By on July 25, 2015

truecarprice

TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting.

The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share.

Painter said a lack of marketing was to blame for the company’s struggles in the second quarter, not the recent highly publicized split with AutoNation.

Painter said the revised earnings would lower their overall revenue for the year around $20 million to $30 million this year.

In addition to fewer consumers buying fewer cars through TrueCar, the company said spending on its mobile platform and weak marketing. True car said it lost $15 million in the second quarter of this year.

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52 Comments on “TrueCar Shares Plunge on Missed Earnings Call...”


  • avatar
    stuki

    Truecar is one of those things that work really well for users, as long as said users are a small minority. It then allows dealers to move excess inventory quickly and cheaply, and to people preselected to be price conscious and “clued in.” Once “everyone” is in on the act, dealers will have no choice but to be more conservative with the offers they make, rendering the process less of a boon to users than it was before.

    Until we are no longer stuck with the silly, oligopolistic dealer franchise model, there’s only so much fat to squeeze out of the distribution link in the chain. the early days of Truecar, allowed a disproportionate share of that squeeze to benefit early adopters, but with increasing mind share, those days are over.

    • 0 avatar
      George B

      Near as I can tell, TrueCar is just another stupid middle man that adds about $300 to the cost of buying a car. In a world where most car buyers carry a portable computer with internet access, consumers will find a way to squeeze that extra cost out of the transaction and tell other consumers that a lower price is possible. Welcome to the world of internet-powered disintermediation.

      http://pjmedia.com/blog/what-would-the-one-word-to-a-graduate-be-today/

    • 0 avatar
      DeadWeight

      Truecar is one lame a$$ service, and I can consistently get discounts 30% to 60% over and above “the Truecar” price quoted.

      Truecar is a service for shrinking violets who have no skill at nor desire to engage in true, hardcore negotiations.

      That said, auto dealerships are scumbag parasites who exist in the form that they do only by the grace of paying off state legislatures and buying protected class status, keeping them from having to engage in true competition and keeping themselves immune from more complete, truer capitalist pressures.

      • 0 avatar
        timwjackson

        That’s some serious hate you have for the dealers, DeadWeight. The franchised dealer network actually works very well for consumers in most every way. Dealers provide diverse inventory close to home, talented service and repair facilities and workforce, offer discounted finance terms from multiple sources, discount new cars well below MSRP, compete for trade-ins, generating consumers top dollar for trade and removing challenge for consumers to find retail buyer. And they do all that for less than three percent on overall cost of operation. Henry Ford knew he had his hands full in designing, building and keeping cars competitive in he marketplace. Foor all the same reasons i worked for Ford and GM in 1908, it still works for all volume manufacturers today. Where’s the beef?

        • 0 avatar
          stuki

          Inventory close to home isn’t really some panacea for all buyers. In many/most Euro countries, many more cars are ordered from the factory. For some buyers, available inventory is obviously great, but why ban other distribution models? The response from much of dealerhood to Tesla’s direct sales, is pretty much dead on “Scumbag” behavior, per any reasonable meaning of that word. Non-scumbags, in all walks of life, live-and-let-live. They don’t meddle-and-try-to-kill.

          Dealers acting in accordance with the principle of maximum scumbagness, don’t mean they are necessarily scumbags themselves. They’re just doing their job, which is to keep their business alive and profitable. The problem, as always and everywhere in our progressive Dystopia, is that harassing others under guise of “the law” is one of the options on their table for doing so. Which they then have to take, lest they lose out competitively and fail at doing that job. Hence, while railing at dealers may be fun, getting rid of laws, lawyers and governments, is the only meaningful solution. Duh!

          • 0 avatar

            I offer ordering to close to 80% of my customers. Out of 150 cars or so per year I order maybe 10. While I think it makes sense, the American public doesn’t want to hear about “waiting”, even when I tell them that they’ll get better rebates when their order comes in.

          • 0 avatar
            stuki

            Frantz,

            10/150 is still a sizable number of cars.

            Also, by the time people are already at the dealer, they are there because they expect to buy a car. If everyone who built their own car on a manufacturer website, were immediately presented with an option to click on “buy now”, or “online dealer” or “local dealer”, I bet a significantly larger proportion would avail themselves of one of the two first option. Not all by any means, but many more than what you are experiencing.

            Then throw in groupon type aggregators, which would work much more efficiently on an undivided national market, etc., etc.

            Noone ever benefits from having their choices artificially restricted. Some do, however, benefit from having others’ choices artificially restricted.

        • 0 avatar
          healthy skeptic

          @timwjackson

          While I don’t share DeadWeight’s hate for car dealers, I do resent their protectionist laws. Let’s go over your points.

          >> Dealers provide diverse inventory close to home

          And manufacturers can custom-build you exactly what you want. Both are legitimate options. Why should one be outlawed?

          >> talented service and repair facilities and workforce

          So can manufacturers, or they can authorize third-party shops to carry out warranty work on their behalf. Or…they could have franchised repair-only centers. Still not a reason to outlaw direct car sales.

          >> offer discounted finance terms from multiple sources

          So can manufacturers. Plus it’s easier than ever to line up your own loan before going to buy, which is what I did. *Still* not a reason to outlaw direct sales.

          >> discount new cars well below MSRP

          With manufacturers, you can sidestep all that hassle, go right to the source, and buy at invoice, or close to it. Why is this illegal?

          >> compete for trade-ins

          True, dealers might have an edge here, but it should be the consumer’s choice, not the law’s.

          >> it still works for all volume manufacturers today

          Then for crying out loud, why do we need that system enshrined in law? If all you say is true, it should do just fine on it’s own.

          >> Where’s the beef?

          I think my beef is pretty clear.

          • 0 avatar
            Pch101

            Direct sales will result in higher prices.

            If retailers don’t compete against each other, prices go up.

          • 0 avatar
            Jimal

            Not to mention that direct sales would mean less outlets. Some areas of the country with dealerships now won’t have outlets because they won’t be cost effective for the manufacturers.

          • 0 avatar
            timwjackson

            @HealthySkeptic:

            While I don’t share DeadWeight’s hate for car dealers, I do resent their protectionist laws. Let’s go over your points.

            TWJ: Dealers provide diverse inventory close to home

            HS: And manufacturers can custom-build you exactly what you want. Both are legitimate options. Why should one be outlawed?

            RESPONSE: Appreciate your more rational and thoughtful tone, for sure!! Most franchise laws, that I have seen state-by-state, were written for consumer protection v dealer protection. In fact, all that I am aware of have their preamble targeted for protecting the consumer with one of the largest purchases he/she will make in his/her lifetime. To the extent that dealer investment in bricks and mortar, land, buildings, inventory, personnel, tools, education for staffing, insurance, signage etc…. that is pretty common with all industries and/or professions. At least those that carry tens of millions of investment per rooftop (location) are generally afforded some level of guidelines so their investment can some assurance of longevity and success. Each state is different in how that is handled and what is included. Ultimately, it is intended to help a consumer have a reasonable expectation that a dealer is going to be there tomorrow, next week and next year after they pay out tens of thousands for a motor vehicle. Obviously nothing is ironclad, but policy-makers have historically worked to ensure if/when a brand or manufacturer (or both) pulls out of a market, or shutters entirely, that someone is still on car row to keep the car going, handle warranty (if possible), recalls, etc…. Without some level of clarity, investors, bankers, entrepreneurs, capitalists, are not likely to pay out $15 to $30 million, per rooftop, for a retail facility.

            TWJ: talented service and repair facilities and workforce

            HS: So can manufacturers, or they can authorize third-party shops to carry out warranty work on their behalf. Or…they could have franchised repair-only centers. Still not a reason to outlaw direct car sales.

            RESPONSE: Sure, they could. In some places they probably could now. Though what I hear from representatives of auto manufacturers that it makes much more sense to keep sales and service in one location and same facility. I do not hear much about those selling direct having trouble building service facilities or contracting with independent service providers, though it may be a challenge in some places. Actually some volume automakers are starting to authorize multiple service centers under their sales and service agreements. If the question is “should auto maker be able to contract with independent service provider in same market that they have valid and current sales and service agreements in place, I think that is a problem for the person who built the $15 to $30 million facility. Don;t you? By the way the $5 to $30 million is conservative amount for many of today’s modern, state of the art facilities. It is not uncommon for the high end to be well north of $50 million!

            TWJ offer discounted finance terms from multiple sources

            EJ: So can manufacturers. Plus it’s easier than ever to line up your own loan before going to buy, which is what I did. *Still* not a reason to outlaw direct sales.

            RESPONSE: Really? You think any automaker with a captive finance arm, in a factory-owned store, will offer competitors loans v those of the captive arm? Really? If was XYZ Motor Company and had a retail operation to sell cars and had a captive finance arm, 100 percent will be placed with the captive arm. Couldn’t blame them….they’d have to find some way to pay for all the bricks and mortar. Most auto retailers have as many as 25 to 30 finance source options available. And it is the retailer’s interest AND the consumer’s interest to get best rate. If they do, they can sell more car and consumer can buy more car. That seems very basic in economic theory. Surprised if you really see that different. If so, how? By the way, consumers CAN (and should) shop for credit on their own. When shopped, auto retailers almost always win the finance arrangement since they have the ability to discount below typical rate, based on volume financed.

            TWJ: Closing this post out so I don’t lose it…will try to get back on the rest of your thoughtful points.

          • 0 avatar
            timwjackson

            @HealthySkeptic:

            I had the remainder of your points answered….but screen blinked and lost it all. Will try to respond soon though may be a few days. No I’m not usin an Apple computer. Though I have a iPhone 6-Plus, I don;t consider it close to comparison with cars on distribution or service. More later, hopefully.

        • 0 avatar
          DeadWeight

          Like I said, the parasites & primordial scum that are auto dealerships (no businesses rank worse on the scum/slime factor; down there with payday lenders & title shops) could not exist without specially sanctioned protection from true free market economic forces in the form of specifically, highly favorable state level statutory authority, compliments of bought off state legislators.

          This is a fact.

          If such favorable laws didn’t exist, essentially subsidizing and even allowing auto dealers to collude and price fix, they’d have to compete in the same way that other retailers do (extremely competitive marketing, pricing, service, etc.).

          Auto dealers are puss filled, infected cysts that need to be lanced & drained.

      • 0 avatar
        runs_on_h8raide

        Agree with all of the above.

  • avatar
    dwford

    Dealers are realizing that TrueCar is an expensive way to advertise only to get zero profit business from smug hard to please customers.

    • 0 avatar
      Lack Thereof

      1) Dealers don’t always care about the profit on individual cars, it’s more about meeting monthly sales quotas to get manufacturer bonuses.

      2) Truecar isn’t in financial trouble for a lack of dealer participation, the problem is a lack of customers.

      • 0 avatar
        dwford

        The dealers pay for leads from TrueCar. It’s free for the customers

        • 0 avatar
          stuki

          They’re charging only for closed sales now, I believe; not leads. It’s a good service for simplifying customer access to information about sometimes slightly different products and prices that may be spread over a wide swath of dealers. As its customers almost definitionally make their vehicle choice solely based on online research anyway, it doesn’t hold a candle to what AmazonCars.com could be, but the latter is banned for lack of contributions to our collective leechocracy, here in the Land of the Formerly Free.

    • 0 avatar
      runs_on_h8raide

      @dwford…very true. These are same ones that will slam the dealer and sales rep in the CSI score surveys as well, even after catering to their every wim. I know so many people that tell the internet dept if they came in on truecar…pass them to someone else. They wind up costing the dealer in the long run.

      • 0 avatar
        JD23

        “These are same ones that will slam the dealer and sales rep in the CSI score surveys as well, even after catering to their every wim.”

        Are these the same sales reps who implore customers to give all 10s on the customer surveys, regardless of the quality of service performed? I have had to threaten to reduce the score by one point each time the survey was mentioned to eliminate the droning emanating from the imbecilic sales reps.

        • 0 avatar

          I feel you JD23, but just FYI, CSI is about the most outdated part of the car industry IMO. I work at Ford and for us now a 4/5 is not an 80%, but must lower. The sales guys is likely paid in part (or bonus money based on) CSI. It’s not as simple as “did you like your salesman” but the question of “overall experience”. Sure, if we suck, like a waiter, we may not deserve the bonus. But if we did our job well and you had to wait 3 hours for finance, we hate it as much as you do, like a waiter waiting for the kitchen. The kitchen doesn’t get a tip, so they don’t care. You can’t attach someones livelyhood to a survey and expect honest results. Some dealerships just submit fake emails, or bribe customers with oil changes in order to have them come in an fill out the survey “together”.

          • 0 avatar
            ajla

            “But if we did our job well and you had to wait 3 hours for finance, we hate it as much as you do, like a waiter waiting for the kitchen.”

            If you make a customer sit around for three hours staring at the wall, then I kind of do put that on you.

            When I bought my car last year, it was taking a long time to process something (they claimed they were “backed up”) so my sales guy put a dealer plate on a car, gave me a Subway card, and told me he would call once everything was ready to go.

            The dealer I bought from overall was fairly average, but the individual sales person I had was awesome. If he is still around the next time I’m buying, I’ll definitely be going back to him. I’ve also sent two referrals his way this year.

          • 0 avatar

            I agree. I don’t let my folks sit around and am not trying to make excuses. Some folks wouldn’t be as accepting as you were of time constraints.

  • avatar
    Pch101

    True Car’s flaw is in its revenue model.

    According to an Automotive News article from a few years ago, the average lead costs about $18. When you consider how few leads get converted into sales, True Car should seem like a pretty good deal.

    But customers (in this case, the dealers) are tempted to cheat when it comes time to save the $350 that it owes to True Car. Instead of comparing the $350 or whatever to $18 leads that often go nowhere, they compare True Car’s fee to zero.

    Dealers should assess True Car based upon whether it increases marginal profit. But many will be inclined to make the same mistake as those who post in the comments section of this website, and simply focus on the cost.

    Any deal that is designed to share profits on contingency is subject to this type of cheating, bad feelings and gaming. Those who owe the money get greedy instead of appreciating that the other party who is working with them is sharing in the risk and deserves to make something.

  • avatar
    ravenchris

    I wonder how much TrueCar pays Consumer Reports per lead, how does that revenue model play out?

  • avatar

    TrueCar is gone. This company is burning cash so fast that it will need bankruptcy protection soon.

  • avatar

    True Car offers a better deal to the consumer, charges the dealer $300 for each sale, and requires access to all the sales data from every dealer participating in True Car.

    For dealers to turn over all the sales data to True Car is increasingly becoming a contentious issue.

    Is the consumer getting a better deal, or a $300 True Car fee added to a dealer’s average deal for a specific model.

    • 0 avatar
      stuki

      When helping people shop for cars, the biggest gain we have gotten from using truecar, is in finding which segment vehicles currently happen to be discounted the most. If someone is 100% rigidly set on one specific make/model/options, it doesn’t take the world of negotiation skills to match a truecar offer.

      But if one is open to pick an F150 XLT over the Lariat or XLs bracketing it, or perhaps a Hyundai over a Toyota, truecar is a quick, centralized way to see where the discounts are in ones closest markets. And, as discounts generally reflect slow moving inventory, this indirectly helps dealers as well.

  • avatar
    Madroc

    TrueCar’s problem is the challenge of monetizing information. Once upon a time it was really useful and even included information that wasn’t widely available, like factory-to-dealer incentives, but they did’t have a good way to charge for the service. That went away when the profit model depended on selling leads to dealers, and their “invoice” numbers started including add-ons like advertising fees.

    The upshot is that the TrueCar pricing model is probably better for dealers than the alternative because it’s based on actual sales data so they can tell people they are getting a “good deal” even when they are paying $500 above invoice. I for one don’t care how much other people paid, if your best number isn’t at or below (real) invoice I’m going to email it to every dealer within 50 miles and invite them to beat it. No “negotiating” necessary. TrueCar offered a lot of consumers an interim position that was better for the dealers.

    • 0 avatar
      Pch101

      Dealers aren’t fond of transparency. I suspect that they are more fond of Edmunds’ approach, which pushes a market average figure (its TMV figure) rather than what is supposedly a rock bottom price as does True Car.

      In a way, the dealers have a point. True Car essentially wants to be a car dealer that doesn’t have to hold inventories or own stores. It wants some of the profit without the customary investments. Combine that with its desire to have information symmetry that dealers would rather keep to themselves, and True Car can’t reasonably expect the dealers to love them — in many respects, True Car is a rival, not a partner.

      • 0 avatar
        hreardon

        Agreed on all parts. The transparency issue is getting better thanks to the readily available information via the internet, but it all boils down to the old addage: “A good deal is whatever you think one is.”

        • 0 avatar
          stuki

          “A good deal is whatever you think one is.”
          Sounds like a good mantra for “sign on the dotted line”, high pressure sales tactics.

          The goodness of a particular deal only holds until you gain better information……

          The increased ease of information gathering enabled by the internet, has, and should continue to, work to reduce the possibility for later rediscoveries. But the sales sharks are, as they are wont to, doing their darndest to drag the taxfeeders into the game, helping them keep things murky.

          • 0 avatar
            hreardon

            Stuki –

            What does “perfect information” look like?

          • 0 avatar
            stuki

            hreardon,

            It would look like math/logic.

            And properly conceived, deductive, economics. As opposed to the woefully imperfect empiricism that’s peddled under that banner these days.

            Not particularly applicable to car buying, either way. “Better” information does apply, though. There are degrees of imperfect, after all. Pretending a customer is just as well off/got just as good a deal by paying $2000 more, simply because the rug was pulled over his eyes, at best straddles the fine line between ignorant and plain dishonest.

  • avatar
    hreardon

    The issue here is that TrueCar has convinced itself (and investors) that the aggregate market wants a flat price, no-negotiating model for new car sales. In reality, there is a *segment* of the market that desires this model, but time and again consumer actions prove that on the whole, they’re not interested in this model when there are a few dollars to be saved.

    I’ve said it before and I’ll say it again: if you don’t want to haggle, just pay the price on the window stick under the “MSRP” header and be done with it.

    My issue with the dealership model is their lock-step control over state legislators to prevent direct sales and other competition.

    Even then, were direct sales made legal, I don’t think we’d see mass consumer adoption of that model, either.

    I’m continually amazed that consumers think nothing of paying MSRP for jewelry, furniture, clothing – all with markups ranging from several hundred to close to 1,000%.

    • 0 avatar
      brn

      You don’t need to haggle. You just need to shop around. Pull up your favorite car buying web site and start searching. There are some very good deals to be had with advertised prices. These are the sites that are charging the dealer $18, so the uptick is negligible.

      We bought our last vehicle at a no-haggle dealership. The price was very fair. They were upset when we turned down financing, extended warranties, and all the other fluff.

    • 0 avatar
      Madroc

      The reason people pay list price of other retail goods is that the pricing information is transparent, so consumers can easily price-shop and market forces drive pricing down to a competitive level. Nobody marks up the price of a shirt to some arbitrary figure that everyone knows to be well above the market price, and then says “come in when you’re ready to buy and we’ll make a great deal!,” all the while hiding the ball on actual selling price until the very last possible second. When a shirt has a price tag on it, you know that that is the price the retailer is willing to sell at, and you can easily look to see if another retailer is selling the same shirt for less, and buy it there instead — unless the higher-cost seller offers a better value proposition, but ‘premium experience’ and ‘car dealer’ are rarely used in the same sentence. And of course, many retailers do price-match, run price promotions, honor sale prices on prior purchases if you ask nicely, etc., but that’s a different discussion.

      But again, there’s never a need to haggle. Just do a little research ahead of time to find the bottom of the market for your car, offer to buy at that number, and present that offer elsewhere if the first place responds with anything other than “yes.”

      • 0 avatar
        Pch101

        Consumer electronics have inflated MSRPs that nobody pays.

        Consumers haggle on cars because cars are expensive and they know that they can.

        In some cultures, everything is negotiable. I’ve haggled over the price of a bottle of water, cab rides and meals in developing countries. (Once, just for sport, I haggled with an Indian merchant over the price of an umbrella that was carrying a price tag of less than $2. He treated it like a real haggle.)

        It is possible to haggle on all kinds of goods, but most consumers are apparently unaware that they can negotiate those prices. I miss Circuit City — they were happy to negotiate if you wanted them to.

        • 0 avatar
          Madroc

          Most retail goods have inflated MSRPs that nobody pays (and yes, consumer electronics in particular) but the actual selling price is displayed right alongside it. Usually the first is called the “original price” and the second a “sale price,” even when it’s totally laughable because the “sale price” is the only price anyone ever paid. And because the actual selling price is clearly marked, a consumer can easily see if it’s cheaper elsewhere, so market forces keep pricing in line and force retailers to adopt leaner, more efficient business models.

          • 0 avatar
            Pch101

            The “actual selling price” is what both parties choose to accept.

            If you’ve already decided that you aren’t going to haggle on suits, musical instruments, furniture, cameras, AV/home theater equipment, etc., then yes, that asking price will be the “actual selling price.” But that is only because you as a consumer (foolishly) decided to not negotiate.

          • 0 avatar
            hreardon

            Madroc –

            Again, not that I’m advocating the model, but I would argue that the selling price is indeed listed on every car window sticker: MSRP. If you want a discount you need to ask for it. If you don’t want to ask for a discount, you don’t ask and pay more.

            I get your point though – why can’t this be more like consumer goods? This isn’t like produce or (non branded) clothing where a five pack of Hanes tee-shirts can be purchased at CVS, Macys, Target or WalMart. Whether we want to admit it or not, cars, like houses, are emotional purchases; Otherwise we would all be living in 750sq ft. two bedroom apartments and driving Carollas.

            It’s not dissimilar to buying a house: the listing price is often times not the selling price, but it’s a point from which to begin the negotiation. From that point you can adjust your offer based on how quickly comparable homes are selling in the area, amenities (or lack thereof), and the need of the seller to unload the house.

            Dealers know better than most what the local demand for a product is. I recall back in ’99 that everyone wanted silver Volkswagen Jettas and Beetles. There was a limited supply of silver Jettas and Beetles and so if you wanted one, you paid more than for a black, red or green one. On the flip side, we couldn’t give away red and green Passat wagons yet we were flooded with them. We’d whore those out to anyone who even blinked in their general direction.

          • 0 avatar
            Pch101

            In America, we don’t typically over t-shirts and cans of soup because (a) the consumer decides that he can’t haggle and (b) we often end up buying things from major retailers who hire staff to be order takers, not negotiators.

            Basic rule of thumb: If you are buying at a store where the owner is close by and/or your assistant is paid bonuses and commissions, then you can almost certainly haggle. And you should.

        • 0 avatar
          hreardon

          PCH –

          Unless you go to the Apple Store where the price is what the price is. Every now and again they’ll toss in a little freebie, but that’s rare. You’ll see some 3rd party retailers who sell Apple products list for a few dollars less, or bundled with some goodies, but again: rare.

          You move to a direct sales model for automobiles and I would put money on the same thing happening there: expect deals at one time of the year only: model year clearance.

          • 0 avatar
            Pch101

            Yes, I forgot to mention Apple, which manages to charge very high prices while making people feel good about it. It’s hard to imagine that consumers believe that this be-nice-to-you-in-exchange-for-maximum-price system actually helps them.

          • 0 avatar
            healthy skeptic

            @hreardon

            It’s true Apple Stores have a set price. It’s also true that their prices are expensive, given that they offer premium products along with a hefty markup.

            However, you don’t have to buy from them. That’s why Windows and Android and countless PC manufacturers compete with them, offering products that usually aren’t as good but are definitely cheaper.

            Furthermore, nothing is stopping any company from stepping up its game and gunning for Apple’s high-end market segment. That’s the real reason Apple’s prices are so high–they don’t have any real competition in their segment (premium phones, tablets, and computers). It has nothing to do with whether they sell direct. As an example, Best Buy also sells Apple’s products–but for around the same price. There’s a middleman that isn’t doing anything to drive down prices. Indeed, how can it?

        • 0 avatar
          stuki

          Most non-car (and non-fresh-food) purchases are available online at rock bottom prices for those who don’t want to haggle, yet still want to get as much as they can for their money. And this is a huge segment of buyers for most goods.

          Truecar was/is aiming to provide as close an approximation as possible of this, overlayed over the legally mandated franchise model. But make no mistake, Truecar is in no way, shape or form the ideal way to serve that market. Just perhaps the least unideal way, that doesn’t get them thrown in jail for providing their customers too good a buying experience.

      • 0 avatar
        hreardon

        “the reason people pay list price of other retail goods is that the pricing information is transparent, so consumers can easily price-shop and market forces driving down to a competitive level”.

        Okay, but there is transparency in pricing on the auto retail side of things if, like with shirts, you accept MSRP as being the price for the product. There’s no hiding of the selling price – it’s listed on the window sticker.

        You’re right about shirts – what they do instead is have inventory clearance sales at the end of the season, or retailers will have regional sales based on demand. The mere fact that, say, Banana Republic can and does offer 35%, 40% and 70% sales on their merchandise shows just how great the margin is on their products. Do you ask to see the invoice price for your shirts before buying?

        I agree with the statement about Edmunds mentioned earlier: I think that providing a ‘range’ based on zip code is where the market is headed, very similar to real estate purchases: you can research what comparable houses in that zip code have sold for in the past year to get a good range.

        There are essentially three types of buyers:

        1. The person who cannot, does not, or will not haggle because they hate it. This person pays full MSRP for the convenience of not haggling, or uses a service to avoid negotiating.
        2. The person who doesn’t want to feel like they paid too much – for this person, having some knowledge of what others have paid and falling within that median will make them happy. They pay the goldilocks price.
        3. The person who cannot tolerate paying more than $.01 more than the next guy and needs to be able to tell people they got the ‘best deal’; This person will fight over $5 and willing to admit to it or not, likes that.

        TrueCar is aimed primarily at the #1s above, Edmunds is perfect for the #2s, and the #3s are a complete pain in the arse for any retailer.

        • 0 avatar
          el scotto

          I’m so glad to be a #3. You and your competitors will price the same exact consumer good at wildly different prices. Tell me oh no, the invoices are different. The three vehicles I’ve been researching have the same exact invoices/options. Tell me your next lie. But my dealership add special items to the invoice to enhance the consumer experience! A naked college-aged woman had better be delivering those special items to me. Daily. IF not, they’re not special. Hreadon car care for life!; that’s worth over 1500 dollars over the life of your car!!! I pay my rides off early and can’t wait until I can leave this cesspool of a city. Another quasi-lie that is neither here nor there. Especially when I think your service writers are thieves with clipboards; “Sir, your battery is 6 months old and due to go out at any time!!!” Me; “It has a 60 month warranty, so that’s 4 and half years to go. Yes, I did that complicated math in my head”. Service Writer; “But Sir Hreardon can install a new battery at the discounted rate of $568.73 since you’re in the Hreardon El-Supreme-O, Chairman’s Circle, Most Loyal Premier Customers club.” Me, “I get my oil changed and the free car wash. I also check my oil before I leave, since counting out 6 quarts take both hands for some technicians.” So yeah, you won’t get mush sympathy with this crowd

          • 0 avatar

            You do realize that the invoice cost of a vehicle changes thoughout the year with the same options right? This year on SuperDuty trucks it was around $900 difference from an early production to late production. Folks like you get okay deals, but most of the time you either pay more than you think, or you’ve spent so much time dotting all your i’s and crossing your t’s that you have to make less than minimum wage for the efforts to have been worth while, and you’re still not happy. I get where you are coming from and am not seeking sympathy myself, but unless you worked in the industry to actually know the smoke an mirrors of different states and different dealerships it’s hard/impossible to really navigate. Someone who just builds a good relationship with their dealer will be happy with the deals and have a far better experience, and have someone to go to bat for them if someone comes up.

  • avatar
    Jimal

    Lack of marketing? If I see another ad with that hipster guy with the beard and the glasses talking about how he’s “really into this car, but how do I know I’m getting a good deal”, I’m gonna hurl. TrueCar’s problem is not lack of marketing.

  • avatar
    jim brewer

    Not just car dealer model that has anticompetitive aspects. Just one of the most visible.

    Our whole economy is turning that way. Antitrust law is a dead letter in this country.

    Consequently, us air and American airlines are allowed to merge and airfares to mid size cities dramatically rises. The pols figured they would give their friends a hall pass and nobody would notice the extra $100 bucks. Repeat that in two dozen industries and you have a real problem.

    • 0 avatar
      stuki

      It’s not “allowing” that is causing this country to go down in flames. It’s banning. As in banning all and anyone from jumping in and competing with the two mentioned airlines: No questions asked; no insurance blah, blah; no gate restrictions etc., etc. Just let it rip, and overcharging becomes pretty much impossible.

      All the industries where the government is involved in any way, shape or form, are the ones where costs are spiraling out of control. Which is pretty obvious, since when dimbulb-in-chief and his starry eyed and stupid acolytes decide it sounds good to have a “public-private dialog or partnership”, he/they inevitably invite executives at currently dominant companies in the industry he/they are about to dialog with. And, being dim and all, are equally surprised every time, that said execs may in fact recommend things that are good for executives of currently dominant companies in their industry.

      It’s simply a croc all the way. Just get the restrictions surrounding anything whatsoever, including most, or perhaps even all, of IP, out of the way, and things will just sort themselves out, one way or the other.

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