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Zag question

danoneil

Sr. Refresher
Apr 16, 2009
558
32
28
First Name
Dan
Back in 2009 I started a thread discussing low ball tactics by zag dealers. link

Here's a quote from that thread "ZAG is a disgrace to the car business, and that is saying something given the reputation we all are burdened with! They claim to be the pinnacle of honesty and disclosure but they let their dealers get away with flagrantly ignoring their rules.

In my area and with my brand, the problem I have is dealers including rebates and incentives in their ZAG pricing. Well, you're not supposed to do that, so if you do your price suddenly looks up to $3-4k lower than your competition. I've called to complain about that, explained exactly what the other dealers are doing, and given them the math showing that the other dealers could not POSSIBLY be selling the cars for that price (I don't care how desperate you are, a $3k net net loser? come on!) and ZAG has blown me off. The answer I have gotten is "Well, no members have complained about this happening." No shit. Of course they're not going to complain after they've already bought the car. Wouldn't you feel like a total idiot after being bumped for $3k from some stupid low ball price? I would..."

ZAG is just another example of one of those companies that WE GIVE MONEY so that they can help customers PAY US LESS. How does this business model make sense?

And so, my ZAG prices take into account that I'm going to have to pay them $300 and I have a reasonable margin built in. If customers want to go fight with other dealerships who straight up lie to them, more power to them. I don't do business like that.
 

MullerToyota

Refresher
Jun 20, 2009
103
8
0
First Name
Muller
Honda's consider's all ZAG quotes to be an advertised price. If you quote a advertised price under invoice, it is violation of Honda's dealer agreement. We don't agree with Honda's assessment, but we have decided to take a no risk approach. We have not been sending automated quotes for over 7 months.
I wish Toyota had the same rule. I was competing dealers advertising $1,000 below invoice on every model. No fun...
 

Alex Snyder

President Skroob
May 1, 2006
2,847
1,488
113
First Name
Alex
Honda's consider's all ZAG quotes to be an advertised price. If you quote a advertised price under invoice, it is violation of Honda's dealer agreement. We don't agree with Honda's assessment, but we have decided to take a no risk approach. We have not been sending automated quotes for over 7 months.
Interesting. I hadn't heard of this change in policy. We weren't a Zag customer when I was at Checkered Flag and I have been out for longer than 7 months, so it isn't a surprise I haven't heard this.

Alex, don't I recall that you love Zag? :D
Oh yeah Eley - I'm a huge fan ;)
 

danoneil

Sr. Refresher
Apr 16, 2009
558
32
28
First Name
Dan
Honda has always had a policy of not allowing dealers to quote below invoice. Honda started to police the Zag situation about 9 months ago. There are honda dealers using zag and sending quotes, but there is a risk. It is a risk we are not going to take. Not sending a automated quote has not hurt our zag sales.
 

Jeff Kershner

Founder
May 1, 2005
3,567
1,168
113
First Name
Jeff
I'm not an advocate for Zag and I recommend all dealers take a good hard look at their ROI and overall performance with Zag. From my experience, the only leads worth "working" are the USAA leads.

Can you take the money you spend with Zag, place it into paid search and re-marketing and produce better results by driving more potential customers to and back to your dealer website?

A lot of time and resources can be spent on under performing Zag leads. Ask yourself, could you place your time and resources working more qualified, higher ROI leads?

Side note: I'd recommend NOT giving Zag your transactional data while your at it. Unless you don't mind companies using your dealers data against you for consumer pricing tools. If you're cool with that - continue on. It's most likely the evolution of our business anyways.
 
Last edited:

JesseJ

Refresher
Mar 22, 2011
113
5
18
First Name
Jesse
Back in 2009 I started a thread discussing low ball tactics by zag dealers. link

Here's a quote from that thread "ZAG is a disgrace to the car business, and that is saying something given the reputation we all are burdened with! They claim to be the pinnacle of honesty and disclosure but they let their dealers get away with flagrantly ignoring their rules.

In my area and with my brand, the problem I have is dealers including rebates and incentives in their ZAG pricing. Well, you're not supposed to do that, so if you do your price suddenly looks up to $3-4k lower than your competition. I've called to complain about that, explained exactly what the other dealers are doing, and given them the math showing that the other dealers could not POSSIBLY be selling the cars for that price (I don't care how desperate you are, a $3k net net loser? come on!) and ZAG has blown me off. The answer I have gotten is "Well, no members have complained about this happening." No shit. Of course they're not going to complain after they've already bought the car. Wouldn't you feel like a total idiot after being bumped for $3k from some stupid low ball price? I would..."

ZAG is just another example of one of those companies that WE GIVE MONEY so that they can help customers PAY US LESS. How does this business model make sense?

And so, my ZAG prices take into account that I'm going to have to pay them $300 and I have a reasonable margin built in. If customers want to go fight with other dealerships who straight up lie to them, more power to them. I don't do business like that.
This is the issue we run into. It doesn't seem to promote great business to draw customers in the door by lying to them. We have a margin built in as well. I suppose more people in the door does ultimately lead to more sales but it's going to be anything but hassle-free.
 

ECURB

Refresher
Feb 19, 2010
108
6
18
First Name
Bruce
Honda's consider's all ZAG quotes to be an advertised price. If you quote a advertised price under invoice, it is violation of Honda's dealer agreement. We don't agree with Honda's assessment, but we have decided to take a no risk approach. We have not been sending automated quotes for over 7 months.
There has to be an simple way to word your way around that... then again if it is working without having to do that... even better.
 

Marc McGurren

Getting Refreshed
Nov 30, 2009
96
1
6
First Name
Marc
That's very helpful to know. Thanks a lot. Do your vehicles ultimately sell at the original quoted price?
Jesse - when the customer buys the exact vehicle we quoted them - yes. But as you and I both know - most times the customer ends up changing vehicles. I will honor anything I put out there and many times customers do buy exactly what ZAG has quoted them. What does erk me about ZAG is that the customers can build a vehicle that doesn't exist - meaning their system doesn't recognize restrictions and buildouts on certain vehicles so the customer can add so many options they don't realize what they are doing.

I use 100% integrity in all of our pricing - no games. No gimmicks. But I am extremely aggressive b/c I have to be (major metro area). My pricing stucture gets my foot in the door...then I woo them with personality! HA!
 

colson

Noob
Sep 17, 2009
24
3
6
First Name
Chris
In our group we are eliminating any lead vendor who requires access to our DMS in order to send us leads. Just doesn't make sense to pay a company who then takes your sales data to use against you.

As an industry we have to stand against these tactics. Jeff hit the nail on the head in another post. If you need the traffic, redirect those funds elsewhere. I put these leads at the bottom of the barrel. If I have to buy from these compnies I doing something very wrong.

BTW, who audits companies like TrueCar that they're not actually jockeying the numbers?