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TrueCar Not True Friend of Dealers

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The Internet marketing firm is sponsoring every dealer-related event around in order to re-introduce itself.

I’m leaving Las Vegas again, sitting at McCarran airport waiting to board the red-eye back to Atlanta.

This is the ninth time I have been a speaker at a Las Vegas event this year. Never thought I’d say it, but I am more than a little burned out on Las Vegas. I have two more speaking events scheduled there this year.

The latest one was at AutoCon2012, a new first-time Internet and technology conference.

I delivered the opening keynote address and conducted a workshop on Internet sales. The surprise of the evening came when they awarded me the “Lifetime Achievement Award.”

In the center of the conference’s exhibit area was a huge, generously staffed TrueCar booth. The firm was the major sponsor. Even the hotel room keys had its logo on them.

TrueCar is sponsoring every dealer-related event around in order to re-introduce itself as a friend of the dealer. Scott Painter’s company has hired a small army of public relations people to try to repair a damaged image after the industry and various government regulators rapped his business model.

Dealers objected to TrueCar generously arming consumers with pricing information. Some dealers suspected the data came from their computer systems. Some state franchise-law enforcers objected to TrueCar giving dealers leads for free, then charging up to $400 if a car sale resulted. That’s considered bird-dogging in some states.

One TrueCar executive, Michael Timmons, formerly of AutoNation, is a great guy. He and I communicate regularly, although I have told him in no uncertain terms that I don’t trust his company or CEO Painter. Still, Timmons is a friend.

He took me to dinner at a nice restaurant in Las Vegas. Because TrueCar was paying for it, I searched the menu for the most expensive entrees, although I held back on ordering the V.S.O.P. cognac.

He told me that TrueCar has transformed itself. The company realizes dealers are its customers. I left there with a good feeling. Maybe it was time to rethink TrueCar.

The next day at lunch, I was with a dealer from Arizona. He asked if I were still crusading against TrueCar. I told him, “No, I am actually lightening up on them, because they’ve made significant changes.”

That’s when he handed me a newspaper article from The Arizona Republic. The story was about the document fees dealers charge for handling registration, titling, licensing and assorted paperwork related to a vehicle purchase.

This is what the paper reported:

“‘In states like Arizona, it has turned into an additional source of revenue,’ TrueCar Vice President Jesse Toprak said. ‘Dealers hope you don't notice (the fee)…’

“Toprak described the doc fees in some states as ‘the Wild West,’ with no laws limiting the amount that can be charged and when it has to be disclosed.

“Toprak said the doc fee is just one of several areas ‘a dealer can bury profits’ all of which are dealt with in the finance office as paperwork is being signed. Among the other profit centers Toprak cited were warranties, financing options, insurance, paint-protection plans and accessories.

Doc fees appear as a separate line item, but Toprak said some dealers don’t point it out to buyers.”

Burying profits? Hoping you don’t notice? Apparently, TrueCar wants consumers to feel the way it does: Dealers are crooks.

I felt like a fool, talking to this dealer, with several other dealers at the table hearing me say I was lightening up on TrueCar and suggesting we give them another chance.

They haven’t changed, only their public image has changed. The culture of the organization remains, more than ever, anti-dealer. They’ve just glazed that over, except when interviewed by the press.

Keep those phone calls and emails coming. I love to hear from you.

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com. WardsAuto readers also may comment on this article by logging in or registering below. 

Discuss this Blog Entry 4

on Sep 28, 2012

I was somewhat surprised to read this article when my general manager forwarded it to me asking if TrueCar was a problem. I have seen similar arguments at TrueCar meetings, at conferences and in many different industry forums.

I am no evangelist for any lead provider or third party service. I would cancel every last one of them if I thought our dealership was in a position to do so responsibly. That being said, TrueCar can provide a valuable service and certainly helps our dealership develop trust with customers before they come to the showroom.

However, the premise described in this editorial is really disingenuous. I don't believe TrueCar wants to represent dealers as crooks: it wants to represent crook dealers as crooks. Many dealers do obscure fees and profit as government or regionally negotiated fees that are beyond a consumer's reproach.

The expectation that the only way we can make a profit is by swindling consumers is crazy. Fees should not be obscured or used to confuse consumers. Should we make a profit? Absolutely. But let's do it because we listen to the customer's needs and build value in our products, services, trade-valuations and customer service, not because we figure out how to manipulate a customer.

*We* are the reason that customers don't trust dealers, not TrueCar. And the only way to change that is to change the way we treat our customers. Only once we learn to build relationships with our customers that allow trust to develop again can we hope to be respected and not seen as crooks.

on Sep 30, 2012

I find it difficult to even begin to respond to Mr. Daniel Wingard's flowery comments regarding TrueCar and the sanctimonious thread where he chastises those crooked dealers that swindle customers with trickery and doc fees.

So suffice it to say I believe, based on actions and facts, that TrueCar has an anti-dealer culture... which has in my opinion been documented with thousands of pages of previous conversation by thousands in our industry.

When Mr. Wingard started lecturing on crooked dealers and the need to listen to our customers and building value, and he even said TrueCar helps dealers build trust with consumers: I found his tone to be condescending and sounding suspiciously as if it were written by the TrueCar board of directors.

on Oct 4, 2012

I am appreciative of your response and very receptive to conversation. I had no intention to come across condescending and I am certainly no agent of TrueCar and work for a dealership group (Bunnin Automotive Group in Los Angeles).

I do fully admit, however, that I am quite new to the auto industry. Perhaps after having seen how so many practices in so many dealerships are working so backward, I have myself have become somewhat "Anti-Dealer". We are an industry which lags behind the customer service and quality of experience expectations of most industries and it is my goal, among other goals, to help change that perception.

I completely agree that TrueCar is self-interested. But this does not mean anti-dealer to me. But, if I were to entertain that they were anti-dealer, the same critique would apply to every third party vendor we use, but TrueCar's critiques are far less egregious than most.

In fact, I can pretty safely say that once we cancel Autotrader and Cars.com and other Third Party lead providers for a complete lack of ROI, I will likely suggest to my group that we continue using TrueCar: we have a clear ROI where we can track what we spent and who responds to our marketing and outbound communications. They encourage dealers to attend courses to train them to better sell the product and the trust that they have the potential to engender. Customers use TrueCar products (and similar pricing programs) to feel trust with pricing. It takes the guess work out of it. As a dealership, this puts us in a position of being able to start the conversation with a customer with that openness of pricing and build on that "promise of trust". Surely, it's still ours to squander, but it's a start.

And.. dealers are crooked, but only because they have to be to survive. Customers don't trust us to provide a fair price, so we have to work in money in little pockets all over the place because we have to. I want to see a future where customers value us for our service and quality of care and training, not where they price-shop 30 dealers to save $80 and burn the dealer in the process.

Does change hurt? Absolutely. But better to change and deal with some changes than hold to a model which allows others around you to out-innovate and out-maneuver you to the point of obsolescence and extinction.

on Jun 20, 2013

I am very happy with your appreciation; there is a bad image of car dealers in public eyes.

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What's Retail Front?

Blogs about automotive retailing, commenting on news impacting the business of selling vehicles.

Contributors

Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine. His journalism career started 40 years ago as a crime reporter. A Michigan native, he likes fast cars, big lakes and cold days.

Jim Ziegler

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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