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Scott Painter, who founded the online vehicle-buying service CarsDirect.com in 1998, is returning to auto retailing.
But the 37-year-old entrepreneur, once an archrival of car dealers, now works with them. He says his new company, Zag.com Inc., will help dealers cut their vehicle marketing costs.
Zag offers an online version of the fleet discount programs that dealers have established with credit unions and auto clubs. But Painter says his company, which launches in mid-June, will operate on a broader scale.
The Santa Monica, Calif., company has formed alliances with such large lenders as Capital One Auto Finance. Zag ultimately wants to handle most parts of vehicle sales online, including electronic contracting and vehicle registration.
Unlike many brokered deals, the dealer sets the vehicle price in a Zag transaction. Typical Internet...