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Sweeping changes include a more balanced advertising approach,revised billing model in some states, consumer membership program, and formation of a Dealer Advisory Council
Santa Monica, Calif. – January 16, 2012 – TrueCar, Inc., which is devoted to bringing innovation to the car buying process, today announced a nationwide, multi-faceted strategy totackle regulatory compliance issues and demonstrate its commitment to stateregulators, state dealer associations and to better serve its dealer partners. Among other changes that are taking place nationally, TrueCar implemented a new flat fee-billing model in the Commonwealth of Virginia, which has been OK with flat fee billing since January 2001. This change marks a significant step in TrueCar’s ongoing compliance strategy. TrueCar’s proactive modifications will include introducing a new billing model in certain states, adjusting advertising presented through the TrueCar website, establishing a TrueCar National Dealer Council, and launching a new consumer membership program.
TrueCar announced this initiative as part of a “listening tour” by senior company executives that included visits with key constituents including dealer groups, dealer associations and manufacturers across the nation. “These meetings have been incredibly constructive. We are in the business of innovation. As such we have to embrace change as part of what we do,” said Scott Painter, Founder and CEO of TrueCar, Inc. “The feedback we have received, both good and bad, will enable us to better serve our dealer partners, and the industry overall. The changes announced in Virginia are a great signal thatcollaboration with state regulators can result in a constructive outcome for consumers and dealers.”
Compliance is an essential element of TrueCar’s mission. TrueCar has been engaged in discussions with regulators in several states regarding its fee structure and/or advertising issues. TrueCar is responding immediately to any state concerns as part of a comprehensive national strategy, with a goal of achieving 100 percent national compliance. In the meantime, TrueCar has voluntarily suspended service in Louisiana, Colorado,Nebraska and Oklahoma in order to make certain changes to improve TrueCar’s service and to protect its dealer partners. The company expects to have certain changes implemented in January. “TrueCar’s dealer partners are central to our success and ensuring compliance is the foundation of TrueCar’s strategic commitment to dealers. We will not put our dealer partners in jeopardy,” said Stewart Easterby, Executive Vice President of TrueCar, Inc.
Subscription Billing Model To Be Rolled Out Nationally
Most states have some version of either bird-dogging or brokering laws on the books. TrueCar is taking a proactive national approach to this business model issue, shifting to a subscription-based billing model in those states where there is potentially an issue. For example, in California the company will be voluntarily and immediately commencing work on implementing its subscription-based model.
Over the long term, TrueCar will continue to work with state regulators in an attempt to identify ways to update existing laws and regulations to take into account innovation made possible by the digital age. These innovations include the ability to help dealers achieve accurate performance metrics for their marketing spend and 100 percent visibility into their partners’ performance.
Dealer Management System (DMS) Data Practices
TrueCar is committed to maintaining the highest data standards including limiting the collection of information. TrueCar does not sell dealer DMS data and does not use dealer DMS data for any purpose other than matching vehicle sales to customer leads and monitoring performance to enhance TrueCar’s service to its dealer partners. In addition to only collecting information with dealers’ permission, TrueCar is committed to working with dealers to enhance dealers’ control over access to and use of DMS data, including limiting the fields of data that are received from DMS to those fields necessary to perform the sales matching function.
Changes to Address Advertising Issues
TrueCar will implement important changes to the website to address certain advertising issues. As part of its commitment to its dealer partners, TrueCar will alsodevelop new messages that focus on important dealer attributes, like proximity, selection and service rather than simply price. “Bottom line is we’re out listening and talking to the industry. What we heard is that dealers feel our ads focused on price and did not tell a positive enough story about our dealer partners. We’ve listened to their concerns and are making adjustments. Qualitative considerations that drive purchase other than price will have greater prominence in future ads.” said Stephen Hansen, President of TrueCar.
National Dealer Council/Dealer Initiatives
TrueCar is also announcing several changes to take into account feedback and betterserve its dealer partners:
Consumer Membership Program
TrueCar remains committed to innovating to ensure higher lead quality for dealers and enhanced brand protection for OEMs. Based on OEM feedback, TrueCar will introduce a new consumer membership program, which TrueCar believes will substantially alleviate the concern. With this change, dealer partners can expect even higher quality introductions from TrueCar. In the end, consumers and dealers benefit.