Who is TrueCar?
Who is TrueCar? This internet is going to be big, really big. I decided to go “on the line” and do some research. (This on the line is a joke from the Internship with Vince Vaugh and Owen Wilson). Just go check it out.
You can go right to their web site: TrueCar.com
If you cannot break away from this mesmerizing writing read the following:
It turns out that TrueCar is not a small marketing company. They are a publically traded company with some significant shareholders. TrueCar had a hand in 3.5% of U.S. new car sales (according to Wikipedia). In 2010, CNNMoney.com named TrueCar.com one of the “20 best web sites” to help individuals make financial decisions. TrueCar reports its users have purchased a total of 1.2 million cars from dealers in their network.
According to Yahoo Finance the company does the following:
- The company’s platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers.
- It provides data and consulting services regarding determination of the residual value of an automobile at future given points in time, which are used to underwrite automotive loans and leases,
- [Provide resources] to financial institutions to measure exposure and risk across loan, lease, and fleet portfolios.
- It provides geographically specific and real-time pricing information for consumers and dealers.
Oh yea. I almost forgot, the company reported sales of 206 Million. Yes, that’s 206 Million. So, it’s not really that small. And it appears to be growing. It looks like the revenue has almost tripled since 2012. Now, this changes the way I look at this battle. What’s really going here? We have 115 dealers trying to stop the marketing a company that has 9,000 dealers in its network with 206 million in sales (and getting huger).
Looks like the TrueCar concept is growing and making money for its “network dealers” and scooping up some fees along the way. This actually appears to be a David against Goliath.
I get it. The dealers are worried. It’s already tough to make money on new cars. I guess if TrueCar gets too big, and the concept grows, the dealers will be beholden to TrueCar and two things happen 1) might have to join TrueCar and pay more fees on every sale 2) prices will be lower than they already are. This looks to me like desperation rather than anything else. (Again my opinion only).
Here is another wrinkle, and a big one at that. TrueCar is getting involved in the lending process. A recent press release indicates that they are working with some bank on pre-approved lending that consumers can take to dealers before they walk in the door. This must scare the heck out of dealers!! Not only is TrueCar getting involved in the sales side now the financing side also. Ouch! That hurts in the wallet. I am sure the next step will be warranties and other items that dealer make profit from on the sale of cars. While dealers might be scared they probably should not be. I’ll cover this later, but dealers are EXPERTS in sales. And once a customer gets in that door, TrueCar or not they are very good at selling consumers, on their own stuff, financing or otherwise. But it will crimp their profits for sure.
Now I want to cover my *SS. I am not making any judgment on the merits or the legal theories, yet. I am only trying to figure why the dealers did this car and why they would get involved in such a Herculean effort. This is just my OPINION and nothing more.