TrueCar Slams $250 Million Dollar Lawsuit As ‘Meritless’

As we reported previously, TrueCar is at the center of a lawsuit. 117 dealerships from around the nation have joined an attempted class-action suit against the organization. The allegation against TrueCar is that they engaged in false advertising and created direct and indirect competition dealerships.

Problems apparently arose when consumers printed off a price quote for a vehicle they assumed that: 1) The vehicle would be in stock and 2) That price negotiations were over. However, when consumers set foot on a lot and saw that this perhaps wasn’t the case, they would take their business elsewhere.

In the lawsuit, the firm representing the dealers is seeking $250 million dollars. This figure was reached by considering TrueCar cost each dealership three sales per month with a gross profit on each sale at around $2,000. In the lawsuit, the plaintiffs (dealers) are seeking monetary relief in excess of $250 million dollars, reimbursement of attorney fees as well as repayment of perceived damages to the individual dealerships.

TrueCar originally responded to the lawsuit in a statement emailed to DrivingSales News, saying among other things, “We will vigorously defend the lawsuit and our business practices and we expect to be fully vindicated.” However, the company has decided to respond in longer fashion on their website. A press release on the topic of the lawsuit by TrueCar reads in part, “The lawsuit challenges the company’s advertising practices and asserts that we compete unfairly with non-TrueCar dealers. We believe the lawsuit is meritless.”

The release further states that those 117 dealers likely joined the suit by the large advertisement asking them to do so at dealerlaw.com. They also pointed out that the lawsuit only involves dealers. Another part of the press release reads, “Notably, no consumers are parties to the lawsuit. Consumers come to TrueCar because our platform provides real-time, upfront pricing information, and our Certified Dealers are committed to a better consumer experience. Indeed, we believe our compelling consumer value proposition is a central motivating factor behind the lawsuit.” It should be noted that the law firm representing the dealers, Bellavia Blatt & Crossett, PC, seems to exclusively represent auto dealers, thus consumers would be less likely to be a part of this lawsuit.