AutoNation Dumping TrueCar at End of July
by
Aaron Cole
The nation’s largest auto dealer will stop using TrueCar’s lead generation at the end of this month, Automotive News is reporting.
The split is largely focused on the use of customer information and contract demands. AutoNation CEO Mike Jackson didn’t mince words.
“TrueCar has made some onerous demands in its new contract negotiations with us that are unprecedented in my 45 years in business and are unconscionable and unacceptable. We cannot agree to them,” Jackson told Automotive News.
AutoNation has said they would back away from lead-generation services such as Cars.com and AutoTrader, but the dealer giant hasn’t yet moved away from those services.
AutoNation uses TrueCar at 226 of its 240 dealers nationwide.
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Smart CEO!!! Paying 200-300 bucks per car sold, even if the customer had come to your store w/o prior knowledge of TrueCar...went home after visiting the dealer because they are beta and need constant reassurance on "getting the best deal", and came back through truecar thinking the price would be lower (lmao!!...cannot tell you how many times we had to raise the price on a customer after coming back w/ truecar simply to cover the 300 buck expense or else it'd be a loss or at best a net net). You still had to pay them for a sold car no matter what!!! As soon as more dealers wise up and more customers realize that the TrueCar price IS NOT THE LOWEST you can get...this business model is destined for failure. TrueCar can stick it. The best ones were the truecar idiots that wanted to negotiate from the truecar price set up by the GM...I used to laugh in their face.
What is Derek's friend Krafik going to say and do? Maybe he doesn't get good press on here anymore with the change in management.
Any dealer or dealer group that stops posting their classifieds on Cars.com, Autotrader and Edmunds is suicidal. Outside of search engine marketing and email marketing, it's the most cost-effective marketing tactic a dealer can do. A dealer pulling out of those marketplaces is like a retail clothing store pulling out of a shopping mall, thinking that they can get as many people to come to their own store across town instead. Can it be done? Yes, but only for the right brand with differentiated products (or experience) and deep enough pockets to invest tens of millions. Carmax can get away with it. I doubt very many others could. Fish where the fish are. TrueCar is another matter. They get credit for all of the research that shoppers do on those other shopping sites and then "only" charge the dealer $300 if the person prints off a certificate and buys a car. When consumers realize they can negotiate a better deal on their own, and dealers realize that TrueCar's audience is a fraction of Cars, Edmunds, and AutoTrader, and that those services drive far more showroom traffic, they'll start canceling.
I use TrueCar when car shopping, but not in the way they want. I look at it to see what cars are available. I narrow down the fuel mileage I want and options I want to see what cars are available in my area with (for instance) a brown, diesel, manual transmission wagon between 2005 and 2010 for under $15k. Then I check TrueDelta to make sure I'm not picking a turd. I have not put any of my personal info or email addresses in there.