True Car Creating Tension with Dealers

True Car has been at odds with many dealers for some time now. True car offers used car pricing information to customers by partnering with dealers who are willing to become “True Car Certified” in exchange for pricing information on their used car sales. They are in the market of offering customers reassurance that they have not overpaid for a used vehicle. By providing pricing information to customers, True Car’s services are reducing profit margins for dealers on used cars, which is a major source of profit for dealers due to the already small margins on new vehicles. Dealers who reject the service in order to preserve their margins are at risk of losing skeptical customers.

Recently True Car has been plagued with lawsuits from dealers claiming that the pricing information that they provide is false. They claimed that True Car was undervaluing used vehicles and killing dealers profit margins.Many dealers split with True Car leaving only 3734* certified dealers in 2012. Auto Nation split with True Car, only to return to using their services in 2017. When Auto Nation split with True Car it offered its own pricing services which promised customers a quicker purchase. While customers seem to be pleased with True Car’s services, dealers are naturally fed up. More information to the consumer means less profits for the dealer. Used cars make up a big portion of the profit for most dealers. Losing these margins could be catastrophic for many dealers in the industry. Dealers are coming together and making their voices heard that they will not be bullied by True Car. It is unclear how this battle will play out. If enough dealers drop the service then True Car will not have enough information to be a viable service, but if more dealers buy into the service, dealers who refuse the service may be left behind in the market.

http://www.autonews.com/article/20150601/RETAIL/306019954/dealers-vs.-truecar%3A-the-saga-continues

http://www.autonews.com/article/20160502/RETAIL07/305029964/autonation-truecar-kiss-and-make-up

2 comments to True Car Creating Tension with Dealers

  • greenj18

    In my eyes, both parties are at odds over their principle targets. Tru Car is all about ensuring customer happiness by giving them a reliable report of the state of a car (preventing dealers from selling lemons) thanks to dealer information which the dealers supply. But the dealers are sort of split on whether or not Tru Car is helpful. The report gives consumers a better sense of confidence and makes them less hesitant but it also lessens the dealers upper hand by giving the customer more information about the product. This hesitancy of dealers to give all the information and Tru Cars determination to find out everything about a car simply wont work together.

  • wheelers19

    If I was a dealer, I would have no desire whatsoever to work with a scam like TrueCar. Though they claim to help consumers, they raise prices by adding another cost to the car buying process that is transferred onto the buyer. There are enough regulations in the industry as is to deter reputable dealers from selling lemons on their own.

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