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Jared Hamilton
From: Jared Hamilton
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Lindsey Auguste and Dennis Galbraith

Lindsey Auguste and Dennis Galbraith Investigative Reporters

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Is the TrueCar Debate Over?

TrueCar announced today through a formal press release that it is making radical changes to the way its product performs for consumers and is sold to dealers. The entire release was published earlier today on DrivingSales.com.

Along with "pro-industry product changes," a highlight of the modifications include:

-- The removal of the cost per billing model in some states, moving toward a subscription based plan.

-- Eliminating the term "invoice" from the site, replace it with "discounts to MSRP."

-- Requiring car shoppers to create an account and log in before receiving pricing information.

TrueCar is also establishing a Dealer Council in an attempt to create better relations with their dealer partners and create a channel through which to monitor dealer feedback.  

It was difficult for TrueCar to grasp how much it would need to change and how much failure to change would damage the firm. Eventually, they did come around to adopt sweeping reforms. Now it will be interesting to watch the reactions of dealers and trainers. For some, these changes will eliminate the concerns brought on over the past few months. For others, the changes will not eliminate all concerns but may calm them enough to consider using the service or at least enough to stop complaining publicly about it. There may even be some for whom these changes are not sufficient, indeed no change would ever be sufficient. Nearly 147 years after the end of the Civil War, the confederate flag still proudly flies over hundreds of homes; it would be foolish to think that any changes at TrueCar could be capable of satisfying everyone.

The questions for individual dealers are, "Are the changes enough to stop complaining? Are they enough to start buying?"

Jerry Thibeau
As long as customers are able to see what others are paying for vehicles, this not a good product for dealers. Those on the program are paying a company to help reduce profit. I could care less about the brokering or data issues, for me it's always been about eroding profit.
Rob Fontano
@TrueCars Compliance with state regulations does not change the culture of the company at it's core. Scott Painter did not wake up this morning and decide that there really weren't too many car dealers and sales people were an integral part of the business. I am sure that he still believes that cars are commodities and that dealer profits should be controlled. IMO TrueCar has done nothing to earn back the dealer bodies trust. What kind of Dealer Council meeting would you expect. Scott Painter stated that he found the automotive retail world ripe for harvest. It was not until someone shut him up and released the spin doctors that their attitude changed. This is not two kids on the playground shaking hands and making up, this is a company that has been granted millions in investment capitol fighting for their lives. TrueCar is being run by Scott Painter. His beliefs have not changed. He merely underestimated the dealers that were paying his salary and supplying him data.
greg webb
This is not a good product for dealers in almost all regards. The product itself does not motivate customers to buy. It only sacrifices much more of the profit potential for the dealer in an already very tough environment.The end result is that when one dealer finds out what his neighboring dealer is charging below invoice he has to then beat his price and then the next dealer has to beat his price and so on and so on and so on. Ends up there is nothing left for the dealer but the consumer sure is getting a hell of a deal. I have a competitor advertising new pickups for $1000 under invoice plus paying his true car commission plus paying his salesperson. Basically about $1500 under invoice. What good is that doing anybody? Companies like this will help put even more dealers out of business.
Rob Fontano
TrueCar in and of itself is anti dealer! "Get the REAL Price" says that Dealers are lairs and only TrueCar knows the truth. This model needs to be abolished.
Lindsey Auguste
All good points. It might be hard to believe that such a fundamental change in philosophy is being made. In an Automotive News article (http://www.autonews.com/apps/pbcs.dll/article?AID=/20120116/RETAIL07/301169933/1422), they mention that TrueCar is also looking to "change its website to help dealers market themselves, with less emphasis on discount prices, as well as target dealers listing vehicles with extreme discounts to improve fairness in competition." Do you think these goals are likely? Or even possible?

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