By on July 13, 2015

AutoNation CEO Mike Jackson

Automotive News has interesting insight into the tenuous, and now soon-to-end, relationship between TrueCar and car dealer-giant AutoNation.

The report details a May lunch between TrueCar CEO Scott Painter, President John Krafcik and Senior Vice President of Dealer Development Mike Timmons, and AutoNation COO Bill Berman and Chief Marketing Officer Marc Cannon. At the lunch, TrueCar executives reportedly said they would require data from all AutoNation sales — regardless if they were generated by TrueCar — for the two companies to continue doing business.

“Over my dead body,” AutoNation CEO Mike Jackson said later, according to Automotive News.

Last week, when Jackson announced the split between AutoNation and TrueCar he laid most of the blame at TrueCar’s “unconscionable and unprecedented” demand for more than 40 data points for each car sold at AutoNation. AutoNation sells more than 550,000 annually at its 240 dealerships across the United States.

The dealer said roughly 3 percent of its sales can be attributed to TrueCar leads, which it charges $299 and $399 per new- and used-car purchase. AutoNation said it pays TrueCar around $550 per sale, for which TrueCar unjustifiably takes credit. TrueCar said internal auditing revealed that they were responsible for nearly 7 percent of AutoNation’s sales.

“We know exactly the degree to which AutoNation underreported,” Painter said. “It’s massive.”

“Customers go many places before and after a TrueCar visit, and just because they were momentarily on the TrueCar site doesn’t mean I should have to pay them $300. So there’s a big disagreement there,” Jackson said.

In a May 23 letter to Berman and Cannon, TrueCar specifically outlined the customer data it was seeking and said it was already “firing” dealers who failed to comply.

“In the trailing 12 months, TrueCar suspended over 300 dealers who did not meet marketplace or customer requirements. We are prepared to take similar action here should AutoNation elect not to follow our marketplace requirements,” the letter states.

TrueCar’s request for data included customer’s names, addresses, phone numbers and e-mail addresses in addition to data on the newly purchased car.

Dealers have said turning over such extensive data could lead to privacy concerns and enable TrueCar to steal customers in the future.

AutoNation said it would start up its own portal for customers similar to TrueCar, and would back away from third-party vendors in the future.

 

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20 Comments on “Report: TrueCar Drew Hard Line with AutoNation Over Data...”


  • avatar
    George B

    I briefly checked TrueCar before determining that their prices were higher than those reported by KBB and Edmunds. Contacted an AutoNation dealership directly by email and got an in-the-ballpark price fast. Other dealers contacted the same way wasted my time with high initial prices or dealer extras buried in the fine print. Walked in to AutoNation and was able to negotiate to the Edmunds price in about 20 min. The negative was that AutoNation wasted time trying to up-sell me lots of crap after the out-the-door price was negotiated.

    • 0 avatar
      Sky_Render

      The last new car I purchased was significantly cheaper than the TrueCar price. TrueCar is fine if you don’t want to have to haggle, but a little wheeling and dealing can get you a better deal.

    • 0 avatar
      brn

      My parents bought a minivan through TrueCar and they enjoyed the experience.

      When I was shopping (one car about two years ago and another about one year ago), I looked at TrueCar. They let me build an imaginary vehicle and set an imaginary price that was subject to change. That imaginary price was higher than I could find on local car shopping sites. Personally, I saw zero value in their service.

    • 0 avatar
      VenomV12

      TrueCar is the most worthless site I have ever visited, I rarely saw a price on there I couldn’t beat in a negotiation or that was literally listed for less in ads. A truly laughable site.

  • avatar
    carguy

    This is a win for the customers of AutoNation. TrueCar’s demand for the personal data of all customers should have any thinking twice before buying a car from any of their affiliated dealerships.

    • 0 avatar
      sproc

      I think calling this a win for privacy is misleading. There’s nothing to indicate that AutoNation or TrueCar’s security or personal data usage policies are any better or worse than the other. Not having extra copies on TrueCar’s servers is only a marginal improvement. This is mainly a p!ssing contest over commissions and another loss for price transparency in auto buying.

      • 0 avatar
        carguy

        I don’t think anyone is thinking that AutoNation’s move was in any way motivated by customer privacy and not money. However, I can’t agree with your assertion about the privacy policies. Dealer selling or giving away customer data to a third party generally puts it well beyond any agreement of consent that the customer may have had with the dealership.

        • 0 avatar
          sproc

          You might look closely at the last purchase or lease agreement you signed to see if what, if any, data sharing you opted out of, consciously or not. Ideally, you’re reading everything carefully, but it’s hard when you’re initialing something for the 37th time. Regardless, there’s an awful lot they can share without your permission. The FTC has a very good primer here:

          https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-privacy-rule-auto-dealers-faqs

  • avatar
    Eliyahu

    Autonation would do well to improve their vehicle search tools on their dealer sites. For example, you can’t search by exterior color.

    As to TrueCar, the big problem that I see for TrueCar is that the dealers will price the car per the TrueCar price, but then add on about $2,000 worth of paint protection, window tinting, etc. These are all added as part of the prep before the cars hit the lot.

    So if I don’t want all the extras, I have to fight that battle, not TrueCar. This seriously diminishes the value of TrueCar.

    Anyone know how the Costco program compares? Or does it just make more sense to email the dealer once you’re picked a car.

    • 0 avatar
      runs_on_h8raide

      The Costco program is superior. Whatever car you pick, the dealer has to show you what the invoice is and sell it for the pre-negotiated price +/- invoice. Expect hot or limited production cars to more often than not be excluded. I’ll give you a real life example….say you’re interested in a Subaru Forester…you go to the Costco official dealer in the area and whatever Forester you pick out, you will get it for $300 below invoice. Domestic brands might be more off, I wouldn’t know, check with your official Costco dealer. Oh and get this…at least in my area…Costco disallows dealer prep fees.

    • 0 avatar
      brn

      Darn near everyone needs better search engines. I picked up my car two years ago. I hate black interiors, as I find them confining. All of the cars I was looking were predominately black interiors. I was more than tired of pulling up manufacturer stickers for 20 cars to find the one that had a light interior.

      While I’m at it, dealers need to stop with the constant popups (or moving subwindows) as you navigate their site. Repeatedly annoying a potential buyer is a good way to get that buyer to go elsewhere.

    • 0 avatar
      ixim

      The Costco price is OK. Their dealer was far away. All the dealers I showed it to were willing to match it. My local Chevy store beat the Costco price handily.

  • avatar
    indi500fan

    I’ve seen Mike Jackson on a bunch of biz shows.

    He comes across as a savvy guy, and one you definitely couldn’t intimidate at the negotiating table.

  • avatar
    Jimal

    “In a May 23 letter to Berman and Cannon, TrueCar specifically outlined the customer data it was seeking and said it was already “firing” dealers who failed to comply.”

    Firing a customer who is paying you for a service. That is some damn fine mental gymnastics. Damn fine.

  • avatar
    dbcoop

    I bought my last new car (a Nissan) and made the dealer match the True Car price. I didn’t actually buy the car through True Car. I traded in a car and got my price on that but I probably paid a bit more for the convenience of a one day transaction. I don’t know if it’s still as easy to get the True Car pricing data but it’s a good resource when you’re negotiating with a dealer. It’s basically just market rate including any trunk money / manufacturer incentives. No extras were tacked onto the price either but they did do the hard sell on the extended warranty, alarm and financing all of which I declined. Based on my internet research the True Car was pretty competitive for my area (Southern California.) I’m sure if you spent hours e-mailing every dealer in a 100 mile radius you could probably save a few more bucks.

  • avatar

    You get what you pay for. If you do not want to haggle or spend days searching the car you use Costco, True Car or private negotiator. In all cases you spend around $300 extra compared the best deal you can get by doing it yourself. It is a convenience – the service – so it costs money. If you think your time and health does not cost money or you have fun dealing with dealers directly – then you do not need this service. Truecar aggregates dealers so you do not spend time negotiating with every dealer in your area. When buying last car I needed to do it within couple of hours since I was extremely busy with the new project with the approaching deadline. So I skipped human negotiator factor and went with Costco and Truecar. Within 2 hours I finalized the deal via Truecar – Costco had less dealers and Truecar dealer offered me the exact the car I wanted with price lower than both Costco price and Truecar recommended price, like $1000 less. I spent more time signing documents than finding car and finalizing price. One of Costco dealer were offering me exactly the same car (VIN number match) I bought later for $1000 more from Truecar dealer. It was not listed on their site but was listed on Truecar dealer site so he was going to bring it from the dealership I bought it from and add $1000 to price.

  • avatar

    All you need to know about TrueCar is that their customers are NOT consumers, they are dealers. If they help dealers make money, they have a business. If they don’t their customers, the dealers, give them the boot. In the meantime, consumers don’t know or care what a dealer needs to make. They’re not likely to understand it anyway. Anything that appears too good to be true, probably is.

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