Category Archives: Data Wars
They came dancing into our lives back in the mid-’90s and totally transformed our industry. In fact, I recall the first time I saw Autobytel exhibiting at the National Automobile Dealers Association (NADA)’s convention. I shook my head and said, “That ain’t gonna happen.”
Well, it did happen, and we all saw a growing parade of competitors in a vicious dogfight to dominate the space. My hat’s off to the few who prevailed.
The real game-changer, however, was Scott Painter and TrueCar. Painter’s business model reflected his thinly disguised contempt for car dealers. Unlike other lead-generation providers, whose primary purpose was to connect car buyers with dealers, TrueCar’s main objective was to set prices and broker deals at a loss for the dealers. We all know how that worked out.
But hundreds of other companies followed TrueCar’s lead and got into the brokering business. But the landscape is rapidly changing, and the paradigm has shifted enough to loosen their stranglehold on dealers.
Read the whole article here on F&I and Showroom.
“There’s a battle outside and it is ragin’” is a line from one of my favorite Bob Dylan tunes, “The Times They Are A-Changin’.” Well, there certainly was a battle raging last month when Consumer Financial Protection Bureau (CFPB) Director Richard Cordray went before the House Committee on Financial Services to deliver his semi-annual report on the bureau’s activities.
We all know the CFPB has been flexing its muscles of late, turning up the heat on dealer F&I practices. So what’s its play?
Let’s go back to 2010, when the National Automobile Dealers Association came storming off of the battlefield beating its chest after successfully lobbying for the dealer exemption in the CFPB-creating Dodd-Frank Act. The industry breathed a sigh of relief.
But by 2013, finance sources and dealers began to realize the CFPB was stepping outside of the Dodd-Frank’s guidelines by targeting auto loans originated through the indirect channel. The strategy was simple: Regulate dealer practices by going after the lenders operating in that channel.
So, is the CFPB making an end run around the spirit of the law without Congressional approval? Well, by asserting that finance sources risk violating the Equal Credit Opportunity Act (ECOA) by allowing dealers to increase interest rates on finance contracts and share in the profit of those markups, the CFPB is claiming enforcement authority.
Read the whole article here on F&I and Showroom.
A recent conversation with a dealer reminded me of that scene in the movie Jerry Maguire when Cuba Gooding Jr. screams into the phone, “Show me the money.” The dealer was sputtering with rage after meeting with representatives from one of these online car-buying sites, which he said was directing his customers to other dealers through its online financing tool.
According to the dealer, the “pricks,” as he called them, claimed the company was not a lead provider. Instead, they referred to their company as an information-based website designed to provide consumers with pricing, aged inventory and market comparisons.
Those reps got one thing right: The company isn’t a lead provider.
Folks, it’s time we take another look at what I think is a major rip-off being perpetrated against car dealers, who are paying these companies to provide low-quality leads they resell to other dealers. In fact, Jerry Maguire should be an example to all dealers. If an alleged lead provider can’t show you the money, then what the hell good are they?
Read the whole article here on F&I Magazine.
Recent events are giving me flashbacks to Jim Ziegler, the hippie, circa 1973. Yeah, I’m talking about the long-haired, bearded, rock ‘n roll deejay.
The Vietnam War was winding down and the country was polarized politically, culturally and philosophically. There was a popular bumper sticker that read: “Love Your Country, Fear Your Government.”
As the country becomes painfully aware of the consequences of the abuse of “Big Data” by formerly trusted politicians, I believe we’ll see the data aggregators regulated and reeled in.
Politicians are targeting citizens with in-depth surveillance. They’re using the IRS and the Department of Justice to punish and retaliate against people with differing political views. The amount of data on private citizens amassed and processed by our government for political purposes is a growing scandal that will not go away.
Read the entire article here at F&I Showroom.
Some dealers think they are paying for exclusive leads when, in fact, they are getting ones that are passed around and re-sold.
A while back, I heard from a dealer complaining about Cars.com’s relationship with a company called RoadLoans. It since has become quite a stir. A lot of dealers have weighed in.
Here’s their beef:
A consumer searching Cars.com clicks a particular dealer’s paid-for used-car listing. A lead is submitted to that dealer. Meanwhile, the consumer is asked if he or she might be interested in RoadLoans financing. If so, click here. But if the inventory-listing dealer is not a RoadLoans client, the lead submitter receives digital marketing about buying vehicles from other dealers who are.
I met with Cars.com CEO Mitch Golub and Vice President Alex Vetter in February, and was assured the situation would be fixed. But it hasn’t been, in my opinion.
The Alpha Dawg talks about the Cars.com issue heating up.
Jim Ziegler and Tim Martell discuss the Cars.com controversy. When a consumer submits a lead on a paying dealer’s inventory, is it wrong for cars.com to feed the consumer the competition’s inventory too?
The Data-Pirates may be at it again. Check and see for yourself. Are renegade vendors putting your proprietary inventory on other websites you did not authorize? Do they have a legal or contractual right to do this?
Jim Ziegler has long been dealer advocate as well as a consumer advocate. In this video Jim expresses strong personal opinions about the recent conduct of Cars.com, a lead generation company in the automobile business. Cars.com, in Ziegler’s opinion, is creating confusion and distrust between their dealers and consumers. From a pure business viewpoint, Ziegler believes Cars.com and other similar vendors are blatantly double-crossing their loyal advertisers and doing the consumers a dis-service. His blog on ADM is receiving thousands of concerned visitors. Jim’s friend Brian Pasch has taken a counter issue in his blogs and videos.