TrueCar.com Tracks New Car Transactions To Spot New Car Values

by Don Elliott on January 12, 2012

Finding the best price on a new car can be intimidating. Everybody, including this writer, claims to be able to find the best used car value on any given day. The “window sticker” shows the actual Manufacturer’s Suggested Retail Price (MSRP), which should make finding the best transaction price easy, right?

TrueCar.com claims to offer pricing that uses actual market transactions to calculate the best transaction price at dealers within their TrueCar Network of dealers. Consumers can print off a TrueCar price certificate from a dealership, which will honor the price as quoted (plus sales tax, title fees, and documentation expense).

TrueCar.com is different from information provided by other websites because it offers an actual purchase price, not just an estimation of the probable best price available. Edmunds.com, eBay, Kelley Blue Book, AutoTrader.com, and several other sites can provide information that is similar, but they simply receive a fee for reference to car dealer who will negotiate a price similar to the price calculated by the website. The small fee is paid for each referral from their sites.

In the case of TrueCar.com, they claim to have over 5,000 new car dealers who have agreed upfront to the price TrueCar presents to the customer. Of course, TrueCar doesn’t provide their service for free. Dealers only pay TrueCar $300 when their information results in a sale.

TrueCar has been around since 2006. Based in Santa Monica, TrueCar has been quietly gaining momentum as a force within the new car transaction. TrueCar has tapped into a myriad of data resources to obtain actual transaction information. They have gotten so good at trimming down the transaction price that some states and manufacturers are pushing back. Honda has told their dealers that they will hold back some marketing incentives if their dealers agree to sell Hondas at TrueCar’s deeply discounted prices. Pressure from some dealers on state regulators has caused TrueCar to make changes to accommodate archaic state laws implemented before computer-based marketing was so prevalent.

TrueCar has agreements with their dealers that require them to deliver cars at the price quoted. However, the cars specified by consumers might not be available as priced out or maybe not available in that market area. Dealers are permitted to offer similar cars, but are required to maintain the same relative discounts as offered on the TrueCar Pricing Certificate. TrueCar’s doubters claim that dealers use TrueCar for “bait-and-switch” tactics to improve margins on the new car deals.

In any case, TrueCar has gotten the attention of new car dealers and buyers. For anyone in the market for a new car, TrueCar.com provides one more tool to help find the best new car value. The fact is, new car dealers make very little profit on the actual car transaction. Car dealers sell a variety of services including financing, insurance, service contracts, and maintenance on their customer’s vehicle that last for years after the transaction. Regarding the MSRP, as they say in New York, “Fahget abat it!”

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