was great discussion about vendors and "bird-dog" fees in Va. It is illegal to pay anyone that is not a lic salesperson in your store in the state of Va a fee for selling a car! Acting as a broker is illegal in Va essentially. Its a $1,000 fine for each case they find, to the dealer! It was said it is starting to be watched more closely and the dealer board is well aware of it! VADA stance - they are anti-broker!Just passing on the info. 

Kaiger00
Kaiger00

i read through a few of these comments here, but wanted to watch the 1st video listed there. it is labeled private, however i think if you post the URL or it from yourtube here, i will be able to click and see it. the 1nd video, i couldn't watch because Stephen Tyler and DMC were too loud for me to hear the guy. 

Kaiger00
Kaiger00

i read through a few of these comments here, but wanted to watch the 1st video listed there. it is labeled private, however i think if you post the URL or it from yourtube here, i will be able to click and see it. the 1nd video, i couldn't watch because Stephen Tyler and DMC were too loud for me to hear the guy. 

Marvmotors
Marvmotors

I've been scouring the web looking for the site where, in the interest of transparency and "pricing symmetry," Scott Painter has posted the bottom-line best rate that some dealers have actually paid for a TrueCar lead. To be truly informed and build trust in the TrueCar brand, dealers need to know if any other dealers are paying less than TrueCars' MSRP. Is it possible that only a "true yutz" would pay the $300 - $400 asking price for a TrueCar lead? I'm just saying.

Marvmotors
Marvmotors

I've been scouring the web looking for the site where, in the interest of transparency and "pricing symmetry," Scott Painter has posted the bottom-line best rate that some dealers have actually paid for a TrueCar lead. To be truly informed and build trust in the TrueCar brand, dealers need to know if any other dealers are paying less than TrueCars' MSRP. Is it possible that only a "true yutz" would pay the $300 - $400 asking price for a TrueCar lead? I'm just saying.

Matt Bohach
Matt Bohach

TrueCar claims they want transparency.  What they "truly" want is market dominance for their own profit.  They want to leach themselves onto every new vehicle transaction.  They want to become a drain on the already razor tight margins that dealers have.  Shut them out of your business Mr. Dealer.  Because if they are not stopped now, they may not be able to be stopped later.  They are well funded.  This is simple, do not pay for deals that you are missing by not having good people and process.  Generate your own leads through solid online advertising and make sure you convert them!  It's simple, though not easy.

Matt Bohach
Matt Bohach

TrueCar claims they want transparency.  What they "truly" want is market dominance for their own profit.  They want to leach themselves onto every new vehicle transaction.  They want to become a drain on the already razor tight margins that dealers have.  Shut them out of your business Mr. Dealer.  Because if they are not stopped now, they may not be able to be stopped later.  They are well funded.  This is simple, do not pay for deals that you are missing by not having good people and process.  Generate your own leads through solid online advertising and make sure you convert them!  It's simple, though not easy.

Mark Winters
Mark Winters

Do you not see the real problem here? As Dealers we have become weak and complacent, we write checks to third party vendors in the hopes of selling more cars.  The call to action here is to take back our dealerships.  Stop relying on Autotrader, Tru Car, Zagg and others to get customers for you to talk to. That's all they do, here is a person go get 'um. Let's fire all of them and improve our own process. How many dealerships struggle with their sales force to use the CRM? Change your policy to "If it didn't happen in the CRM it didn't happen". Hold people accountable. Train appointment making on the phone, asking for referral's, building a long term relationship, and the list goes on and on.

If we spent all of the money on "process" instead of lead generation we would sell more cars and we would grow our market. Do any of your doubt this?How many dealerships have a written sales process that covers every step your salespeople need to make? How many hold there salespeople accountable to the process. What about managers, do they have a process? are they held accountable?

FIRE THEM ALL!!!! All of these vendors are "Third Baseman" We hate it when a customer comes in to the dealership and we have to deal with a third baseman. These vendors are the internet version of a third baseman. And the sad thing is we PAID them to be that. 

Take back your dealership and stop being held hostage by these third base vendors.  Send a clear message that "We are fed up and we are not going to take it any more" and throw them out of the dealership.

Mark Winters
Mark Winters

Do you not see the real problem here? As Dealers we have become weak and complacent, we write checks to third party vendors in the hopes of selling more cars.  The call to action here is to take back our dealerships.  Stop relying on Autotrader, Tru Car, Zagg and others to get customers for you to talk to. That's all they do, here is a person go get 'um. Let's fire all of them and improve our own process. How many dealerships struggle with their sales force to use the CRM? Change your policy to "If it didn't happen in the CRM it didn't happen". Hold people accountable. Train appointment making on the phone, asking for referral's, building a long term relationship, and the list goes on and on. If we spent all of the money on "process" instead of lead generation we would sell more cars and we would grow our market. Do any of your doubt this?How many dealerships have a written sales process that covers every step your salespeople need to make? How many hold there salespeople accountable to the process. What about managers, do they have a process? are they held accountable? FIRE THEM ALL!!!! All of these vendors are "Third Baseman" We hate it when a customer comes in to the dealership and we have to deal with a third baseman. These vendors are the internet version of a third baseman. And the sad thing is we PAID them to be that.  Take back your dealership and stop being held hostage by these third base vendors.  Send a clear message that "We are fed up and we are not going to take it any more" and throw them out of the dealership.

Walt Kustra
Walt Kustra

Its amazing to me how businesses like true car even exist.  They literally leech off of dealers, costing them money, to sell them their own leads while they arm them with ridiculous information to use against us.  Its a terrible cycle.  Even worse is they perpetuate the myth that there is some secret scam to just rake customers over the coals for all their money, when most of the time were merely trying to sell a car at cost.  I hate everything about this whole true car scam.

The only way we win is to generate more organic leads through our websites and through training our people to become better at handling them to close at a higher percent. 

Walt Kustra
Walt Kustra

Its amazing to me how businesses like true car even exist.  They literally leech off of dealers, costing them money, to sell them their own leads while they arm them with ridiculous information to use against us.  Its a terrible cycle.  Even worse is they perpetuate the myth that there is some secret scam to just rake customers over the coals for all their money, when most of the time were merely trying to sell a car at cost.  I hate everything about this whole true car scam. The only way we win is to generate more organic leads through our websites and through training our people to become better at handling them to close at a higher percent. 

Aj Maida
Aj Maida

GRASSROOTS Movement.
This morning I submitted a lead threw
un-Truthful Cars and when the dealers sent me their responses I replied
with links to Jerry's video and other threads about the dangers of True
Car. I made sure to include un-Truthful Cars legal actions to Jerry Thibeau's
video posting on You-Tube and how a company with True in their name is
afraid of the TRUTH!!!!! Hopefully they will see this as the cancer that
it is. If we do not do something about it it will metastasize.

LET"S GO PEOPLE>>>START SUBMITTING THOSE LEADS!!!!!!!!!!!

Aj Maida
Aj Maida

GRASSROOTS Movement. This morning I submitted a lead threw un-Truthful Cars and when the dealers sent me their responses I replied with links to Jerry's video and other threads about the dangers of True Car. I made sure to include un-Truthful Cars legal actions to Jerry Thibeau's video posting on You-Tube and how a company with True in their name is afraid of the TRUTH!!!!! Hopefully they will see this as the cancer that it is. If we do not do something about it it will metastasize. LET"S GO PEOPLE>>>START SUBMITTING THOSE LEADS!!!!!!!!!!!

Adsfaed
Adsfaed

Arnold you sure have a lot of time to respond to why you don't have time to make a list of other companies for everyone ...

Adsfaed
Adsfaed

Arnold you sure have a lot of time to respond to why you don't have time to make a list of other companies for everyone ...

Alex Snyder
Alex Snyder

Whoa whoa WHOA there dtg.  Arnold Tijerina is in NO WAY affiliated with DealerRefresh.  In fact, I would go so far to say every single one of the administrators at DealerRefresh have the complete opposite opinion of Arnold on this particular issue.

Alex Snyder
Alex Snyder

Whoa whoa WHOA there dtg.  Arnold Tijerina is in NO WAY affiliated with DealerRefresh.  In fact, I would go so far to say every single one of the administrators at DealerRefresh have the complete opposite opinion of Arnold on this particular issue.

Jeff Kershner
Jeff Kershner

From the article -

3. Eliminating Underperforming Customer Acquisition Programs
TrueCar is committed to providing significant incremental sales and improved margins to its dealer partners. Due to the expected increase in customers – while also maintaining the industry’s highest quality standards – TrueCar feels strongly that its service can pick up the slack from underperforming dealership customer acquisition programs. For this reason, TrueCar recommends that Certified Dealers re-evaluate the effectiveness of their existing marketing programs (e.g., lead generation, search engine marketing, inventory listing services, print, radio, TV, billboard, etc.) and eliminate underperforming programs. By prioritizing TrueCar-referred customers, Certified Dealers can move more metal while also improving margins.

Jeff Kershner
Jeff Kershner

From the article - 3. Eliminating Underperforming Customer Acquisition Programs TrueCar is committed to providing significant incremental sales and improved margins to its dealer partners. Due to the expected increase in customers – while also maintaining the industry’s highest quality standards – TrueCar feels strongly that its service can pick up the slack from underperforming dealership customer acquisition programs. For this reason, TrueCar recommends that Certified Dealers re-evaluate the effectiveness of their existing marketing programs (e.g., lead generation, search engine marketing, inventory listing services, print, radio, TV, billboard, etc.) and eliminate underperforming programs. By prioritizing TrueCar-referred customers, Certified Dealers can move more metal while also improving margins.

Kaiger00
Kaiger00

PS im full of typos.
1. "url from youtube"
2. 2nd video music was too loud.

thanks

Kaiger00
Kaiger00

PS im full of typos. 1. "url from youtube" 2. 2nd video music was too loud. thanks

NothingnewJustdifferent
NothingnewJustdifferent

We've always paid for 3rd party "advertising" to sell our cars in almost everything we do to attract customers.... Be it paper, TV, radio, AutoTrader, Edmunds, billboards, mailers, big gorrillas, corporate partnerships, and the list goes on forever - including 3rd party leads... Trust me the newspaper isn't/wasn't there to provide news and our advertising supported that noble cause... It's created to attract viewers/readers so they can sell advertising. No different than a 3rd party site providing "low pricing options" or even "unbiased reviews" in order to attract visitors in order to get dealers to "advertise" by buying the subsequent leads.... Pure Capitalism at its best!

Do we need to fix processes? Yep, automotive is notoriously sloppy there... THAT is how you earn business - because in today's world consumers don't have to put up with only their local dealer and however poorly he wants to treat them. Trust me - 3rd parties aren't killing the profit, it's how poorly we treat our customer via email, phone, and when they show up...

And I'm not a 3rd party marketing vendor - but I have run a few pretty decent eCommerce operations in my days.

lightnup
lightnup

Mark, I agree that every dealer needs to require adherence to consistent training, sales, CRM and follow-up processes. Those that don't are losing market share and it's only a matter of time before they close their doors or sell out to a more astute dealer.

However, having good processes alone doesn't bring people to your door nor is having those processes in place a reason to not advertise where a significant number of in-market car shoppers are. There is a big difference between BUYING leads (here's a person, go get um) and ADVERTISING your dealership and inventory on 3rd party classified sites (here we are, here is our inventory, you wouldn't be searching on here if you weren't already somewhere in the buying process, come see us if/when you're ready).

Perhaps a more measured analytical approach to figuring out what drives your traffic would be better than a fire-them-all philosophy? Do you consider the company from whom you buy those balloons and that inflatable purple gorilla to be "Third Basemen" too?

NothingnewJustdifferent
NothingnewJustdifferent

We've always paid for 3rd party "advertising" to sell our cars in almost everything we do to attract customers.... Be it paper, TV, radio, AutoTrader, Edmunds, billboards, mailers, big gorrillas, corporate partnerships, and the list goes on forever - including 3rd party leads... Trust me the newspaper isn't/wasn't there to provide news and our advertising supported that noble cause... It's created to attract viewers/readers so they can sell advertising. No different than a 3rd party site providing "low pricing options" or even "unbiased reviews" in order to attract visitors in order to get dealers to "advertise" by buying the subsequent leads.... Pure Capitalism at its best! Do we need to fix processes? Yep, automotive is notoriously sloppy there... THAT is how you earn business - because in today's world consumers don't have to put up with only their local dealer and however poorly he wants to treat them. Trust me - 3rd parties aren't killing the profit, it's how poorly we treat our customer via email, phone, and when they show up... And I'm not a 3rd party marketing vendor - but I have run a few pretty decent eCommerce operations in my days.

lightnup
lightnup

Mark, I agree that every dealer needs to require adherence to consistent training, sales, CRM and follow-up processes. Those that don't are losing market share and it's only a matter of time before they close their doors or sell out to a more astute dealer. However, having good processes alone doesn't bring people to your door nor is having those processes in place a reason to not advertise where a significant number of in-market car shoppers are. There is a big difference between BUYING leads (here's a person, go get um) and ADVERTISING your dealership and inventory on 3rd party classified sites (here we are, here is our inventory, you wouldn't be searching on here if you weren't already somewhere in the buying process, come see us if/when you're ready). Perhaps a more measured analytical approach to figuring out what drives your traffic would be better than a fire-them-all philosophy? Do you consider the company from whom you buy those balloons and that inflatable purple gorilla to be "Third Basemen" too?

Griff
Griff

As a consumer, I use sites such as TrueCar because I am sick and tired of the manipulation received when I go direct to the dealer to buy.  I would much rather go to the dealer and strike a deal. But, when anyone attempts that we get the old sticker price starting point, "let me ask the manager", and gimmicks galore(tektor, scotch gaurd, (or other surface protections) extended warranty and on and on.

Additionally once I think I have a deal I see the $400-500 "DOC FEE" crap.

 

Want business without the PITA- Try honest advertising, honest pricing and no add-on profit centers. Advertise out the door pricing and watch the customers come back.

Griff
Griff

As a consumer, I use sites such as TrueCar because I am sick and tired of the manipulation received when I go direct to the dealer to buy.  I would much rather go to the dealer and strike a deal. But, when anyone attempts that we get the old sticker price starting point, "let me ask the manager", and gimmicks galore(tektor, scotch gaurd, (or other surface protections) extended warranty and on and on. Additionally once I think I have a deal I see the $400-500 "DOC FEE" crap.   Want business without the PITA- Try honest advertising, honest pricing and no add-on profit centers. Advertise out the door pricing and watch the customers come back.

Arnold Tijerina
Arnold Tijerina

Alex, If you read his comment again, he was addressing the comment to Joe, not to me. Joe is certainly affiliated with DR. He was criticizing how Joe chose to speak to me and his use of the un-professional nicknames he chose for me.

Arnold Tijerina
Arnold Tijerina

Alex, If you read his comment again, he was addressing the comment to Joe, not to me. Joe is certainly affiliated with DR. He was criticizing how Joe chose to speak to me and his use of the un-professional nicknames he chose for me.

Andrew
Andrew

Jeff

"Improve margins"  thats crazy talk. The smart dealerships agree that trucar.com is an issue with the profitability of a dealership.  The next thing that will be coming out will be that Dealerships will offer under invoice prices to consumers if they "dont" go through trucar.com.  I'm sure you all know, that trucar gets paid $300 for every lead that buys a vehicle using trucar website.  This loss, plus below invoice price makes dealerships lose money NOT improve margins.  Many will say that "the dealership will make it up in finance or in service", however most dealerships have these departments as stand alone profit centers within the dealership. In the long run many dealerships sales profitability will suffer if something is not done. A great article in the columbus dispatch in columbus ohio should be read.  It references what Honda thinks about this whole thing.  This might drive traffic, however at what cost.  Informed customers can always get a price below invoice by the good old fashion way.  Private negotiations! 

Andrew
Andrew

Jeff   "Improve margins"  thats crazy talk. The smart dealerships agree that trucar.com is an issue with the profitability of a dealership.  The next thing that will be coming out will be that Dealerships will offer under invoice prices to consumers if they "dont" go through trucar.com.  I'm sure you all know, that trucar gets paid $300 for every lead that buys a vehicle using trucar website.  This loss, plus below invoice price makes dealerships lose money NOT improve margins.  Many will say that "the dealership will make it up in finance or in service", however most dealerships have these departments as stand alone profit centers within the dealership. In the long run many dealerships sales profitability will suffer if something is not done. A great article in the columbus dispatch in columbus ohio should be read.  It references what Honda thinks about this whole thing.  This might drive traffic, however at what cost.  Informed customers can always get a price below invoice by the good old fashion way.  Private negotiations! 

Joe Pistell
Joe Pistell

Arnold,

Please let me reach out to you and apologize for my un-professional reply. I was sincerely pursuing details from your blog post because your blog post led me to believe that other vendors had transactional data. This was BIG news to me and I simply wanted to match your list against my vendor list and plug holes. When I didn't get that list my reply was as you said... juvenile.

My apologies to you and the DR community.

Alex Snyder
Alex Snyder

You're right Arnold.  I totally missed the "Joe" at the beginning.  Maybe I should start reading these comments on the blog instead of through moderating-optioned emails.

Joe Pistell
Joe Pistell

Arnold, Please let me reach out to you and apologize for my un-professional reply. I was sincerely pursuing details from your blog post because your blog post led me to believe that other vendors had transactional data. This was BIG news to me and I simply wanted to match your list against my vendor list and plug holes. When I didn't get that list my reply was as you said... juvenile. My apologies to you and the DR community.

Alex Snyder
Alex Snyder

You're right Arnold.  I totally missed the "Joe" at the beginning.  Maybe I should start reading these comments on the blog instead of through moderating-optioned emails.

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  1. [...] TrueCar Scam on DealerShips – My Canadian dealer crew probably won’t be too concerned about this post but my American dealer friends are up in arms.  This new concept is looking to slash out the middleman aka you… the car salesman.  Tonnes of press on this lately, heck I even saw a TV commercial. [...]