Wednesday, January 11, 2012

TrueCar: Out to destroy our retail business model or a sales tool you should consider?

If True Car was a republican political candidate Herman Cain would still be in the race for the Republican nomination. Cain’s troubles would have been overshadowed as attention shifted to this revolutionary polarizing candidate “True Car.” But TrueCar is not a political candidate. TrueCar is a consumer website that offers a “low retail price” to car shoppers.

In general this isn’t a revolutionary idea at all. Sites like,, and have been around for years providing consumers with information about fair prices to pay for cars. Consumers for long periods of time have been able to replicate invoice pricing on any new car as they prepared for their trip to the dealer. So why the buzz about TrueCar? Well it’s in their execution. TrueCar in many ways is on steroids. TrueCar’s sell isn’t just that they can tell you a fair price to pay; it’s that they have done the leg work for you and the dealer has already AGREED to sell it at that price. Scary? Maybe…but genius in execution. Oh yeah and that price is based on REAL DATA based on what other customers have actually paid. At least that’s True Car’s story.

Before our venture into the car business I knew my Father to be a Lexus guy having leased 3 in a row from the same salesperson at Lexus of Tampa Bay. When asked why (they had his business) my Dad would always mention “exemplary and professional customer service.” I remember asking him once if anything ever bothered him about the experience. “I always wondered just how much they were making off of me.” I have to think that’s a concern felt by SOME of our consumers. That’s who TrueCar is talking to.

I’m not excited about the price per deal ($300 dollars) or giving a third party access to our DMS. BUT having said that True Car has loaded their guns with 200 million in advertising dollars and despite some compliance challenges doesn’t look to be going away anytime soon. Some of our stores will not want to be left behind … especially volume driven stores with factory unit bonuses. I have enjoyed Honda’s stiff stance citing involvement with true car as a violation of Honda’s ad covenant. Honda has been proactive to a degree that is consistent with their personality and market position. Other car companies aren’t looking like they wish to make the decision on True Car for you. So what’s your take on True Car?