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Jeff Kershner

Jeff Kershner

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#1
I thought I would start a thread where we can ALL contribute ANY and ALL TrueCar / ZAG / Scott Painter (related to TrueCar) updates moving forward.

This will be better for keeping up the latest TrueCar / ZAG / Scott Painter news, organized in one post here on DealerRefresh. As a each state gets added to the list of banning TrueCar or as you hear new around TrueCar - POST IT HERE!

To get started, I'll post the Original article that got all of this started...

Dealers, wake up! Edmunds TMV and TrueCar Has Your Transactional Data

Help out and contribute to this post!
 
#2
#3
Honda in fight with TrueCar.com over prices displayed online

Honda has told its dealers that it won't give them advertising allowances if they offer vehicles below invoice on TrueCar.com.

In another sign of the Internet's increasingly influential role in auto sales, dealers are in the middle of a fight between Honda and TrueCar.com over prices displayed online.

American Honda Motor Co. has told its dealers that it won't give them advertising allowances if they offer vehicles below invoice on TrueCar, the fast-growing online auto sales service.

The Japanese automaker believes that disclosing cut-rate prices damages its brand and makes its dealers compete with one another for buyers rather than with other automakers.

Continue to read on the Chicago Times
 
#4
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Dealer Board Makes Determination Regarding TrueCar Pricing Model Today the Motor Vehicle Dealer Board reviewed the TrueCar's current pricing structure based in part on referrals and sales.

The Board made the determination that dealers who utilize TrueCar services and pay TrueCar based on the current pricing model are in violation of VA Code and face regulatory action including assessment of civil penalties and license suspension or revocation. Futher the Board cautioned dealers that until the Board has reviewed changes proposed by TrueCar, dealers are in jeopardy of further violations and penalties if the changes are deemed in violation of the law.

The Board will be officially notifying dealers of it's decision today and will consider additional recommendations from the Board staff concerning TrueCar at its March meeting.

http://forum.dealerrefresh.com/f46/va-dealers-using-truecar-violation-dealer-board-says-2361.html
 
#5
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TrueCar Dealer Alert 1-4-12


To: All Maryland Dealers

From: Redacted

Re: TrueCar/Zag

Date: January 4, 2012

It is the opinion of MADA that any vehicle referral program which requires a dealer to pay a fee only upon the sale of a vehicle violates Maryland's dealer licensing law. It is MADA's understanding that this is TrueCar/Zag's pricing structure.

Maryland licensing law is very clear.
  • In order to be a licensed dealer you must have a physical location and to be a new car dealer you must have an unexpired franchise agreement for the vehicles you are selling.
  • Maryland law further states that you may not sell vehicles unless you are a licensed salesperson and in order to get a license, a salesperson must be employed by a licensed Maryland dealer.
  • Section 15-314(d) states that a dealer or an agent or an employee of a dealer may not do any vehicle sales business with or through any person who is required to be licensed under this title if he knows that the person is not licensed.
These statutes have been upheld in court - Detroit Automotive Purchasing Service vs.Lee.

Numerous attorney general opinions have stated that car buying/referral services are unauthorized to the extent that they receive or expect to receive a commission or other compensation for their referrals.

MADA met with TrueCar/Zag officials at the June convention in Williamsburg and outlined our concerns that this payment method (dealer pays vendor only upon sale of vehicle) would be considered a commission paid to an unlicensed person for the sale of a vehicle which would put Maryland dealers in violation of the licensing law. We were told by TrueCar/Zag that changes were being made to the program; however, we are not aware of any changes as of this date.

MADA recently met with MVA and we expect a bulletin from them in the near future confirming long standing case law and attorney generals' opinions.

In conclusion MADA believes that any program in which the dealer pays on a per vehicle sales basis for a referral violates Maryland licensing law and would subject Maryland dealers to fines by MVA.

Any questions you may have can be directed to Redacted or me in the Association's office (xxx-xxx-xxxx).

************************************************** **********************************
All contact info removed
 
#6
California lays it out for dealers and TrueCar.

This is one of the more detailed Executive Summaries I have read…


CONCLUSION

In the State of California, TrueCar is viewed as an autobroker and vehicles displayed and offered for sale on TrueCar websites are advertisements to the public and must comply with California law.

According California to it appears that many facets of the TrueCar/Zag broker program fail to comply with California law and such non-compliance could expose both TrueCar and participating new motor vehicle dealers to legal liability and/or license action.




250px-Seal_of_California.svg_.png



In response to a large number of inquiries received from California dealer members, we requested outside legal counsel, Manning Leaver, Bruder & Berberich (who also authors the California Auto Dealer Advertising Law Manual), to research the occupational license status of TrueCar, Zag.com, Inc. and affiliates and opine on a variety of DMV licensing and advertising issues associated with the TrueCar program. Attached (after the jump) please find a copy of an Executive Summary of a Memorandum prepared by outside counsel.


The Executive Summary identifies a number of problems with the TrueCar model that could expose participating dealers to legal and/or licensing liability. Dealers that participate in the TrueCar program, or other similar programs, should individually review such programs with your own legal counsel for legal compliance.
Read the full Executive Summary after the jump…



Read Full Posting on the blog >
 
#7
#8
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Oklahoma Motor Vehicle Commission Requests That TrueCar/Zag Immediately Suspend Business
​

At the Oklahoma Motor Vehicle Commission (OMVC) meeting today the Commission discussed the TrueCar and/or Zag business model. According to the TrueCar website, "TrueCar charges all participating dealers the exact same performance-based service fee." Similarly, Zag's website states, "Zag only charges when a sale is transacted." Receiving a fee from a dealer for a completed sale of a vehicle arranged through the TrueCar or Zag website appears to violate Oklahoma Statute 47 O.S. Section 579.1, which prohibits brokering.

In addition to brokering, the Commission was concerned with several possible OMVC Advertising Rule violations, which include:


  • OAC 465:15-3-14(7) "The terms 'dealer's cost', 'invoice', 'invoice price', or other reference to the cost of the vehicle to the dealer shall not be used."

  • OAC 465:15-3-2(a) requires a stock number or disclosure of the number of vehicle available at the advertised price; and, requires that the vehicle be in possession of the dealer at the time the ad is placed, or may be obtained from the manufacturer or some other source, and this information is disclosed in the advertisement.

  • OAC 465:15-3-4 "Any advertisement of a 'Bait' or 'Bait and Switch' nature is prohibited." TrueCar's website acknowledges that, "At times, however, your selected color, options, or incentives will not be available at a dealership." This situation could lead to allegations of "bait and switch".


BEWARE: Oklahoma dealers are subject to regulatory enforcement action by the Commission; and, if found to be in violation of OMVC laws or rules could result in fines up to $1000 per occurrence and/or suspension or revocation of license.

In the letter going out today, the Commission requests that TrueCar/Zag immediately suspend business through Oklahoma dealers until the concerns are addressed and resolved to the satisfaction of the OMVC to fully comply with Oklahoma law.
 
#10
This is good news for TrueCar. They can change the financial relationship with the dealer and stay in business. So this entire circus act is nothing but great advertisement for them.

At the same time this is driving the spot light from the main issue--as denounced by Thibeau many times:

Customer and transaction data as well as its use.
 
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