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Cursing the Internet

With TrueCar drawing the ire of some dealers, the editor wonders if the rest of the industry is beginning to share his long-held contempt for the Internet.

January 17, 2012

I’d like to address all of the hoopla surrounding TrueCar. But before I do, I want you to know that I, as a journalist, hate the Internet. I’ll admit that I’m on it all the time — at work, at home and on my phone — but I would love nothing more than for the world to boycott the web. Why, you ask? Because I still hold a grudge against the Internet for what it did to an industry I’ve wanted to be a part of since I was a kid: the newspaper business.

Recently, a colleague of mine sent me a link to “Paper Cuts,” a blog the St. Louis Post-Dispatch’s social media editor uses to list U.S. newspaper layoffs and buyouts. According to the site, at least 3,755 newspaper jobs were eliminated last year. And that’s a good year compared to 2009, when the site says 14,825 of my brethren were handed a pink slip. Now, the blogger doesn’t blame the Internet, but I do.

See, online news turned my industry into a volume business. You lose if you can’t keep up — even if it means sacrificing quality reporting. That’s why I can appreciate the fight some of you out there have put forth to stop TrueCar in its tracks. That’s not to say I agree or disagree with your calls to action, but I can’t help but recognize you for doing something my industry failed to do when the Internet imposed its will.

And I have to say, calling on states to investigate TrueCar and the dealers using its service was genius. But you didn’t stop there, did you? Now you’re calling for a federal investigation of data aggregators. I don’t think TrueCar saw that coming, but I’m not sure the rest of us did either.

See, you’ve created a nice storyline for me to follow, but I’m an industry journalist. My job is to advocate for you, so the story I’d tell wouldn’t be critical of the industry and dealers. I can’t say the same for my buddies in the newspaper business. That’s why I just want to say, be careful how you defend the showroom, because voluntarily calling on regulators to investigate our industry could really backfire on us.

And hey, it only takes one article to bring about new regulations. That’s what’s happening in California after a series of articles in the Los Angeles Times spurred two lawmakers to introduce two separate bills aimed at imposing new regulations on the buy here, pay here business. I wrote about the articles, the first of which was published on Oct. 30, last month, and it took less than two months for lawmakers to react.

And that’s why I can’t help but get nervous when I read claims that TrueCar dealers are scamming customers through bait-and-switch tactics and other questionable practices. I mean, if I was a regulator, I would be wondering why dealers have so much control. I’m not saying your claims aren’t true; I’m just saying be careful what we’re putting out there and where.

But I get why you’re angry. You’re already being pressured to improve the customer experience, and doing so requires major investments in training and technology. You also have manufacturers asking you to upgrade facilities and add customer amenities. And how are you supposed to do all that when your margins are under attack?

But how many TrueCars are you guys willing to fight, and at what cost? Because my sources say there are copycat sites getting set to launch. Look, the Internet is here, and, as the music industry, car audio and bookstore industries found out, there’s no way to stop it.

So, let me repeat: I’m a reforming hater of the Internet. I didn’t go quietly and I don’t expect you to either. But I am learning to live with the Internet. I do have to think differently, do what I do differently and, most of all, I have to continue to learn new strategies for winning on the Internet. It’s difficult, but it’s doable.

Comments

  1. 1. Vivian Arroyo [ January 17, 2012 @ 12:43PM ]

    Greg, I really like your story and so true you have to be careful what you ask for because yes it can backfire.

  2. 2. Patricia Wood [ January 19, 2012 @ 06:18PM ]

    Greg, I like your story and actually see both sides to this issue. The Internet is great for the consumer, however True car and others use pricing of manufacture's cost not dealer cost. There is a difference if the car they are looking at does not have say a roof rack. The manufacuture can place that on a car at the plant for a lot less than the dealership can. Yet the consumer thinks the dealer is cheating them, again that is because of the greed of the industry. That same greed and cut throat is why a select few are still making money and cheating many hard working sales personel and managers out of pay. You see when they can't make it from the consumer they take it from the dealership personel: Sales persons, service writers, mechanics, all the way down to the cleanup guys.

    If you really want ot know what goes one go get a job as a sales person and see who really gets hurt in this business.

    I could write a book on the owner and uppermanagement greed in that business that have destroyed lives, credit and confidence of some very good people. There has been no protection for them either, many dealerships are still non compliant with so called government laws.

  3. 3. Frank Martin [ January 20, 2012 @ 10:43AM ]

    Greg, great blog. I understand the wave of technology that affects us all. We either sink or learn to swim. It is unfortunate however that an affiliate who supposedly claims to be a partner to the dealer, does not work in the best interest of the dealer. I don't think there would be as much conflict between the dealer and Truecar if it was more of a mutual benefit. TrueCar gets their $299.00, the customer gets their ridiculous price, and the dealer along with all the hard working dealership employees, get screwed. Perhaps if the business model was tweaked a little to compensate the dealer fairly, everyone would be content with at least making a living and no one would complain. The profit margin on new vehicles starts out fair averaging 12% mark up. Obviously everyone wants a better deal, and although the auto industry operates on one of the lowest margins of any industry, it appears no one is happy unless the dealer walks away without the shirt on his back. In this case, it takes three to tango.

  4. 4. howell clark [ January 25, 2012 @ 02:17PM ]

    greg great story ,life always changes and you either crawl in a hole and takes what falls in for sustenance or you go out and learn how to conquer a new skill or feeding area as our cavemen relatives did. Texas put the breaks on non franchise sales many years ago and the truecar type of deal would be much harder here.
    patricia i feel your pain and personally know of the harm that can be done . hope you don't get blasted like i did with comments from some F&I guys when i pointed out some bad actors in the a couple of dealerships i worked at before going solo. the truth sometimes won't win you many friends.

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  7. 7. Jimmy [ March 09, 2012 @ 07:48AM ]

    I love the internet and It also makes my head hurt at times, all I have to say on this is that I needed my audi repaired and i did google <a href="http://canddautorepairs.com"> foreign car repair </a> and I found a good shop and it saved me money over going to a dealership!

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