Zag - Truecar Changes Fee Policy

Spencer Gardner
I've found out a little more on the subject: Zag wants us to pay more because we have a lot of customers that submit leads through other sources before their website. What that means is that our write-off rate is too high. They say the national write-off rate is 5% and ours is 20%. Without directly saying it, they just want more money. I actually had our area director tell me that a customer that was on our showroom on 3/28 and submitted a Zag USAA lead 3/29 should cost us $300 because they were responsible for bringing the customer back to the dealership. Apparently they have no concept of be-backs. We have a unique market (Boise), there aren't many competitors per brand (about 3 dealers per brand) and competing markets are 6 hours in any direction. We typically receive leads first from our own site or the manufacturer.This leads to customers submitting a large amount of duplicate Zag leads. Our Zag rep and area director tell me that they are going to be more subjective when reviewing our write off's because we are writing off in the 20-30% range, when 5% is more normal. I have confirmed with the only other competing Zag dealer in our area, that they still don't receive pushback from Zag when submitting write-offs because they don't do that many Zag deals. Moral of the story: if you get a high amount leads of original leads from other sources before Zag, your write-off rate will be high and Zag will start turning down your requests.
Steve Duff
We have a very large percentage of duplicates where Zag is the duplicate. Much more than 5% and probably higher than 20% but so far they haven't protested. The minute they do however, we would just cancel. One thing the rep didn't tell you about that be-back is that you probably lost gross due to them finding the Zag price after they left your lot which was most likely lower than the quoted price. Sure they may have contributed to the be-back, but at what cost?
Spencer Gardner
After speaking with one of Truecar's directors, he told me what they're doing internally. Apparently, Truecar hasn't had any internal policy for write-offs. They realize it costs them money and are trying to do something about it. I am also told that Truecar has agreements setup with their partners (i.e. USAA) where Truecar pays $110/sale regardless of lead origination. This Director tells me that he is personally going to put together a written policy that will go before their Dealer Council for approval. He agrees there needs to be something that is black-and-white. However, still no resolution on those 6 deals I mentioned earlier.
Tom Cole
TrueCar just raised our monthly rate by 50%. They have gone back to the policy where they take credit for your current customers. It's an interesting thought to say the least. We've used it as a transparency tool only to have them raise our rate and try to convince me I should pay them $300 per sale for leads I already own. More hardball tactics from a group that was almost run out of business a year or so ago for breaking everyone's trust and state laws. We left them when the State of Ohio said their billing policy was illegal and came back after they came up with a compliant billing process. Loyalty means zero to these guys. Shake down time!

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