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TrueCar CEO stays focused as controversy swirls

TrueCar Update

After the trouble TrueCar endured in 2012, CEO Scott Painter said the Federal  Trade Commission probe of some dealers who opposed the online car-shopping site  is a minor speed bump -- and may be a net gain for the company.

 

He insists that TrueCar did nothing to initiate the investigation into  whether some dealers colluded in 2011 and 2012 to boycott TrueCar and possibly hurt consumers in the process.

 

Painter said that he has fielded phone calls from friends and dealer clients  who mistakenly thought that TrueCar was the subject of the probe. Actually, the  dealers that were the loudest opponents of TrueCar's former pricing practices  are the ones that received letters from the FTC this month seeking documents  about their opposition and activities.

 

Painter said he sees the spotlight on TrueCar as a return to relevance rather  than a negative.

 

"That we're the topic of conversations again is a pleasant headache to have,"  he said.

 

TrueCar is a third-party shopping site that allows consumers to get  guaranteed prices on new and used vehicles from participating dealers.

 

Painter said the FTC inquiry has given TrueCar an opportunity to tell people  that the shopping site is again on a growth trajectory.

 

The site has about 6,500 participating franchises today. That's more than  twice the 3,200 franchises that TrueCar fell to in early 2012 when state  regulators challenged whether TrueCar was violating advertising and consumer  laws in several states.

 

Those regulators acted after dealers and their associations in several states  complained about the cutthroat vehicles prices that TrueCar helped fetch for  consumers by getting dealers to bid competitively for the buyers.

 

In the months it took to come into compliance in all states and end dealer bidding wars for customers, TrueCar almost went out of business. It posted a net  loss of $75 million in 2012. The company is complying with the request for  documents it received also from the FTC, Painter said.

 

Today, Painter said, TrueCar is profitable and its dealer network holding  firm even in the face of the FTC probe.

Views: 691

Tags: Controversy, FTC, Scott Painter, TrueCar, update

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Comment by Alexander Lau on October 14, 2013 at 6:23am

I lean towards Mark and Aaron's comments. 

Comment by Mark Dubis on October 11, 2013 at 8:01pm

I am with Aaron on this one.  As a former Governor said, "You can put lipstick on a pig, but it's still a pig."  The TrueCar model does nothing to add value to the dealership, their people and all the effort and contributions they make to their communities and local organizations.  Dealers who know how to sell the value of their services don't need to enter the "race to the bottom."

Comment by JB Floyd on September 24, 2013 at 12:31pm

All, I agree that there is more underneath than is what we see. An old saying down south is "scratch a liar, you will get a thief". I am sure we can apply that saying where it needs to be placed. Whatever the case, I love the comments, and that is the way we all learn. Thank you all for the great comments, keep bringing them in.

Comment by Aaron Fisher on September 24, 2013 at 7:44am

What a laugh.  Scott Painter and TrueCar's stated objective from the start was to put dealership's out of business.  So now the ones that chose not to do business with them, and that educated their other fellow dealers about them, have somehow illegally colluded?  Give me a break!  Bottom line, be transparent and post your prices online on your own website and any other 3rd party sites that you use.  Then you don't have to even think about doing business with companies like TrueCar.  Don't want em...don't use them.  I didn't let the TrueCar wool get pulled over my eyes the last time, and I won't have to worry about it ever happening in the future.  Good luck TrueCar and best of luck to those of you who choose to do business with them.

Comment by Debra L Bly on September 24, 2013 at 7:03am

Did you read over all of the comments made when dealers, vendors and
Mr. Painter brought to light issues between True Car and their very
bold way of putting down the reputation of all dealers to boost up
their reputation with vehicle buyers. True Car made many changes to
accommodate dealers and Federal/State laws, to earn back the respect of
the consumers and the auto industry. Do not discount what happened, it
was very justified and exactly what needed to happen to create change.
Your comment (Those regulators acted after
dealers and their associations in several states complained about the
cutthroat vehicles prices that True Car helped fetch for consumers by
getting dealers to bid competitively for the buyers.
) says that
dealers said the prices were cutthroat and True Car calls it
competitively bidding, Do not put dealers in the negative as True Car once
did, there is more competitive pricing due to the dealers than any
online vendor has been able to accomplish. Selling thousands of automobiles is what all the dealers do and believe me they are not doing it with the highest prices THEY
ARE ALL COMPETITIVE or THEY ARE OUT OF BUSINESS.

Comment by Alexander Lau on September 24, 2013 at 6:10am

Ain't gonna' happen David. TrueCar is in it to win it. Skeptical is definitely the right word to use. It's not rocket science in terms of grabbing inventory and displaying it for lead conversion purposes through a 3rd party system. Working on that as we speak. 

There's plenty of competition as well such as CarWoo and https://autoref.com.

Comment by David Ruggles on September 24, 2013 at 5:38am

I hope TrueCar succeeds by helping dealers make more gross profit, rather than helping them do the same volume as before but at less profit. After all, TrueCar owns ALG and we don't want anything bad to happen to them.

I continue to be skeptical of any vendor who thinks he/she knows better how to run a car store than actual dealers, but has never done it him or herself.  My skepticism increases over the money these vendors propose to make helping us mend our "evil ways." 

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