FTC Investigation: Did Dealers ‘Gang-Up’ On TrueCar?
TrueCar has been part of a federal investigation into whether or not dealers “ganged up” on them. The investigation involving TrueCar and dealers was carried out by the FTC over concerns of anti-trust laws. In TrueCar’s August 12Â SEC filing, they indicated U.S. antitrust investigators have closed a multi-year investigation.
The government was looking into whether or not dealers worked together to bid up and cause prices of vehicles on the TrueCar website to go up in 2011 and 2012. A Reuters report indicated that this feature encouraged dealers to big against one another in a “reverse-auction” format. Some dealers didn’t like this setup and left TrueCar. The FTC later asked some previous TrueCar dealerships to save their TrueCar documents pertaining to that 2011-2012 timeframe.
Also in TrueCar’s filing was telling information about their projection of success and desire to find a quality CEO. Talking about the competition that they face, TrueCar’s SEC filing read in part, “To the extent that car dealers view alternative marketing and media strategies to be superior to TrueCar, we may not be able to maintain or grow the number of TrueCar Certified Dealers and our TrueCar Certified Dealers may sell fewer cars to users of our platform, and our business, operating results and financial condition will be harmed.”
The filing also contained info about TrueCar’s search for a new CEO. Scott Painter, the CEO and founder of TrueCar will retire this year. In their SEC filing TrueCar mentioned this search when they said, “We face intense competition for executive-level talent from a variety of sources…it may be difficult to find a new chief executive officer with the appropriate level of skill and experience on a timely basis. In addition, the selection process for a new chief executive officer may create uncertainty about our business and future direction…To the extent there is a material delay in choosing a new chief executive officer, our business could be negatively impacted.”
What is your opinion of TrueCar? Do you have any thoughts about whether or not dealers may have “ganged up” on them a few years back? What do you make of their SEC filing and how it describes their organization moving forward?
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You can’t handle the truth. And sheep don’t like to listen.
Truecar will keep having issues if more companies go the way of Mazda with all new vehicles not being able to be mass marketed below factory invoice or the dealer gets fined for 3 months or more with a percentage of every new vehicle ordered in that 3 month period. Truecar is advertising like crazy on most mediums, in our area it’s a necessary evil right now but hopefully that will change soon, we’re over paying them that’s for sure!! They are real pills to deal with.
Maybe it’s time the people learned the whole truth and nothing but the truth?
I can’t see why any of the dealers can’t divulge the truth that when we sell you a car via TC that we are required to pay TC $395, $349,$495, or whatever it really is, because the TRUth of the matter is that TC conceals this information from the car buyer. Should not the customer be given the TRU cost to the dealerships? There should be a law which requires all lead providers to disclose any remuneration to the public when the lead exceeds $50 in cost to the dealership.
And no loss in volume sorry about that.
This is just another company praying of the consumer and the dealer, what the consumer doesn’t understand is the money true car extorts from the dealers to get the consumer to come in, it’s not about giving information, it’s about the bottom line. True car is a bottom feeder. Dealers today are already dealing with compressed margins. Now add the substantial fee paid to true car, I see more and more dealers just not signing up with them and saving thousands a month and loss in volume.