Edmunds TMV vs TrueCar - Dealers, wake up!

[Jeff Kershner]

As you know or if you're not already aware, Edmunds.com is going direct to dealers. They're cutting out the middle man (AutoUSA, Dealix and Autobytel) and coming after our business with a newly hired sales team.


Dealers, WE/YOU have a very important choice to make that WILL help determine change (good or bad) to our industry. Keep in mind, Edmunds.com has never been one to treat the dealer fairly.

I've been watching this for a while, and it's not rocket science, but follow me...

A few years ago, Zag is re-selling leads to dealers per lead basis. Zag changes their subscription model and starts charging dealers on a per sold basis.

"So I don't pay unless I sell a car?" - nope. That is music to a dealer's ears!

However, in order to determine what to charge you, Zag needs access to your DMS in order to match-up customer sold data (dare they say "transactional data to the dealer") with the leads they've sent you over the last few months.

Dealers don't think twice about signing up for the new Zag subscription model. But not thinking twice is the potential issue. You just signed an agreement allowing a 3rd party company to proudly scrub your DMS for YOUR transactional data! Only to use this data to power a CONSUMER facing price analysis tool - TrueCar!

TrueCar Inc. is an automotive solutions provider focused on changing how cars are sold by providing a significantly better customer experience while helping qualified dealer partners to gain incremental market share and reduce costs. TrueCar.com is a transparent, visual publisher of new car transaction data.

How much more transparency does our business need? Perhaps this is nothing more than the evolution of our business.

I've spoken to several higher-ups at TrueCar and trust me, this is a determined company. They "want to change the way cars are sold and bought". Yeah, we've heard this before, but this time we dealers need to listen and pay attention.

The challenge; how does TrueCar turn TrueCar to be a household brand?

Let's review the top visited online automotive research sites ...


In order for TrueCar to become a household name, they need a platform to brand themselves. Edmunds.com fits the bill.

Before I go any further, allow me to inform you the following is pure speculation on my part...

TrueCar's people speak to Edmunds people about a possible synergy between the two. They consider a deal UNTIL Edmunds.com say "Whoooaa - wait a second, we already have a TrueCar piece and it's over a decade old". TMV - True Market Value.

For sure you haven't forgotten about TMV have you?

Edmunds.com quickly figures out exactly what they need to do. Sell direct to the dealers. And in return suckering dealers into allowing them to pull their transactional data.



Click here for a copy of the Edmunds.com Dealer Agreement For Dealers.

TrueCar already claims to have over 40% of all transactional data In the United States. Dealers allowed this to happen due to our ignorance and oversight.

Are you going to allow Edmunds.com to have YOUR data as well?

 

[Anthony Stanley]

Jeff, Great story!  I don't understand why dealerships feel the need to pay someone to help them give aaway gross profit.

 

[Danielmorgan]

I think its a Double-edged sword. Edmunds is one of the top vehicle research sites and normally has good to decent leads but yet they pull all our data to "help" the customers get a great buy and open up that lovely can of worms.....

 

[DevlonC]

I looked into the Zag deal because they run the USAA's buying service.  They charge $300 a car you sell and most of the dealers are pricing their vehicles way below invoice.  Something here doesn't make sense.

 

[joe.webb]

Great article, Jeff.  It makes you realize how all of this consolidation of companies and product offerings also means consolidation of data.  Vendors recognize that the more a consumer utilizes their system, it requires the dealers to follow suit.  In this instance, as you pointed out, it is a detriment to dealers for this to happen - AND THEY CAN ONLY DO IT WITH OUR HELP.  

Way to point out another obstacle for dealers to overcome in the online battle of transparency vs. profit.

 

[Stan Sher]

Oh my god..,I have been questioning many dealers that I work with or have worked with about why they would sign up. Their exact response is always "we sell an extra 10 to 20 cars per month with it it". They don't consider that the leads they are getting for the most part are a waste of time for bdc departments to handle because the price is non negotiable. More times then none the leads they send are from 50 miles away. So the customer takes the price and buys it locally. Talk about a vendor scamming dealers. Dealers listen to the fact that they pay if the car gets sold and no one ever tells them how it hurts them. When I tell them they don't listen either.

 

[Eric Miltsch (blog)]

Great explanation Alex.

There has to be so many people (dealers) who have no idea this is happening to them & what it means to them as well.

Also, can you expand on how the people at TrueCar intend to make this "change" from the service they provide? (and I want your interpretation, not their fluff answer, I know your explanation will be sans garbage!)

 

[Guest]

Dealers that sell for a loss on the front end make it up in F&I.

 

[Daniel Boismier]

Jeff,  what is the reference to PureCars in the article "PureCar already claims to have over 40% of all transactional data In the United States." How does that play into this?  
 
 

 

[Joe Pistell]

Dealers, beware the EDMUNDS CASH trap. 

Edmunds is a research site, NOT a purchase decision site. Shoppers here are just beginning their MULTI-MONTH journey. 

What if you get a lead from edmunds on a Nissan Juke ('cuz it's cute) and 4 months you sell her a Chevy Cobalt from your Presidents day sale in the local paper.

On paid services like edmunds, the offer of "pay us only if you sell" is what we want to hear,  but buyer beware, look deeper!  You're NOT paying for an up, you've created an open door for an outside party to scour through your records and ADD MORE DOLLARS to your ad costs PVR.