Yet another question about TrueCar sentiment

[JD Rucker]

This has been covered a million times I'm sure. I hate asking for further input but I've never really concerned myself with them until now. After reading an interview with the CEO, I'm starting to have concerns. Is this common? What do dealers think about TrueCar? Friend? Foe? Please post your thoughts. I think it's time for me to chime in on the discussion but I want to get some feedback from the industry first. Thank you in advance for your comments.

 

[skutchhenks]

I feel like there could be several hundred threads about Truecar on here, maybe not that many but I'm just tired of even thinking about them.

Here's a recent thread with some good for and against points: http://forum.dealerrefresh.com/threads/truecar-sued-by-dealers.4352/

I'll sum up my feelings below...

>>>Jerry Thibeau said: ↑
These are customers that would be dealing directly with your dealership instead of using TrueCar as the middleman.
Baffles me that nobody gets this!<<<

You got it! That line right there is TrueCars business model in a nutshell. They get in the middle of a dealer and their natural local customers, and then they charge the dealer $300+ for the sale. Think about that for a moment. I gotta admit it's a genius business concept. I feel ashamed that there are dealers out there that are so desperate to use TrueCar and they are literally killing their bottom line doing so. TrueCar is not your friend Mr. Dealer, they are a like a blood sucking lamprey.

 

[craigh]

Dealers that don't use TrueCar will tell you that it sucks because it's taking away their gross, their bottom line, their roof and their first child.
Dealers that use TrueCar will tell you they like it because, even though the gross is sometimes lower, they're getting deals the other guys aren't getting because they aren't willing to cut gross.

I don't think you'll get a definitive, emotionally-vacant response here, but I can tell you that there's people on both sides of the fence.
I personally know 3 dealers that use TrueCar and love it and have embraced the formula and have made it work for themselves. Now that Dealers gave them a footing I don't think they're going to disappear anytime soon.

 

[craigh]

>>>Jerry Thibeau said: ↑
These are customers that would be dealing directly with your dealership instead of using TrueCar as the middleman.
Baffles me that nobody gets this!<<<

Anyone who posts your inventory, your logo, your name, your address or your phone number is representing you to potential customers.
This certainly isn't something that TrueCar is unique in doing. Sure they take a fee too, but again there are dealers that sell at TrueCar's price, pay the TrueCar fee and still make money. There are also dealers that know that gross isn't always in the front-end and sometimes you cut a deal to gain a customer.

My personal questions that need to be looked at with TrueCar:
- Do TC customers stay for service?
- Do TC customers spend some of their savings in the "back office"?
- Do TC customers travel further for a good deal, thus decreasing the chances they will come in for maintenance?
- Do TC customers have a higher closing rate with a lower level of effort on the part of the dealership?
- Are you able to gross on the trade-in if they're getting too good of a deal on the purchased car?
- Do TC customers tend to tell their friends to contact the dealer directly or do they recommend their friends also use TC?
- Do dealers ever lose money on a TC deal, or is the gross just smaller?
- Would you have been the dealer to sell to these frugal customers if TC didn't exist?

I'm pretty sure that Joe says that customers enjoy the dealership process and the haggling, but that won't be a universal opinion and TrueCar is there for those that want nothing more than a good deal. They don't need red carpet treatment, they would rather buy the car online entirely if they could.

My advice is if you're going to go ahead with TrueCar, train one or two sales people in the proper way to handle these customers and deals. They aren't like every other lead and they shouldn't be handled that way.

^ 100% personal opinion - I'm neither for nor against TrueCar, but they exist and are doing business so I don't waste too much breath complaining about it.

 

[csabatka1]

I personally believe that Cox Automotive is far worse for the industry than TrueCar. They're building such a monopoly within the customer facing and dealer facing sides. I used to work in a company whose model was very similar to Cox Automotive where it was a one-stop for all dealerships (trucking, ag, construction dealers). Once we got them on the product, we added to the offering, charged more and made it impossible for dealers to drop advertising, the CRM system, their websites, etc. With all eggs in one basket, you're at the mercy of that business.

 

[craigh]

I personally believe that Cox Automotive is far worse for the industry than TrueCar. They're building such a monopoly within the customer facing and dealer facing sides. I used to work in a company whose model was very similar to Cox Automotive where it was a one-stop for all dealerships (trucking, ag, construction dealers). Once we got them on the product, we added to the offering, charged more and made it impossible for dealers to drop advertising, the CRM system, their websites, etc. With all eggs in one basket, you're at the mercy of that business.

Sounds like AutoTrader.ca

 

[ed.brooks]

Which interview @JD Rucker?

I think this one is my favorite...

 

[JessicaRuth]

I believe a wise person once said - "You can't put a company in between the consumer and the dealership, you just can't."

 

[Alex Magnan]

It's such an enigma IMO because we've seen pretty decent gross on our TrueCar customer's when looking at the sold ROI over the past few months. But then you look at the cost of sale per. Once someone submits a lead through TrueCar, regardless of wherever they started or went during their shopping, they take all the credit and charge full boat.

With that said we are the only Honda dealer in Rhode Island that shows up on TrueCar. The other closest dealers are in Southern MA and CT. So market share is in our favor when customers are shopping and see our store come up.

We have staff/management that is on both sides of the fence.

 

[ryan.leslie]

I'm sure most have seen the news that AutoNation will be discontinuing its relationship with TrueCar at the end of July. Jackson of AutoNation has said what many here have been thinking. Here are a couple clips from the article:

• TrueCar executives have told AutoNation they want the companywide transaction data for an audit function, Jackson said. TrueCar would then compare its database with AutoNation’s database and look for a match, so they could bill AutoNation for that sale. That alone is problematic, Jackson said. AutoNation argues that TrueCar is trying to lay claim to some sales generated by its competitors and AutoNation’s own marketing efforts. “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,” Jackson said. “So there’s a big disagreement there.”

• “Let’s face it: TrueCar is a competitor,” Jackson said. “TrueCar has made it quite clear they’re not stopping at new-car sales transactions. They’re going to inject themselves into the arrangement of financing, they’re going to have a service product, they’re going to have a trade-in product. So they’re going for the entire spectrum of the auto retail business.”

http://www.autonews.com/article/201...g-contract-dispute?cciid=email-autonews-blast