SaintNexus

When discussing about buying a new car a while ago, someone mentioned this website to me:

http://www.truecar.com/index.html

I absolutely love it. Gives great information on what you should pay for when signing the contract, and the true market value, and so on.

So, I decided to look into a 2010 Lexus GS350 (RWD)

The Sticker Price is starting at $46,475, but
It already gives a Best Local price of $38,615 (Saving $7,860 (17%))

After getting the options that I want:
-Preferred Accessory Package
-Black Leather Trim
-Starfire Pearl
-Adaptive Variable Suspension
-Rear Spoiler
-Rain-Sensing Wipers
-Mark Levinson Audio w/Nav
-Ventilated Front Seats
-Wood&Leather Steering Wheel
-Intuitive Park Assist

The Sticker Price goes up to $51,081, and
A Best Local price of $42,266 (Saving $8,815 (17%))

Once I clicked the options I want and so forth, on the bottom graph with all the Data, there is the Best Local Price with a LOCATE DEALER button.

After pressing the button, it preselected 3 dealers nearby with a price of $42,266-$43,266, this is all part of Step 1.

Under Step 2, it wants you to give all of your information. When having the cursor over "Why do we need this information?", it says:

"By submitting your information and printing your price certificate you are notifying the selected dealers that you are eligible for this program and interested in obtaining the specified vehicle"

Which leads to my question: After you print out this information, you can just go to any of the selected dealers, ask for this car with the exact same specifications, and get it with the price you want, no questions asked?

Or would you still have to go through negotiation? Which I would, personally, keep pushing the price I want on the paper ($42,266), instead of their Sticker Price ($51,081). But could they refuse to sell me the car at the price I want?

Has anyone bought a car by using this True Car program, or did you do all negotiations by yourself?

mmarshall

I have found, from experience, that the best way to get a good deal is to buy from salespeople/dealerships that you know (and know you) from previous buisness. Dealerships (and salespeople) tend to like repeat customers, and are more likely to bend the rules a little to give them a cheaper price out-the-door.

It also can depend on how much the dealership wants to get rid of vehicles in stock. Sometimes you can hit some good factory-incentives...better than anything those buyers's services web-sites can give you. A few years ago, for example, a co-worker of mine (I went shopping with him and his wife) picked up a brand-new, end-of-season, factory-incentive Kia Sedona minivan with a V6, Captains-Chair seating, and a full-power-package for only 19K...out the door, including everything. That, IMO, was a deal.


Also, the trouble with some of the pricing-guides is that, unless you are dealing with a special-order car, you sometimes don't know the EXACT car, with the EXACT options, you will actually be bargaining on until you actually get to the dealership and see what is in stock or available. So, if you figure the buyer-service price on Vehicle A, on their website, and then find out that, at the dealership, that exact vehicle is not in stock, you may have to settle for Vehicle B, which may differ a little...so you could be dealing with apples and oranges.

Sometimes you can get around this, IF the dealership does a good job of posting and updating the new-vehicles they have in stock, on their web-sites. Then you know what to figure a price on before you actually shop and go to the dealership. But, unfortunately, not all dealerships do a good job of listing their vehicles (and exact options) in stock, and, Lexus dealers have the super-annoying habit of not posting their new-car-inventories on their web-sites AT ALL.

ABC

Personally, i really like emailing as many dealerships I'm willing to drive to, tell them what i want and then pit them against each other for the lowest price. Usually works out VERY well. I would use the truecar #'s as a guideline...

SRI

In the Prices Paid & Buying Experiences Forums in edmunds.com, I remember reading about positive outcomes of some posters using truecar.com.

CNN money had this write up about truecar.com(16th item) in February, 2010.
http://money.cnn.com/galleries/2010/...mag/index.html

DaveGS4

iTrader: (2)

I haven't heard of these guys but looks like they get good press

iRock

iTrader: (12)

I would use that site as a starting point

IS-SV

I've heard of them, certainly looks like a good tool for price benchmarking.

Joeb427

iTrader: (1)

I use Truecar and find it better than Edmunds.

SaintNexus

But the price that it gives on true car, the best value price. Are you able to get the car at the price that I mentioned?

Cause according to truecar, I can get a brand new GS for almost $9k less than the actual sticker price.

Because when you print out the numbers, it sends a message to those dealers who say that you're eligible for that program. So can you really get it for that cheap, or will there still be negotiations?

RXSF

in my experience using the site, it gives numbers that are much much lower than other sides. In fact, on the 2011 models on true car, it says you can get thousands off, while on edmunds, it says you get next to nothing. I dont know who to believe. Obviously you want to believe in TrueCar's numbers, but it might be too good to be true

Joeb427

iTrader: (1)

The great to good deal numbers work.The incredible deal numbers,maybe not.
I do like the way truecar breaks down the dealers cost (ad fee,manufacturer to dealer incentives etc)
I use Edmunds too.

GS69

States Wary of TrueCar's Methods

TrueCar, the Internet auto shopping service, casts itself as an innovator battling entrenched industry methods. And now it indeed is colliding with many long-standing state laws designed to protect the interests of car dealers and shoppers.

Regulators in Colorado, Wisconsin and Virginia have issued bulletins to dealers or sent letters to TrueCar concluding that legal problems exist with TrueCar's business model of charging dealers for leads that turn into a sale.

And dealer associations in 3 more states -- California, Kansas and Ohio -- say members who use TrueCar may be violating state law.

The legal questions, which could affect a significant number of TrueCar's dealership clients that represent 5,200 or so franchises in 49 states, come at a critical time for the company. On Jan. 1, TrueCar was scheduled to become Yahoo.com's partner for auto shopping. TrueCar agreed to pay Yahoo $150 million over 3 years.

The partnership will expand TrueCar's reach greatly, and it is recruiting dealerships to handle the additional business.

But the state regulators and associations say TrueCar dealers could face stiff financial penalties for potential violations of state laws governing advertising and so-called bird-*******, or paying a 3rd party a fee that is contingent on a sale. And regulators in at least 2 states say TrueCar lacks the appropriate licenses.

Last week TrueCar said in a statement that it has been contacted by regulators in 6 states: Colorado, Louisiana, Nebraska, Kansas, Virginia and Wisconsin.

"TrueCar continues to work directly with regulators to ensure that at no time will our dealer partners be in violation of any laws by participating on the TrueCar network," the company said.

"We're in the process of making meaningful changes to the service, which will be completed by the end of January 2012, in order to address specific concerns raised by regulators."

While TrueCar has its critics, some dealers are happy with its service.

Jeff Kotlarek, Internet sales manager at Taylor Chevrolet in suburban Detroit, said he typically offers his vehicles to TrueCar customers at $100 below invoice price.

But vehicle sales from TrueCar leads can generate a substantial profit, he said, when customers buy accessories, warranties or features, such as moonroofs, that they didn't originally request.

A tough month

The intensified scrutiny from regulators wasn't the only bad news in December for TrueCar and Scott Painter, the company's ambitious and charismatic founder and CEO. Group 1 Automotive Inc., the 4th-largest U.S. dealership group, told its 42 dealers who were participants to sever their ties with TrueCar. Group 1 said it objected to TrueCar's access to its dealerships' computer systems and also questioned the cost.

And now the regulatory concerns are causing some dealers to drop TrueCar.

California megadealer David Wilson decided to drop TrueCar 2 weeks ago because of legal risks. After doing some research, he concluded that any dealer in California who sells a vehicle through TrueCar is breaking the law.

Wilson, who had been using TrueCar's services at 3 of his 16 stores, also said he had sold just 15 cars through the company in the past 6 months. He said TrueCar adds no value to a transaction and wants to be paid more than what the dealership nets on a sale.

"Why do I want to put myself in jeopardy for that?" he said.

TrueCar said its service accounted for about 250,000 U.S. auto sales in 2011, about 2 percent of the estimated 12.7 million-unit U.S. market. But the Yahoo agreement should expand TrueCar's influence significantly in 2012.

Here's how TrueCar works: A shopper on TrueCar.com chooses a vehicle and sees information labeled as invoice price and dealer cost. The shopper then specs out a vehicle, and participating dealerships near the shopper's home offer prices, which can be below TrueCar's invoice price. TrueCar says the offer includes all fees but no taxes, and has no expiration date. The dealer pays TrueCar $299 for every completed new-car sale.

Over the years, consumers or dealers prompted state legislatures to pass laws to ban practices such as bird-*******, which is paying fees to 3rd parties for leads that turn into sales; brokering, which is charging a fee to a retail customer to find and negotiate the purchase of an auto; and using the word "invoice" in advertising.

Now, in the era of Internet leads and marketing, the question becomes: Is TrueCar merely offering prohibited services in a new form? Or, as the company contends, is it offering a new, and misunderstood, business model that does not violate existing laws?

For instance, is TrueCar a lead service, such as Autobytel, which gathers leads and sells them to dealers? Or is it a different animal that operates like a broker?

TrueCar acknowledges confusion about its business model.

"We are certainly open to changes that enhance our ability to comply with a particular state's needs and to more accurately reflect what we do," the company said. "TrueCar is not a broker, traditional advertiser or lead generation company. We do not arrange or negotiate sales for dealers, nor do we advertise vehicles for sale.

"Rather, TrueCar is an Internet marketing company -- the dealer's window through the Internet to customers searching for vehicles."

On Dec. 15, Colorado regulators issued an opinion that TrueCar's materials and Web site violate several state regulations, including advertising rules, and could lead to "bait-and-switch" scenarios.

Among the advertising problems are use of the term "invoice" and failure to include all costs in the advertised vehicle price, state regulators said.

A bait-and-switch occurs when a consumer who has been quoted a specific price arrives at a dealership to find the vehicle already sold or otherwise unavailable, and the dealer then tries to sell a different vehicle.

The Colorado Department of Revenue said dealers ultimately are responsible for any violations. For dealers, that could mean fines of as much as $10,000 per occurrence and possible license revocation, said Tim Jackson, president of the Colorado Automobile Dealers Association.

The state also said it is concerned that TrueCar could be engaging in unlicensed sales.

"It's very serious," said Jackson, who used the attention-grabbing method of certified, return-receipt mail to send association members a bulletin on the TrueCar issues in mid-December.

"We didn't want it to end up just as another memo on the desk for dealers who may not be aware that this process is putting their dealership's compliance and potentially their dealership licensure and that of their salespeople at risk."

Lee Payne, a Honda and Hyundai dealer in suburban Denver, has stopped TrueCar transactions but did not cancel his relationship with TrueCar when the regulatory challenge arose. He had been using it at his Honda store for just a few weeks.

"We work really hard to be compliant, and if they're not compliant, we need to let that play out and see what the regulators decide," Payne said. "That's our biggest concern right now."

TrueCar acknowledged two weeks ago that some dealers have left recently for various reasons. Group 1 said it did not want to open its dealerships' computers. And Honda has warned its dealers that advertising prices below invoice on Internet shopping sites could put at risk the dealers' payments from the factory for local marketing.

In mid-December, TrueCar said it had 5,840 participating franchises and was recruiting more to handle a surge of leads expected from the Yahoo partnership.

Last week, TrueCar said it had clients representing more than 5,200 franchises and dealers representing 227 more franchises that had agreed to become clients. The company also said that since October it has received a record number of inquiries from dealers interested in joining TrueCar.

Class action

Peter Welch, president of the California New Car Dealers Association, says he is worried about regulatory penalties for his TrueCar members. He says dealers using TrueCar also could be swept into any class-action lawsuits that arise in the litigation-heavy state.

Welch said he believes the TrueCar model violates several points of California law, including advertising and licensing requirements. For instance, dealers in California aren't allowed to use invoice comparisons -- saying, for example, that an offered price is below the dealer's invoice -- and such comparisons are prominent on the TrueCar Web site.

"I don't believe the dealers understand that this whole thing is an advertising medium and they have to comply with all the advertising laws," Welch said.

TrueCar said in its statement that it is not an advertising medium.

The California trade association is completing a legal review and will warn dealers about their potential exposure, Welch said. Dealers can lose their licenses over violations, but Welch estimated that 90% of violations are settled with fines.

Bird-dog laws

Some dealer associations and regulators say TrueCar's model violates a ban on bird-dog arrangements.

In Virginia, the state Motor Vehicle Dealer Board warned dealers in October 2010 that it was illegal to pay a fee to Zag.com, the former name for some of TrueCar operations, in exchange for a sale.

Dealers were urged to stop the practice or face a $1,000 fine for each violation and possible suspension or revocation of their licenses. Bruce Gould, executive director of the Virginia Motor Vehicle Dealer Board, says TrueCar's practices violate the state's prohibition on bird-dog fees. On Dec. 20, Gould sent a letter to Painter saying the board would discuss the matter at a Jan. 9 meeting.

If the board agrees with his analysis, Gould says he will remind dealers that their payments to TrueCar are not legal.

"We try to take the position of giving everyone a fair warning, to say, 'OK, you're doing something wrong, you've got to stop it,'" Gould said. "If it continues, we'll have to bring out the guns."

2 weeks ago, the Wisconsin Department of Transportation sent TrueCar a letter saying dealers can't legally use the service. Wisconsin law prohibits bird-*******.

Wisconsin law also requires licensing of persons and companies involved in selling vehicles in the state, and TrueCar doesn't have the proper licensing, according to the letter.

"It has generated a lot of concern among dealers," said Bill Sepic, president of the Wisconsin Automobile & Truck Dealers Association, which has fielded about 20 calls on the issue since early December.

Dealers could be penalized as much as $5,000 for each licensing violation and have their licenses suspended or revoked. But regulators aren't planning to take action against dealers now; they want to give fair warning, said John Remy, program specialist in Wisconsin's Division of Motor Vehicles' Dealer and Agent Section.

Don McNeely, president of the Kansas Automobile Dealers Association, said the association believes that TrueCar's model violates the Kansas prohibition against brokering. A broker charges a fee to a retail customer to find and negotiate the purchase of an auto.

In its statement, TrueCar said it has "received an enormous amount of support and encouragement from our dealer partners in recent weeks. They recognize that the facts about TrueCar differ significantly from some of the statements in the press, and that well informed buyers are an opportunity rather than a threat to dealers."

Said Jackson of the Colorado dealer association: "This is not just a witch hunt on TrueCar. For us, it's helping ensure our dealers remain compliant regardless of what platforms and systems they use. So it's TrueCar today, and it could be somebody else tomorrow."

knighru

I used truecar on my recent purchase and was happy with the price. The dealership closest to my house had a true car price about about $800 more than another dealer 30 miles away and I basically said "match this other dealership and I'll buy from you" ... and they did.

I also had a friend use it to buy a car for her daughter and he was also happy.

Dealers that are on the truecar network pay truecar a few hundred dollars per purchase as some sort of "finder's fee" (it may be about $300).

just my 2 cents.

Fizzboy7

My last purchase went great. I emailed multiple local dealers and got them to give me their best price on the exact model I wanted. When you start pitting dealers against each other, the prices goes down FAST and you are dealing with actually dealership people instead of a website's suggestion or prediction. If you live near a few dealers, you can't go wrong with this method.

spwolf

seems to me that some bigger guys with influence dont like the fact that smaller dealers can easily gain advertising medium on truecar, so they are using the influence to try to ban them.

i dont see the problem with truecar and they are definetly not an broker.

if dealer offers one price and then once you go into the store offers you another, that has nothing to do with truecar, but with scammy dealer, and could happen over the phone or email.