SANTA MONICA, Calif. — During a time when Autodata reported nationwide industry sales down 12 percent, officials at Zag.com announced the company reached profitability.

According to its second-quarter sales results, the online car-buying site saw an increase of 73 percent year-over-year. Those results were followed by a 77-percent increase in sales when compared to July 2008, and a 25-percent increase in sales over the prior month.

"A culture of accountability and transparency has allowed us to offer a great service, and now, to announce that we've reached profitability," said Scott Painter, chief executive officer at Zag.

"During a downturn, it is helpful to have a product that helps people save money, but in order to be successful you have to have operating discipline," he added. "For us, the most important tenets are having the right people, persistent cost cuts and an accountable culture."

The company reported that consumers have saved $138 million off MSRP of new cars sold based, in part, from "the combination of a very modern approach to auto retail and efficient management by a team of industry leaders."

According to Ray Reilly, general manager of Liberty Toyota Scion Superstore in Colorado Springs, Colo., those savings helped dealers move inventory as well.

"The Zag program has been the best new-vehicle program I have seen, both for the dealer and the customer," he stated.

"As soon as we partnered with Zag, we saw immediate sales growth and our car sales continue to increase month over month. Zag has helped us succeed in what has been a very difficult year for dealerships," Reilly explained.

The company, which provides buying power to more than 30 groups, such as USAA, through a network of more than 2,000 dealers, offers up-front pricing in a transparent environment to consumers who are in-market.

"Our focus is on providing USAA members with a hassle-free car-buying experience that saves them money, and Zag helps us do that," said Tim Booker, vice president consumer lending for USAA Federal Savings Bank.

"Each month, more than 225,000 USAA members use the service to build and research vehicle purchases and find dealers," he related.

Other Zag partners include American Express, AAA, Capital One and Overstock.com.