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If the question here is if we agree or disagree that the lawsuit has merit or not then I would tend to think that it does not, based on the limited information available. I have not read the complaint but their claim that a customer can buy a car without negotiation using TrueCar sounds valid. It is also valid to say that a customer can buy a car without negotiating without TrueCar. This lawsuit is likely retribution for the fees that they begrudge TrueCar for charging on top of the tremendously unprofitable deals that they have to agree to in order to be competitive and I truly wish them luck. Selling new cars is hard enough without feeling like there is yet ANOTHER third party standing between you and your customer. Unfortunately, this model reminds me of the Hydra from Greek mythology whereby cutting one of its heads off will just prompt another to grow in its place. This trend can be reversed if we as dealers can make our showrooms and our websites the easiest place to get information. Customers flock to these sites for the vague promise of a price that is so low that nobody can do better. Most dealer websites require a form to be filled out to get this information (which is also what TrueCar requires in order to "register") but the customer gets to feel like they are "beating the house" which satisfies their emotional need to win. At some point, a dealer needs to determine what the threshold is for a deal that they will not pursue and stick to it. Too often I heat the justification for taking a bad deal as "I wanted to move a unit" and I understand the ways that the total deal value needs to be considered but its easy to exploit this rationale and find yourself so far down the rabbit hole that your only friends are a Cheshire Cat and a caterpillar smoking a hookah.
If the question here is if we agree or disagree that the lawsuit has merit or not then I would tend to think that it does not, based on the limited information available. I have not read the complaint but their claim that a customer can buy a car without negotiation using TrueCar sounds valid. It is also valid to say that a customer can buy a car without negotiating without TrueCar.
This lawsuit is likely retribution for the fees that they begrudge TrueCar for charging on top of the tremendously unprofitable deals that they have to agree to in order to be competitive and I truly wish them luck. Selling new cars is hard enough without feeling like there is yet ANOTHER third party standing between you and your customer. Unfortunately, this model reminds me of the Hydra from Greek mythology whereby cutting one of its heads off will just prompt another to grow in its place.
This trend can be reversed if we as dealers can make our showrooms and our websites the easiest place to get information. Customers flock to these sites for the vague promise of a price that is so low that nobody can do better. Most dealer websites require a form to be filled out to get this information (which is also what TrueCar requires in order to "register") but the customer gets to feel like they are "beating the house" which satisfies their emotional need to win. At some point, a dealer needs to determine what the threshold is for a deal that they will not pursue and stick to it. Too often I heat the justification for taking a bad deal as "I wanted to move a unit" and I understand the ways that the total deal value needs to be considered but its easy to exploit this rationale and find yourself so far down the rabbit hole that your only friends are a Cheshire Cat and a caterpillar smoking a hookah.
