By on March 28, 2016

TrueCar

TrueCar, the prolific third-party car shopping site, is changing the way it does business in the hopes of mending dealer relations and reversing the company’s flagging fortunes.

When TrueCar president and CEO Chip Perry took the helm of the site last December, his stated goal was to make amends with ornery partners and bring the company out of a period of turmoil.

Spending the winter mulling it over, Perry has returned with a plan.

A pledge issued to members of the TrueCar Certified Dealer network on March 27 outlines a laundry list of changes aimed at improving transparency for consumers while bringing dealers onside.

“Our goal is to provide the best value for car buyers and dealers among all third-party automotive sites, but it was apparent to me that there were aspects of TrueCar’s service that were suboptimal,” Perry said.

“It was also apparent that we could make a series of modifications to improve the value we provide to dealers without diminishing in any way our usefulness to consumers.”

At the top of the list of changes is more accurate pricing information for vehicles and more local comparison pricing. Detailed information on dealer incentives will be provided, while estimated pricing from unnamed dealers will be scrubbed. Also, an outside monitor will make sure TrueCar doesn’t play fast and loose with data.

TrueCar’s subscription billing model will also be rolled out nationwide.

Perry said when he took over the vacated post, dealers let him have it, assailing him with their “brutally honest” opinion of TrueCar. That feedback laid the groundwork for the changes, one of which will be to purge the site and its advertising of language that casts dealers in a bad light

The news of the coming changes didn’t have a positive impact on TrueCar’s stock, which sank over four percent the morning after the announcement.

Get the latest TTAC e-Newsletter!

38 Comments on “True to His Word, Chip Perry is Revamping TrueCar...”


  • avatar
    CarnotCycle

    Tough to justify another middleman in the car business.

    • 0 avatar
      highdesertcat

      Over 900,000 USAA members have bought a car with TrueCar’s help, and saved time and money to boot.

      • 0 avatar
        slavuta

        COSTCO membership is $50. You can probably do as well there

        • 0 avatar
          highdesertcat

          Not everybody has a Costco nearby. Nearest one to me is in El Paso, TX, 110 miles away.

          If I want to make up that $50 membership in savings, I have to put gas in my tank to get there and back.

          That said, we are Costco and Sam’s Club members in El Paso, but under the name of the business.

          For individuals who don’t have a business, it is a little harder to justify.

          • 0 avatar
            28-Cars-Later

            Worth the $50 and a drive to save a grand or more on a car, especially on the brands which don’t really negotiate (Subaru comes to mind).

          • 0 avatar
            highdesertcat

            It is for people who have no other options.

            But for those who can qualify, USAA is everywhere, nationwide and overseas.

            Often, local dealers will meet the price of the lowest dealer with a little “convincing from TrueCar.”

            And that is what this article is all about: “TrueCar, the prolific third-party car shopping site, is changing the way it does business in the hopes of mending dealer relations and reversing the company’s flagging fortunes.”

          • 0 avatar
            dal20402

            What’s this about Subaru not negotiating? I own a Subaru that was purchased for over $4000 off MSRP and with a manufacturer-underwritten 0% loan.

          • 0 avatar
            highdesertcat

            dal20402, was it an H6? One of my poker buddies from Timberon told me that NO Subaru dealers discount the H6.

            In fact, they pad them with everything, including the kitchen sink.

            On the H4, you can get those down a serious amount.

            It’s called a “conquest” discount to get you to drive Subaru.

          • 0 avatar
            28-Cars-Later

            @Dal

            You’ve either got some skills or PNW just gives them away. FWIW I didn’t make the purchase and was willing to walk away with that dealer but younger bro was in a time crunch of his own making and pulled the trigger about $400 under msrp. He then bought a $2500 transferable warranty when he picked it up without me being present, much to my chagrin.

          • 0 avatar

            Subaru dealers in New England deal some. I assume in other markets out side their traditional core of NE NW and CO markets they have less dealers who have increasing demand hence less reason to negotiate. Here in CT there are Subaru dealers almost as close together as GM dealers so they have to fight a little. I know my brother got over 1K off MSRP on his Legacy and my neighbor says he got quite a bit off the Imprezza he bought last year(manual transmission)but I imagine they are less willing to deal on Outbacks.

    • 0 avatar
      slavuta

      Exactly!!! Just yesterday my bro was buying Accord. He was shooting for TrueCar value on LX. But salesman told him, we have deals on EX. Apparently EXs are not that hot now. He’s got it $2-large below TrueCar. There we go

    • 0 avatar

      They mention a subscription model in the text. I wonder if they are going to drop the per sale commission and just go to a flat monthly fee? I think this is the better business model many customer now print off a screen shot of true car and walk into the dealer because they can then ask for a couple hundred less and no one pays true car. It really was kind of a doomed model.

  • avatar
    George B

    I never saw much value in TrueCar. I could get good price information from KBB and Edmunds that was consistently lower than the TrueCar price by about $300. Dealers pass the cost of TrueCar sales leads to the consumer.

    • 0 avatar
      SCE to AUX

      I’ll take your word on the price difference. But bypassing the nauseating negotiation process for $300 (~1%) is totally worth it to many buyers.

    • 0 avatar
      S2k Chris

      I’ve “used” TrueCar as a reference for checking prices when researching cars because I get it free as a USAA member, but I’ve never bothered to print the certificate or whatever other BS I’m supposed to do to use it. I just get quotes from dealers and use TC as a common sense check to make sure I’m in the ballpark. I also triangulate on the “what did/should you/I pay” thread on model-specific forums.

      • 0 avatar
        Quentin

        Those “what did you pay” threads drive me crazy. People post the singular line item for what the car supposedly costs on their paperwork, but they don’t list options, trade-ins, fees, etc. Or they list out the door as the price and they live somewhere with 10% sales tax and who knows what registration fees.

        I’m ordering a MINI Clubman S All4, hopefully, this week for my wife and I have to keep a spreadsheet of what each of the 5 dealers has offered for their quote. One will say $500 over invoice but have $700 in doc and dealer fees while another will be $1000 over invoice but only charge $199 in fees. Ultimately, I don’t care what that individual car cost line item is because the overall price is all I care about.

      • 0 avatar
        JonBoy470

        This is the utility of TrueCar for me. It’s another aspect of the deal I can lock down up front. Worst case, I can go down the rabbit hole and print the certificate, so I’ve established the ceiling of what I’ll be paying.

    • 0 avatar
      highdesertcat

      TrueCar doesn’t do this service for free. They get a piece of the pie.

      For many people it is worth it just to be able to show up at the dealership to pickup the car and drive away.

  • avatar
    DeadWeight

    Let me recap:

    “We are now, and will forever be, whores for the auto dealers, while pretending to allow prospective new vehicle consumers to utilize TrueCar as some form of price-leveraging tool.”

    AKA TrueCar is even more useless for CONSUMERS than it even was before.

    • 0 avatar
      DeadWeight

      p.s. – TrueCar is less relevant by the day, as manufacturer-to-dealer volume sales incentive programs start to really put the squeeze on small and midsize dealerships, in massive favor of megadealerships, and as we get closer to the point that 50% of people lease their new vehicles every two to three years on heavily subsidized (by both manufacturer & dealer) leases (floated by unrealistic residual values and cheap money factor).

      I thought the $188 nothing down Chrysler 300S lease a buddy got was as good as it was going to get until my uncle (with the 2014 Cadillac CTS that’s been to the dealer 3x for leaking oil and massive 3.6 liter vibrations, especially at idle, as well as CUE issues) informed me that his 6o something neighbor just leased a loaded 2016 Chevy Impala (the new one, not the classic) for nothing down, $176 a month.

      Either I can’t spot a bubble when I see one forming, or we’re about to see some massive movement in the prices of new and used cars and trucks within short order.

  • avatar
    A09

    TrueCar was completely useless for my transaction last fall. I saved $2,500 off MSRP simply playing dealers against each other over a three-week period. TrueCar was only able to identify $100 savings for the exact same vehicle configuration.

  • avatar
    Pch101

    The business model is inherently flawed due to its payment structure. Dealers will invariably find reasons to gripe about paying a few hundred bucks per deal, even though they pay nothing if the deal doesn’t close or even if it should be obvious that the deal was the result of the service. If those dollars add up, you can bet that they’ll try to weasel out of paying it; in these situations, it’s best to avoid payments based upon contingencies like that.

    Dealers also aren’t crazy about the idea of transparency, so pitching oneself to the world as a service that opens the proverbial kimono is going to grate on those who make a living out of avoiding honestly whenever it suits them.

  • avatar
    28-Cars-Later

    “Also, an outside monitor will make sure TrueCar doesn’t play fast and loose with data.”

    Arthur Andersen is technically still in business, maybe they will get the nod /s.

    • 0 avatar
      SCE to AUX

      +1, and I didn’t know that.

      • 0 avatar
        28-Cars-Later

        From what wiki says, it seems the company got off from the obvious charges due to a technicality in jury instruction and was free to continue business. However the brand was too sullied and it seems to continue to exist to fight legal battles and successfully dissolve itself.

        “On May 31, 2005, in the case Arthur Andersen LLP v. United States, the Supreme Court of the United States unanimously reversed Andersen’s conviction due to what it saw as serious flaws in the jury instructions.[13] In the court’s view, the instructions were far too vague to allow a jury to find obstruction of justice had really occurred. The court found that the instructions were worded in such a way that Andersen could have been convicted without any proof that the firm knew it had broken the law or that there had been a link to any official proceeding that prohibited the destruction of documents. The opinion, written by Chief Justice William Rehnquist, was also highly skeptical of the government’s concept of “corrupt persuasion”—persuading someone to engage in an act with an improper purpose even without knowing an act is unlawful.

        Demise[edit]
        Since the ruling vacated Andersen’s felony conviction, it theoretically left Andersen free to resume operations. The damage to the Andersen name was so severe, however, that it has not returned as a viable business even on a limited scale. There are over 100 civil suits pending against the firm related to its audits of Enron and other companies. Even before voluntarily surrendering its right to practise before the SEC, it had many of its state licences revoked. A new verb, “Enron-ed” was coined by John M. Cunningham, the former Arthur Andersen Director in the Seattle Office, to describe the demise of Arthur Andersen.

        From a high of 28,000 employees in the US and 85,000 worldwide, the firm is now down to around 200, based primarily in Chicago. Most of their attention is on handling the lawsuits and presiding over the orderly dissolution of the company.”

        https://en.wikipedia.org/wiki/Arthur_Andersen

  • avatar
    threeer

    Honest question…how is using TrueCar any better than going through, say, Costco, to buy your car? And as others have said, I suspect that you can still negotiate at least as good of a deal, if not better, on your own. But I get that there are vast swathes of people that would simply prefer to use such a service and avoid haggling with dealers like the plague.

    • 0 avatar
      SCE to AUX

      You just answered your own question. :)

      If you’re willing to let TrueCar do the haggling for you, then that small amount you pay above the ‘best possible deal’ is totally worth it.

      I would consider using such a service next time.

      • 0 avatar
        highdesertcat

        TrueCar doesn’t do any haggling. They determine the dealer with the lowest price offer and steer the business there. Forces other dealers to be more competitive if they want to sell thru TrueCar.

        The sheer numbers of just USAA members alone makes up for less profit a dealer makes. It’s a steady flow of comers.

        But that is what really gores the dealer who don’t get those TrueCar referrals: Lower margins.

        Buyers only show up at the dealership to pickup their vehicle. They drive off Happy Campers.

        For many buyers the fee that TrueCar charges on the transaction is more than worth not having the hassle and p!ss!ng contest with a dealership.

        Don’t knock it until you have tried it. It doesn’t work for everybody, but it works for enough people to make it profitable.

        It’s easy to understand why many dealers hate this process because it really constraints them from upselling options and services on the sale.

        I considered using USAA and TrueCar for my 2016 Tundra but I got a lower price from the guy I had already bought four cars from previously.

        He knew I was good for the sale and the money and he also knew from prior experience he could not upsell me on anything anyway.

        There’s magic in the question, posed to the sales manager, “How much do you NEED to sell this for?”

        • 0 avatar
          SCE to AUX

          @HDC: I should have put “haggling” in quotes or explained myself.

          The process you described achieves the same end (low price) as the haggling process, but without the hassle. And as I mentioned, I would definitely consider it next time.

    • 0 avatar
      brn

      I also question the cost of TrueCar. Personally, I go to a car shopping site (carsoup.com, cars.com, or whatever works in your area), sort by price, scroll until I see the car I want.

      No negotiation required. Markup is around $15, not $300.

      If TrueCar wants my attention, they minimally need to be able to show me actual vehicles. Last time I tried them, I built a hypothetical car for a hypothetical price. They would then have a dealer try and find something similar. What???

  • avatar
    sproc

    Pretty hard to justify at this point when the better dealers seem to get out ahead of TrueCar right at negotiation start. Actively new car shopping the last few weeks, and when I started talking numbers, within minutes, two different dealers of two different makes I’m considering had the sales manager in front of me. They both immediately acknowledged both the TrueCar price and invoice and made very fair, aggressive out-the-door price offers. It was refreshing and about as low stress as these things can be.

    • 0 avatar
      SCE to AUX

      The trick is to find one of those ‘better dealers’.

      I imagine other dealers pooh-pooh the TrueCar price by claiming it’s fictional, and then try to convince you to buy their bloated car/price instead, claiming their deal is ‘real’.

  • avatar
    sirwired

    As a consumer, I don’t see TrueCar as any more useful than the other websites that provide quotes (and are cheaper for the dealer.)

    Even TrueCar’s “Guaranteed Savings Certificate” leaves plenty of room for a dealer to play the usual games (silly fees, trade-in, financing, warranties, the usual.) And that’s only if you have the foresight to get a quote for a vehicle you know to be in-stock. (If the exact car isn’t in-stock, the certificate isn’t binding.) But if you’ve already done that much research to know precisely which cars are in stock, why not request the quote from the dealer directly?

    The last time I bought a car (my wife’s Solara), we went through a local new-car broker and it was great. He landed a deal better than what we had been able to obtain quotes for (namely he got the car for the same price we would have had we driven to a state out of Southeast Toyota’s fee-heavy distribution territory.) I honestly have no idea how he made money on the deal, and that’s probably why he’s gotten out of that business.

  • avatar
    jthorner

    Once again the unpaid contributors have to ask the hard questions and insert much needed skepticism and reasoned critique into what was otherwise little but a rewritten press release.

  • avatar
    SearMizok

    I look at TrueCar and the other sites such as Edmonds, KellyBlueBook, NADS Guides, and come up with a number that I think is the best realistic price I shouldn’t pay more than. Than I stuck to that number, no matter how much the dealer cried, and before he let me walk out of the dealer, I got that number.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Art Vandelay: If they built it new with 30k miles on it and a CPO Warranty then they’d find a market
  • cimarron typeR: There was a kid in HS whose dad daily drove a silver Avanti, even in the winter in SW Missouri....
  • 96redse5sp: I agree completely about the second generation Corvair. For my money, the most beautiful American car...
  • Ryoku75: “If it raises the value of older cars, even better. It might convince those with a passing interest...
  • Russycle: No ’65 Mustang love?

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber