TrueCar says it is deeply sorry, and it will change the way it is doing business. Bowing to state regulators, TrueCar will change the way it discloses prices to car shopper. And it will change the way it charges dealers, Automotive News [sub] reports.
- Where states prohibit bird-dogging (paying a bounty for a lead that turns into a sale,) TrueCar will charge dealers a subscription fee. At the moment, TrueCar gets $299 for every lead that triggers the sale of a new vehicle, and $399 when a used car is sold. TrueCar will change its billing model in possibly 20 of the 49 states in which it does business.
- When states (like California) allow brokering, but require significant disclosures about the broker’s involvement, TrueCar will go to subscription fees.
- To customers, discounts quoted will be off MSRP, not off invoice. Several states ban the term “invoice” in ads.
- Because some manufacturers object to advertising below-invoice prices on public sites, TrueCar customers will have to create an account and log in.
TrueCar will implement a dealer council for that represents the voice of the dealer.