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From WANADA: VA Motor Vehicle Dealer Board take on legality of vehicle purchase referrals by TrueCar at its January meeting.

Other states, including Maryland, will investigate referrals as well


The Virginia Motor Vehicle Dealer Board, which reviews new and used car dealer practices in the commonwealth, will be looking into the practice of vehicle purchase referrals to dealers with an eye toward unlicensed vehicle sales activities. TrueCar Inc., a California based business engaged in vehicle sale referrals with dealers in Virginia and other states, was notified by MVDB that the dealer board will be evaluating their business model as it has been operating in Virginia to determine if it violates the law. The meeting, to be held at the Department of Motor Vehicles in Richmond, is scheduled January 9, 2012. If TrueCar’s business model is found to be violative of the law, MVDB says it will notify dealers across the state of their risk of being found out of compliance with vehicle sales laws for engaging in retail sales referrals resulting in enforcement actions.

Maryland, with similar prohibitions against vehicle sales by unlicensed sales agents is expected to initiate a similar investigation of vehicle referrals through the Motor Vehicle Administration. Other states are looking at vehicle sale referral activities the way Virginia is, given the exponential expansion of the practice over the Internet.

Correspondingly, certain automakers are reviewing the practice of referrals with their dealers concerned that such services could undermine manufacturer sales programs.

Irrespective of any government regulatory agency’s interest and involvement in the business practices of contractors and service providers, or related automaker franchiser concerns, dealers are reminded that the antitrust laws absolutely prohibit concerted activity and agreements between competitors as to which service providers and contractors to engage or not engage.

Views: 136

Tags: automotive, dealerships, maryland,, virginia


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Comment by Heather Graham on December 23, 2011 at 6:00am

yes, dealers are responsible...but I don't think Reynolds will miss a good fight! ; )

Comment by James A. Ziegler on December 23, 2011 at 5:46am

I believe ADP and Reynolds will definitely get in the battle, They also have some responsibility in the security of consumer data. Unfortunately, the dealers have signed releases that allow a number of aggregators to pilfer through consumer data. If I named who I am talking about, you'd be shocked. AND they sell that data to third and fourth parties like TrueCar and others.

Comment by Heather Graham on December 23, 2011 at 5:34am

I agree Jim....the data issue is extreme.  I believe that they are pulling dozens of reports from each dealer.  I wonder too, if Reynolds, USLEC, ADP will join the party against TrueCars.

Comment by James A. Ziegler on December 23, 2011 at 4:59am

Before this is over...I predict government regulators will lock down many sources of loose data floating around. TrueCar data comes not only from our dealers DMS but from other sources that originally lifted the data from a dealers' DMS. I don't want to name those sources now because it would take the focus off of TrueCar and start too many side fragmented conversations. Just remember I said this.

Comment by James A. Ziegler on December 23, 2011 at 4:55am

You are probably correct Heather. The larger issue is the proliferation of data being taken on our customers. 

Comment by Heather Graham on December 23, 2011 at 4:33am

For Maryland I believe a big piece is the fact that Truecars does not correctly display the dealers the processing charge.  In addition, I wonder if TrueCars can be charged with attempts to price-fix.  I'm not a legal eagle by any means and that may be a stretch....just thinking out loud.

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