TrueCar On Ice In Colorado

by Bertel Schmitt

Published: January 7th, 2012

First fallout of TrueCar.com’s run-in with regulators: TrueCar suspended its service in Colorado. In an e-mail sent to dealers, a Colorado TrueCar account manager told his flock that the suspension is voluntary while TrueCar tries to work out with the state how to “conform to the rules of the road in your state.” In the e-mail, obtained by Automotive News [sub], TrueCar account manager Thuy Adomitias writes:

“We feel comfortable that we will be able to address any regulatory issues by Jan. 17, at which point we will be reactivating our service, including automatically reactivating your account.”

Colorado was not the only state that put TrueCar under the magnifying glass. Regulators and dealer associations in several other states had contacted TrueCar. However, TrueCar did not extend the suspension to other states.

TrueCar said it will comply with all state laws and will change its Web site and methods if necessary.

#BertelSchmitt #Colorado #TrueCar

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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10 of 13 comments

Siuol11.2 on Jan 07, 2012

Could we get a little backstory? This article tells me nothing.

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- Mike1972 on Jan 07, 2012
  
  http://www.thetruthaboutcars.com/2012/01/truecar%E2%80%99s-troubles-could-change-the-way-we-shop-for-cars-back-to-the-past/ This comes from the first clickable link within the story, the red portion "First fallout of TrueCar.com’s run-in with regulators:."
  
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Michael Karesh on Jan 07, 2012

I'm not sure TrueCar understands the meaning of "law." These are old laws. EVERYONE knew about them. But apparently they decided that it's easier to beg forgiveness than ask permission. This is often the way to go, but state legislatures that cater to local interests are probably an exception.

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- Daveainchina on Jan 07, 2012
  
  Let's hope that they can get this laws removed. I like their model of business and it fits the more modern connected world we live in. I think this is one of those things dealers will have to adapt to. One process I always hated was the bargaining process for cars. So many places in American society we don't bargain anymore. Because of this, I think that this really leaves too huge an advantage to the dealer when it comes to bargaining. Too much of the population no longer has much bargaining skill. Times are changing and this is giving customers a way to bargain much more evenly. The dealers that are crying foul play etc.. boohoo they've had it too easy for such a long time. Much like the record industry and everything else, figure out a better method of making profit than fleecing people who can't bargain. I hope they succeed in their business model, but we'll have to see how that goes, I suspect this is going to take years to settle in courts and in the different legislatures.
  
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- Carbiz on Jan 08, 2012
  
  @daveainchina The real issue is that there is no way of knowing what exactly a good deal is. You take the MSRP as the baseline, but the price varies according to supply, demand, time of year, time of the month, etc. Unless your ride is written off and you absolutely need a car NOW, it seems like the variables are endless. Newsflash: there is no way to absolutely abolish those variables. If you want to use a 3rd party, either by paying them directly (as in the invoice purchasing services), or indirectly (by the dealer 'kicking back' to the 3rd party for their service), then knock yourself out. For me, life is too short. Time too valuable. After I've done my research, shopping, etc. to decide which vehicle of the thousands available I want, a visit to 2 dealers and 2 prices when I am ready is just fine by me. Do not believe the shock stories about people who saved 'thousands.' It's like winning the lottery: someone has to win it, but he/she will be one out of a million, literally. There's no magic, only propaganda and urban mythology. Well, that and our 'me-first' attitudes where one bad story emanating from a retail outlet (any retail outlet) and suddenly they are the Source of All Evil in the Known Universe. Gawd forbid retailers made money these days. Give all the business to the internet, by all means.
  
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- Dynamic88 on Jan 08, 2012
  
  @ Daveinchina It sound as if you are contending that Americans don't bargain as much as they used to do in some past era. I'm not sure I agree with that. Seems to me that people do more bargaining now than a generation or two ago. I could be wrong, but that's how it appears to me. If the advantage were with the dealer, why are there so many mini deals now? And why are we constantly reminded that new cars don't make money for the dealer - it's all in the service dept., body shop, used cars, etc. ?
  
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- Pch101 on Jan 08, 2012
  @daveainchina You take the MSRP as the baseline A smart car shopper will use invoice, less holdback and incentives as a baseline.
  
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Dynamic88 on Jan 08, 2012

@carbiz A good deal is a state of mind. You'll never know if I got the same car for a $1 less, or if I paid a $1 more. And all the variables will make comparing apples to apples nearly impossible.

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Stan Esposito on Jan 09, 2012

I agree with people who say the way of buying a car is outdated. I also believe truecar is not the replacement. They take transaction data from their members and sell it to third parties. They charge the dealer $300 per deal. Who do you think pays the $300? They give prices to cars that don't exist they have no inventory of their own but they set prices on everyone elses?

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- Daveainchina on Jan 10, 2012
  
  yup it's outdated but shutting down truecar because of outdated laws is not a good way to encourage innovation in this arena. @carbiz yes I think people in the USA don't bargain well. We don't have the skill/practice at it that people in many other countries do who bargain everyday for everything. Car sales people bargain everyday all day long, that is their job. Bargaining is a skill much like anything else and if you don't practice it, you tend to not be very good at it. Quite simple really. Whether people are bargaining now more than they used to is irrelevant, in general, the average person does not have much practice bargaining so the dealer will always have an unfair advantage here over the average person. Cross shopping is one technique to help, but it doesn't beat simply knowing the average transaction price. We can use techniques to mitigate our disadvantage but we are still at that disadvantage. /shrug I want to see more creativity in how cars are sold, I truly feel the way they are sold now is an outdated model. I think we would be happier to see a new way of selling cars. I doubt though that will happen in the near future.
  
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