I just read a press release by Scott Painter the CEO of Truecar.com which I pasted below, according to him a customer that pays a dealer a good profit is a True Yuzt. I have been watching this thing unfold over the last week with Ziegler and Thibeau and was pretty much indifferent until I read Painter’s article. It is this guys goal to have his TrueCar price posted next to every new car MSRP, and from what I have read, that is well below invoice.
I think at this point we need to really asses the situation and decide if we a need a low life piece of crap like Scott Painter associated with our business, there is no profit in his business model for the dealer and from what Thibeau was pointing out their customers are having problems, which of course will come back to bite the dealers in the ass.
What would happen if every dealer took this threat seriously, banned the companies taking this information from thier DMS, and cut thier ties with Truecar.com and ZAG, how long can this Snake survive without cash flow?
See if you can read this excerpt from his article and feel positive about his product from a dealers point of view, (Arnold is excluded since his values no longer align with the dealers best interest.)
“The automotive market has not behaved based on supply and demand,” Painter told Wired.com, mostly because of information asymmetry. One example of market failure are the useless values of Manufacturer’s Suggested Retail Price (MSRP) and invoice. While they’re supposedly benchmarks of what consumers should pay, those numbers are “irrelevant” in today’s market, Painter said, because “almost all cars are selling under MSRP and invoice.”
According to Painter, that asymmetry of information means that consumers are inherently wary of dealers, even though the average dealer only makes $640 in front-end gross on each car sold. TrueCar research shows that the average consumer would negotiate a dealer profit that is 300 to 400 percent higher if only they knew how much the dealer was really making.
Painter says a TrueCar report is an unbiased source of information — much like Zillow or Consumer Reports — that consumers and dealers can use as a negotiating tool. A buyer who walks into a dealership with a TrueCar report, according to Painter, is ready to buy. “The dealer should embrace the fact they’re educated and not take advantage of them,” he told Wired.com.
Right now, a look at the TrueCar website shows that there are a lot of uneducated buyers out there. Glancing at a report for the Chevrolet Suburban, the TrueCar price report shows that one wheeler-dealer snagged a deal at $36,548, while a true yutz managed to pay just over $41,000 for the same identically-equipped SUV. Painter said TrueCar could eliminate those pricing disparities “almost immediately.”
In order to build trust inthe TrueCar brand, Painter is careful to distance himself from manufacturers or dealers. He envisions a world where dealers print a TrueCar window sticker alongside their own information, and where the process of purchasing an automobile treats a car like a commodity. “We’re transforming the market,” Painter said. Those dealers “not willing to give an upfront price are going to go out of business.”
How are parts departments dealing with their obsolete parts?