TrueCar sued by dealers

[Tallcool1]

@Jeff Kershner Thank you for the clarification. It has been 4 years since I have been in the franchise side of the business. I appreciate you pointing me in the right direction!

@amirxl I apologize for my ignorance. You are exactly right in your explanation.

 

[ed.brooks]

This is the TrueCar response to the complaint:
TrueCar Response to Recent Lawsuit
(March 10, 2015) —
At TrueCar, Inc. we have always been committed to improving the car-buying process for consumers and industry participants. We are proud of our relationships with our dealer partners, who share our commitment. Our industry outreach efforts in this regard have included the formation of a dealer council, bringing on key industry veterans and other efforts to expand our relationships with industry participants.

We are aware that a law firm purporting to represent approximately 117 non-TrueCar dealers has filed a lawsuit against the company. It appears that these dealers responded to a website sponsored by that law firm encouraging dealers to join in bringing claims against TrueCar. The lawsuit challenges the company’s advertising practices and asserts that we compete unfairly with non-TrueCar dealers. We believe the lawsuit is meritless.

To put this in perspective, TrueCar recently eclipsed 9,000 franchise dealers in its Certified Dealer Network, or nearly 1 out of 3 of all franchise dealers in the U.S. When combined with independent dealers, there are nearly 10,500 TrueCar Certified Dealers nationwide. The number of TrueCar Certified Dealers has nearly doubled in the last two years and we continue to add new dealer partners at a record pace. These dealers are committed to providing a new car buying experience to consumers grounded on truth and transparency and consumers have responded by purchasing more than 1.7 million cars from TrueCar Certified Dealers, including more than 600,000 in 2014. Today more than 4% of all non-fleet U.S. new car sales occur using a TrueCar platform including the auto-buying programs we operate for USAA, Consumer Reports, AARP and hundreds of others.

At TrueCar, we take compliance with all laws very seriously. We have invested substantial resources in our compliance efforts, and we have proactively engaged in dialogues about our business model with various regulatory authorities and dealer associations across the country. We have high confidence that we are compliant with all laws applicable to our business, including those referenced in this litigation. We will defend the lawsuit, and our business practices vigorously and we expect to be fully vindicated.

Notably, no consumers are parties to the lawsuit. Consumers come to TrueCar because our platform provides real-time, upfront pricing information, and our Certified Dealers are committed to a better consumer experience. Indeed, we believe our compelling consumer value proposition is a central motivating factor behind the lawsuit.

We do not intend to comment further on this litigation. We are proud of the service that we deliver to our users, participating dealers, affinity partners, and manufacturers. We look forward to continuing our work with our dealer partners to make car-buying simple, fair and fun.

 

[yagoparamo]

The DOL in many states reports the sales price of vehicles which they know by the taxes paid on the sale. In WA it cost about $8,000 to set up the data and then a nominal fee to the state to get a feed each month.

I personally don't see any problem with a company finding data and putting it to good use to create a new business model.

The problems that I see with TrueCar is to promote a false negative image of the automotive industry and using that to leverage an advantageous situation for their product. This is the creation of a false need. But just like they did before, they can also learn, change their ways, and continue to have a flourishing business.

 

[ddavis]

When are the rest of the dealers going to wake up and realize TrueCar is not your friend? Now they have partnered with a finance company and it's only a matter of time before they offer service contracts. Be no place left for dealers to make a profit. The more TrueCar makes, the more they advertise. The more they advertise, the larger their customer base grows. These are customers that would be dealing directly with your dealership instead of using TrueCar as the middleman.

Baffles me that nobody gets this!

I saw this LendKey /TrueCar association on the news and figured that it would make it to a thread. Jerry, I'm glad you have remained consistent with your view of TrueCar.

I can remember when the worst insult you could direct towards another Carguy would be to call them "weak". I've seen people go to blows over this. Any GM that signs up for this (on the $300 new and $400 used, per sale basis), allowing them access to their DMS, is WEAK! They simply do not deserve to be in that position.

 

[skutchhenks]

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.

 

[skutchhenks]

Any GM that signs up for this (on the $300 new and $400 used, per sale basis), allowing them access to their DMS, is WEAK! They simply do not deserve to be in that position.

Spot on! That makes me laugh, I say this to DP's all the time. If they are going to do something that stupid, then where else are they burning your money Mr. Owner?

 

[sryan]

This whole lawsuit just makes me LOL. Like C'mon. Sorry a company created a product that consumers want! People want transparency and don't want to go to 6 dealers to get a price with everyone beating it by $100 so they get an upfront price right from the start. This is what consumers want and I'm still baffled by why car dealers think they are the devil.

I personally blame everyone that was in this business in the 70's and 80's for them even being in existence.

 

[ddavis]

This whole lawsuit just makes me LOL. Like C'mon. Sorry a company created a product that consumers want! People want transparency and don't want to go to 6 dealers to get a price with everyone beating it by $100 so they get an upfront price right from the start. This is what consumers want and I'm still baffled by why car dealers think they are the devil.

I personally blame everyone that was in this business in the 70's and 80's for them even being in existence.

We have found a consumer advocate! Did you go to business school? If they are teaching that a good business model is to lose $1500+ to sell a car and another $300 to a third party for the privilege, they need to shutter that place.

Everyone that ever bought a car, did so, because they got a good deal. To most of them, that is about invoice. If that was actually true, every dealer in America would have been out of business decades ago.

 

[Jeff Kershner]

TrueCar says "whatever"...

TrueCar Slams $250 Million Dollar Lawsuit As “Meritless”

More here - http://drivingsalesnews.com/truecar-slams-117-dealer-lawsuit-as-meritless/

 

[craigh]

and yet there are still dealers making a profit through TrueCar and laughing all the way to the bank.
Sure, their business model isn't to help you maximize your gross, but it doesn't mean you can't make money.

When are the rest of the dealers going to wake up and realize TrueCar is not your friend? Now they have partnered with a finance company and it's only a matter of time before they offer service contracts. Be no place left for dealers to make a profit. The more TrueCar makes, the more they advertise. The more they advertise, the larger their customer base grows. These are customers that would be dealing directly with your dealership instead of using TrueCar as the middleman.

I understand that you hate TrueCar, but this comes across as a fear of competition. I feel like this is the anti-Tesla argument again.
The reality is that you're blaming TrueCar, but it's the equivalent of blaming McDonald's for making people fat. Dealers chose to use TrueCar and they are at fault. If it works for them, then they aren't even being screwed. I just don't think the solution is beating them all over the head with a stick just because their strategy is working for them and is helping them steal business from their competitors.

I'm trying to understand, but I just feel like I can copy/paste anything in there and it would be the same argument.
If we all stop using AutoTrader their prices will go down.
If we all stop using Cars.com it will take away their leverage.
If we all agree to never sell cars online we can maintain our sales areas and get along forever.
If we all stop offering CarFax we can go back to customers not knowing about car damage.

I apologize if that's too harsh, but I've had conversations with more than one dealer that's happy on TrueCar and managing to turn an ROI while gaining perfectly viable service customers.