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DrivingSales learned tonight that Group 1 Automotive has ordered its 108 dealerships to drop TrueCar. Recent controversy surrounding TrueCar has been intense, and did impact the corporate decision. In notifying dealerships, the retail giant also advised individual stores to scrutinize which vendors they provide DMS access to and which fields they allow them to access. This need-to-know policy may limit access for other vendors.
Some of the accusations regarding TrueCar's use of DMS data involve more speculation than fact. Indeed, the mystery shopping conducted by DrivingSales did not replicate the accusations of leads being sold to third parties without expressly selecting the box requesting pricing from "non-certified" dealers. Tonight, we are not capable of getting that option to appear in TrueCar searches, having explored a variety of popular models in several zip codes. Third party leads have long been "scrubbed" to enhance their value. Whether or not DMS data was used for this purpose cannot be determined, but TrueCar denies this accusation and it would not be essential to use DMS data to achieve this end, either by the lead originator or aggregator.
The act of originating, enhancing, and aggregating third party leads has never been fully transparent to dealers or consumers. That doesn't mean it is wrong, but it can draw suspicion. Whether the accusations are justified or not, the Cost Per Action model used by TrueCar relies on DMS access, and the dollars moving away from that model by one of the nation's largest dealer groups is real. Ironically, the additional revenue stream achieved by selling some leads to aggregators does not require any DMS access and appears to be the greatest source of hot water.
DrivingSales strives to provide the industry's most timely and objective information on matters impacting dealers.